VC & PE CANADIAN MARKET OVERVIEW // H1 2019 CONTENTS
PARTICIPATING DATA CONTRIBUTORS...... 3 PRIVATE EQUITY CANADIAN MARKET OVERVIEW...... 18
FOREWORD...... 4 PRIVATE EQUITY HIGHLIGHTS...... 19 PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY...... 20 VENTURE CAPITAL CANADIAN MARKET OVERVIEW...... 5 PRIVATE EQUITY HEAT MAP // PE GROWTH DEALS ONLY...... 21 VENTURE CAPITAL HIGHLIGHTS...... 6 PRIVATE EQUITY HEAT MAP // ALL PE DEALS...... 22 VENTURE CAPITAL HEAT MAP...... 7 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY...... 23 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY...... 8 TOP 10 DISCLOSED CANADIAN PE DEALS...... 24 VC ACTIVITY BY DEAL SIZE...... 9 PE ACTIVITY BY DEAL SIZE...... 25 TOP DISCLOSED CANADIAN VC DEALS...... 10 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES...... 26 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES...... 11 PE SECTOR BREAKDOWN...... 27 VC SECTOR BREAKDOWN...... 12 PE EXITS...... 28 VC STAGE BREAKDOWN...... 13 TOP DISCLOSED CANADIAN PE EXITS...... 29 VENTURE DEBT HEAT MAP...... 14 MOST ACTIVE PE INVESTORS...... 30 VC EXITS...... 15 TOP DISCLOSED VC EXITS...... 16 CVCA METHODOLOGY...... 31 MOST ACTIVE VC FIRMS // FUNDS...... 17 VENTURE CAPITAL...... 31 PRIVATE EQUITY...... 32, 33 AUTHORS, ABOUT CVCA AND CONTACT INFO...... 34
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 2 PARTICIPATING thanks the following firms DATA CONTRIBUTORS CVCA who participated in its H1 2019 survey.
Venture Capital Firms Private Equity & LSVCC Firms Limited Partners
Accelerate Fund Freycinet Ventures Renewal Funds 32 Degrees Capital Mink Capital Alberta Teachers’ Retirement Fund (ATRF) Amorchem Venture Fund Golden Ventures Rio Investment Partners AIP Private Capital Mosaic Capital Corporation BDC Capital Inc Anges Quebec Good News Ventures Roadmap Capital ARC Financial Novacap Management Inc. Bluesky Equities Anges Quebec Capital GreenSoil Investments Roar VC Ardenton Capital Corporation OMERS Private Equity Inc. Caisse de dépôt et placement du Québec (CDPQ) Arctern Ventures iGan Partners Round13 BDC Growth Equity PenderFund Capital Management Dancap Private Equity Inc AVAC Ltd. InnoStart Ventures ScaleUP Ventures BDC GTC Persistence Capital Partners Desjardins Capital Avrio Ventures Innovacorp StandUp Ventures Capital Financière Agricole Management Corp PFM Capital Inc Fondaction CSN inovia Capital Tactex Asset Clairvest Group Inc. Azure Capital Partners Management Inc. Pillarfour Capital Fonds de solidarité FTQ Investeco Capital Corp Clearspring Capital Partners BCF Ventures Tandem Expansion PRIVEQ Capital Funds Fonds de solidarité FTQ (Regional) Island Capital Partners First West Capital Bioindustrial TandemLaunch Regimen Equity Partners HarbourVest Partners (Canada) Ltd Innovation Canada Luge Capital Founders Group of TELUS Ventures Food Companies Inc. Roynat Capital Inc. Investissement Quebec Build Ventures Lumira Ventures Top Renergy Fulcrum Capital Partners Seafort Capital Kensington Capital Partners Limited CIBC Innovation Banking MaRS Catalyst Fund Trellis Capital GrowthWorks Capital Searchlight Capital Partners Northleaf Capital Partners CIC Capital Ventures MaRS IAF TVM Life Science Highland West Capital TIMIA Capital Corp Ontario Teachers’ Pension Plan (OTPP) CTI Life Sciences McRock Capital Management Inc. InstarAGF Asset Management TriWest Capital Partners Teralys Capital Cycle Capital Management/ Mistral VP V3-Ventures EcoFuel Kayne Capital Vistara Capital Partners New Brunswick Vancouver Founders Fund Emerald Technology Ventures Innovation Foundation Killick Capital Inc. Westcap Mgt. Ltd Vanedge Capital Partners EnerTech Capital OMERS Ventures Lex Capital Management Western Investment Venbridge Ltd. Company of Canada Limited Espresso Capital Ltd. Panache Ventures m2s Capital VentureLink Funds Evok Innovations Pangaea Ventures Versant Ventures Ferst Capital Quark Venture White Star Capital Fight Against Cancer Real Ventures Innovation Trust Whitecap Venture Partners If you would like to have your firm included in future Relay Ventures reports, please contact either First Ascent Ventures Yaletown Partners [email protected] or [email protected]
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 3 FOREWORD Canadian Venture Capital Experiences Strongest First Half On Record At CAD $2.15B Invested; Private Equity Investment Up Over 50% Since Q1 – Lowest H1 Performance On Record
