February 3, 2023

Money News PH

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There are many reasons to be excited about Canada’s venture market

Canada’s venture market isn’t immune to the global market downturn, but unlike the US — where everything is looking increasingly grim — there are some bright spots in the Canadian ecosystem this year.

Data from the Canadian Venture Capital and Private Equity Association (CVCA) showed that CA$7.2 billion (US$5.28 billion) was invested in 520 deals in the country in the third quarter of this year. This compares to C$15 billion provided by 786 deals in 2021 (more on Canada’s last year here). By the third quarter, the Canadian market had already surpassed its 2020 numbers. It’s also worth noting that unlike the US, the fourth quarter is not the slowest investment period every year in Canada.

Much of recent Canadian venture investment has focused on the early stages. So far this year, 88% of known venture deals in Canada have been seed or early stage, according to PitchBook, compared to 67% in the US.

David Kornacki, manager of research and product at CVCA, said that despite lower levels of investment compared to last year, there have been many signs this year that the Canadian venture market is nearing maturity. For one, he believes that the proliferation of seed deals in a few years will create a good pipeline of later-stage opportunities in the region, which Canada is struggling with.