CAD $1.28B invested over 143 VC deals in Q2; Major pending PE deals, valued over CAD $6B, set to positively change sector trajectory
VENTURE CAPITAL PRIVATE EQUITY A record CAD $1.28B was invested over 143 deals in the second quarter this year, bringing the total dollars CAD $3B was invested over 158 deals in the second quarter, 54% higher than the first quarter of 2019. invested in the first half of 2019 to CAD $2.15B; surpassing the previous highest quarter in Q4 2018 (CAD $1.25B) This brings the total PE investment in the first half of the year to CAD $4.89B, the lowest dollars invested and previous highest first half in H1 2018 (CAD $1.67B). in a first half since the CVCA began collecting data in 2013. Deal activity in H1 2019 (289 deals) was lower There were 11 mega-deals ($50M+) in the first half of 2019, which accounted for a 42% share of total VC than H1 2018 (324 deals) and H1 2017 (292 deals) dollars invested. Of these 11, Four were over CAD $100M and included Hamilton-based Fusion Pharmaceutical There are at least two pending major deals, including the CAD $5B privatization by Onex Corporation Inc.’s CAD $140M series B financing from a syndicate that included CVCA membersFight Against Cancer of Calgary-based WestJet Airlines Ltd. and Brookfield Asset Management’s pending CAD $1B sale of Innovation Trust (FACIT) and Genesys Capital Management Inc. Ontario-based BGIS to CCMP Capital Advisors which are expected to positively change the trajectory Information and communication technology (ICT) companies took home the majority of total dollars of PE investment performance this year. invested in the first half of 2019 at 54% (CAD $1.2B over 144 deals) with life sciences receiving 27% (CAD Apart from a single mega-deal (CAD $500M+), all other deals with disclosed values were below CAD $586M over 55 deals), slightly higher than the five-year average of 21%. Agribusiness companies received $500M and 66% (192 deals out of 289) were under CAD $25M. The largest disclosed PE deals included the 11% (CAD $243M over 20 deals). CAD $1.4B mega-buyout by Thoma Bravo LLC of privately held London, Ontario-based Autodata Solutions VC-backed exits are on pace to exceed the 36 in 2018 (CAD $989M) with 20 completed in H1 2019 Inc. and the CAD $445M acquisition of Toronto-based Gluskin Sheff & Associates Inc. by Onex Corporation. totalling CAD $2.1B. Of the 20 exits so far this year, there were two VC-backed Initial Public Offerings (IPO) There was a record share of deals in information and communication technology (ICT) companies (20%) and included Montreal-based companies. Lightspeed POS Inc. (TSE: LSPD) completed the largest IPO since in the second quarter, which is 3% higher than its share in 2017 and 2018. The industrial and manufacturing 2017 (market capitalization of CAD $1.1B) and Milestone Pharmaceuticals Inc. (NASDAQ: MIST) closed its sector saw a similar amount of deal flow at 21%. IPO on NASDAQ (market capitalization of CAD $468M). “The first half of 2019 has seen a slow down in PE dollars invested in Canadian and other markets “Canadian VC-backed exits are on a positive trajectory in 2019 which, in tandem with invested VC including the United States,” said Kim Furlong, Chief Executive Officer, CVCA. “High valuation and quality dollars, exhibit a healthy innovation ecosystem,” said Kim Furlong, Chief Executive Officer, CVCA. “We’ve of deals have been said to be driving this trend. In Canada, the size of funds and deal activity remain heard time and time again that Canada is experiencing a ‘moment,’ and the results we are seeing in H1 strong. CVCA will be closely monitoring sector indicators in the second half. 2019 is a testament to that” PE exits also slowed this quarter with only 15 M&A exits totalling CAD $851M. Notable among the 15 was the CAD $570M corporate acquisition of Toronto-based Intelex Technologies Inc. from HarbourVest METHODOLOGY CHANGE Partners, LLC and JMI Equity as well as the CAD $260M acquisition of Langley-based 4Refuel Canada LP H1 2019 is the first time that CVCA is reporting on venture debt separately from overall venture capital activity. by Finning International Inc. Based on consideration from its Data Committee and given the rise of VC debt as a financing vehicle, the association will report on VC debt deals separately (see page 14 in the H1 2019 report) but will no longer include these deals in aggregate quarterly VC activity figures. This change has impacted historical figures.
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 4 VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H1 2019
MAybe Background is this colour? VENTURE CAPITAL HIGHLIGHTS // H1 2019
Key Findings
A record $1.28B was invested over 143 deals in the second quarter this year, the Toronto-based companies received 34% ($741M over 76 deals) of total dollars highest amount since 2013 and marginally higher than the previous high-water disbursed, with Montreal-based companies receiving 22% ($440M over 66 deals) mark of $1.25B invested in Q4 2018 and Vancouver-based companies a 7% share ($158M over 27 deals) The average deal size was $9M, a 22% increase from Q2 last year and a 26% ICT companies grabbed 54% of total dollars invested in H1 2019 ($1.2B over increase compared to the average deal size during the 5-year period between 144 deals) with life sciences receiving a 27% share ($586M over 55 deals). 2014-2018 ($5.9M) Agribusiness companies received a 11% share ($243M over 20 deals) There were a total of 11 $50M+ mega-deals this year which accounted for a 42% Early stage companies received 45% ($973M over 111 deals) of total investment; share of total dollars invested. These included 3 deals over $100M which included: later stage deals accounted for 40% ($862M over 44 deals) Hamilton-based Fusion Pharmaceuticals Inc.’s $140M series B round from VC-backed exits are on pace to exceed last year’s total of 36 ($989M) with 20 a syndicate that included Fight Against Cancer Innovation Trust (FACIT) and already completed in the first half of the year totalling $2.1B. These included two Genesys Capital Management Inc. VC-backed IPOs by 2 Montreal-based companies: Toronto-based Vena Solutions Canada Inc.’s $115M growth equity financing Lightspeed POS Inc. completed the largest IPO exit since 2017 listing on from US investors TMX with a market cap of $1.1B There were 18 deals between $20M-$50M totalling $566M or a quarter of total Milestone Pharmaceuticals Inc. closed its IPO on Nasdaq with a market VC dollars invested and 43 deals between $5M-$20M totalled $449M, just over cap of $468M one-fifth share Ontario-based companies received 52% of investment ($1.1B); Quebec-based companies received 25% ($532M) followed by BC-based companies with an 15% ($322M) share
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 6 VENTURE CAPITAL HEAT MAP // H1 2019
$1M total # Yukon
total 1 256 deals $2.2b 37 10 2 $3M Newfoundland and Labrador 6 81 1 2 7 $0.6M 15 Prince Edward 94 Island $322M $25M BC Alberta $58M $4M $3M Nova Scotia $80M Manitoba New Brunswick Saskatchewan $532M Québec $1.1b Ontario
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 7 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY $ Millions Invested # Deals
260 $1,300 240 $1,200 220 $1,100 200 $1000 180 $900 160 $800 141 145 140 143 135 133 134 129 140 $700 128 125 126 120 118 120 $600 127 124 $500 111 108 100 104 113 $400 80
$300 60
$200 40
$ 20 1,250
100 864 1,283 431 656 618 619 940 703 717 839 592 864 1,055 627 1,032 710 $ $ $ $ $ $ $ $ $ $ $ $ $ $1,114 $ $ $ $ $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017 2018 2019 TOTAL: TOTAL: TOTAL: TOTAL: TOTAL: 537 DEALS 528 DEALS 453 DEALS 503 DEALS 256 DEALS $2.3B $3.2B $3.6B $3.6B $2.2B
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 8 VC ACTIVITY BY DEAL SIZE // H1 2019 42% of dollars invested were raised by
Total Deals $ Millions
< 11 mega-deals $100K 18 $1
$100K - $500K 31 $8
$500K - $1M 21 $14
$1M - $5M 91 $214
$5M - $20M 43 $449
$20M - $50M 18 $566
$50M + $89511
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 9 TOP DISCLOSED CANADIAN VC DEALS // H1 2019
company name province Disclosed VC Firm(s) sector stage $ mil
ADAMS STREET PARTNERS, LLC, FIGHT AGAINST CANCER INNOVATION TRUST (FACIT), GENESYS CAPITAL MANAGEMENT INC., HEALTHCAP, JOHNSON FUSION PHARMACEUTICALS INC. ONTARIO LIFE SCIENCES EARLY STAGE $140 & JOHNSON DEVELOPMENT CORPORATION, ORBIMED ADVISORS, LLC, PERCEPTIVE ADVISORS, LLC, PIVOTAL BIOVENTURE PARTNERS LLC., ROCK SPRIN
VENA SOLUTIONS CANADA INC. ONTARIO CENTANA GROWTH PARTNERS, JMI EQUITY ICT GROWTH EQUITY $115
WEALTHSIMPLE FINANCIAL INC. ONTARIO ALLIANZ X, POWER FINANCIAL CORPORATION ICT LATER STAGE $100
CARBON ENGINEERING LTD. BC CHEVRON TECHNOLOGY VENTURES LLC (CTV) CLEANTECH LATER STAGE $90
BRAEMAR ENERGY VENTURES, CYCLE CAPITAL MANAGEMENT/ECOFUEL, ENERKEM INC. QUÉBEC FONDACTION CSN, FONDS DE SOLIDARITÉ FTQ, INVESTISSEMENT QUÉBEC, CLEANTECH LATER STAGE $76 NATIONAL BANK OF CANADA, RHO CANADA VENTURES
F-PRIME CAPITAL PARTNERS, FIGHT AGAINST CANCER INNOVATION TRUST TURNSTONE BIOLOGICS INC. ONTARIO (FACIT), FONDS DE SOLIDARITÉ FTQ, ORBIMED ADVISORS, LLC, TERALYS LIFE SCIENCES LATER STAGE $56 CAPITAL, VERSANT VENTURE MANAGEMENT, LLC
PERASO TECHNOLOGIES INC ONTARIO ROADMAP CAPITAL INC. ICT LATER STAGE $56
APPLYBOARD ONTARIO ANTHOS MANAGEMENT, LLC, ARTIMAN VENTURES ICT EARLY STAGE $55
AMAZON.COM NV INVESTMENT HOLDING LLC, FMR LLC (FIDELITY), NORTH INC. ONTARIO ICT BRIDGE VC $54 INTEL CAPITAL
FIIX SOFTWARE ONTARIO BUILDGROUP MANAGEMENT, LLC, GEORGIAN PARTNERS INC. ICT LATER STAGE $53
There was 1 undisclosed deal that was not included in this table
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 10 TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // H1 2019 #1 toronto $741 m 76 DEALS Total Deals $ Millions
1. Toronto 76 $741
2. Montréal 67 $473
3. Vancouver 27 $158
4. Halifax 12 $42
5. Calgary 10 $25
6. Ottawa 8 $56
7. Kitchener, Waterloo, Cambridge 7 $157
8. Saskatoon 5 $76 3 9. Burnaby 5 $45 5 9 8 $26 8 4 10. Laval 5 10 2 6 7 1
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 11 VC SECTOR BREAKDOWN // 2015–H1 2019
$ Millions Invested # Deals
$2,600 520 2,432 $ $2,400 2,303 480 $ $2,200 440 1,962
$2,000 $ 400 $1,800 360 323 330 271 $1,600 299 320 1,377
$1,400 $ 280 1,169
$1,200 $ 240 $1,000 200 722 717 671
$800 651 160 $ $ $ 586 112 $ 144 $
$600 422 120 91 96 $
103 278
$400 243 80 208 185 $ $ 133 99 $ 94 $ 29 63
$200 $ 40
$ 20 42 55 $ 43 49 $ 46
20 $ 27 $0 22 24 15 0 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2019 2019 2019 2019
ICT LIFE SCIENCES AGRIBUSINESS CLEANTECH
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 12 VC STAGE BREAKDOWN // 2015–H1 2019
$ Millions Invested # Deals
$2,100 1,953 360 $ $1,925 330 $1,750 300 1,594 1,567 1,538 $ $ 262 $ $1,575 1,422 270 $
232 1,353
$1,400 $ 240 1,210
220 $ $1,225 195 191 210
180 178 973 $
$1,050 926 180 862 $ $875 $ 150 154 126
$700 97 120 111 91 $525 85 90 314 $ 236
$350 212 44 60 $ 161 159 $ 127
59 $ 125 $ $ $ $175 30 30 0 $ 1 1 4 $0 0 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2019 2019 2019 2019
SEED EARLY STAGE LATER STAGE GROWTH EQUITY
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 13 VENTURE DEBT* HEAT MAP // H1 2019
total #
total 59 deals $66m 12 1 2 24 15 6 $322M $25M BC Alberta $3M $80M New Brunswick * VC Debt deals are not included Saskatchewan $499M in the overall Canadian VC activity Québec $1.2b Ontario
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 14 VC EXITS // 2015–H1 2019
* Includes transactions with undisclosed values Exit Value ($ Millions) # Exits ** IPO valuation
$3,000 50
$2,700 43 45 $2,400 40 36 35 $2,100 35
$1,800 32 30
$1,500 25
$1,200 20 17 $900 15
$600 10 6 $300 5
1,524 584 1,291 989 519 2,945 3 2,150 1,600 3 $ $ $ $ $ $ 0 $ 0 $ $0 0 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2019 2019
M&A* IPO/RTO**
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 15 TOP DISCLOSED VC EXITS // H1 2019
vc investors company sector exit transaction acquired by close date $ mil.
CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), INOVIA CAPITAL INC., TERALYS CAPITAL, INVESTISSEMENT LIGHTSPEED POS INC. ICT IPO IPO ON TMX 3/8/2019 $1,083 QUÉBEC, ACCEL
BDC HEALTCARE FUND, FONDS DE SOLIDARITÉ FTQ, DOMAIN MILESTONE ASSOCIATES LLC, VENROCK ASSOCIATES, NOVO NORDISK LIFE SCIENCES IPO IPO ON NASDAQ 5/8/2019 $468 PHARMACEUTICALS INC. A/S, FORBION CAPITAL, GO CAPITAL LLC, PAPPAS CAPITAL
MARS IAF, SUMMIT PARTNERS AERYON LABS INC. ICT M&A FLIR SYSTEMS 1/28/2019 $265
PLAZA VENTURES, AZURE CAPITAL PARTNERS, FANXCHANGE LIMITED ICT M&A VIVID SEAT 4/11/2019 $80 GIBRALTAR VENTURES
LUMIRA CAPITAL, INVERREADY EDESA BIOTECH LIFE SCIENCES RTO RTO ON NASDAQ 6/7/2019 $49
There were 15 additional M&A exits totalling $174M
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 16
MOST ACTIVE VC FIRMS // FUNDS // H1 2019
# Rounds Size of Total Rounds* (Cdn$ mil)
BDC Capital SIZE OF TOTAL 22 $252 MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDS ROUNDS* (CDN$ MIL) Real Ventures 18 $133 REAL VENTURES 18 $133 Desjardins Capital 16 $98 PANACHE VENTURES 15 $31 CYCLE CAPITAL MANAGEMENT/ECOFUEL 13 $132 Fonds de solidarité FTQ 15 $307 INOVIA CAPITAL INC. 10 $61 IGAN PARTNERS INC. 7 $44 Panache Ventures 15 $31 RELAY VENTURES 7 $31 ENERTECH CAPITAL 5 $15 Investissement Québec 13 $159 VANEDGE CAPITAL PARTNERS LTD 4 $47 Cycle Capital Management/Ecofuel 13 $132 BLUESKY EQUITY LTD. 4 $21 MaRS IAF 11 $20 inovia Capital Inc. 10 $61
SIZE OF TOTAL SIZE OF TOTAL SIZE OF TOTAL MOST ACTIVE PENSION, RETAIL, # ROUNDS ROUNDS* MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDS ROUNDS* MOST ACTIVE GOVERNMENT FUNDS # ROUNDS ROUNDS* CORPORATE & OTHER PUBLIC FUNDS (CDN$ MIL) (CDN$ MIL) (CDN$ MIL) DESJARDINS CAPITAL 16 $98 ESPRESSO CAPITAL LTD. 31 $18 BDC CAPITAL 22 $252 FONDS DE SOLIDARITÉ FTQ 15 $307 DESJARDINS CAPITAL 10 $4 INVESTISSEMENT QUÉBEC 13 $159 ANGES QUÉBEC CAPITAL 3 $7 CIBC INNOVATION BANKING 7 $29 MARS IAF 11 $20 QUANTIUS INC. 4 $2 NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 9 $5 FONDS DE SOLIDARITÉ FTQ 3 $6 INNOVACORP 8 $3 * Total deal values - includes all participating investors BDC ICE FUND 7 $37 ANGES QUÉBEC 4 $9
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 17 PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 PRIVATE EQUITY HIGHLIGHTS // H1 2019
Key Findings
$3B was invested over 158 deals in the second quarter of 2019, 54% higher than There were 51 deals in Montreal-based companies (18%) totalling $1.1B followed the amount invested in the previous quarter but 63% lower than the same quarter by Toronto-based companies which captured a 8% share of activity with 22 deals from last year worth $779M The average YTD deal size ($18.8M) was less than half the average deal size in A record share of deal flow (20%) went into ICT companies, 3 percentage points the previous 3-year period between 2016-2018 ($35.4M) higher than its share in 2017 and 2018; the Industrial and Manufacturing sector With the exception of a single $1.4B mega-deal all other deals with disclosed maintained a 21% share values were below $500M with 66% (192 out of 289) of them under $25M 4 out of every 10 were debt deals with an average deal size of $7M which is The largest disclosed PE deals included: 9% lower than than last year The pace of PE exits slowed with only 15 M&A exits (totalling $851M). These included: $1.4B mega-buyout by Thoma Bravo LLC of privately held London-based Autodata Solutions Inc. The $570M corporate acquisition of Toronto-based Intelex Technologies Inc. from HarbourVest Partners, LLC and JMI Equity $445M acquisition of Toronto-based Gluskin Sheff + Associates Inc. by ONEX 6 out of every 10 PE deals were in the province of Quebec totalling $1.8B; Ontario The $260M acquisition of Langley-based 4Refuel Canada LP by Finning captured a fifth of deal flow totalling $2.4B International Inc. A quarter of YTD deal flow involved buyouts totalling $2.2B with Ontario-based companies garnering the largest share at 39% (28 deals totalling $1.9B)
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 19 PRIVATE EQUITY HEAT MAP BUYOUT & ADD-ON DEALS ONLY // H1 2019
total #
total 72 deals $2.2B
18 7 15 1 1 28 2 $211M BC $6M Alberta na na Saskatchewan na New Brunswick Manitoba $82m $1.9b Québec Ontario
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 20 PRIVATE EQUITY HEAT MAP PE GROWTH DEALS ONLY // H1 2019
total #
total 57 deals $1b
4 3 2 35 12 1 $170M BC $91M Alberta $6M $16m Prince Edward Saskatchewan $444m Island $292M Québec Ontario
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 21 PRIVATE EQUITY HEAT MAP ALL PE DEALS // H1 2019
total # 289 deals total $4.9b 31 16 171 2 7 1 59 2 $466M $16m BC $171M Prince Edward Island Alberta $9M Saskatchewan $3M $0m Manitoba $1.8b New Brunswick $2.4b Québec Ontario
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 22 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY $ Millions Invested # Deals
$15,000 200 178 $13,500 180 167 166 158 $12,000 152 160 146 139 158 $10,500 154 140 124 $9,000 117 133 131 120 124 104 $7,500 113 114 100
$6,000 91 80
$4,500 60
$3,000 40
$1,500 20 $7,053 $1,869 $11,375 $2,552 $3,221 $3,370 $3,038 $4,179 $5,329 $8,780 $7,554 $4,673 $6,767 $8,095 $1,959 $5,900 $1,923 $2,969 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017 2018 2019 TOTAL: TOTAL: TOTAL: TOTAL: TOTAL: 425 DEALS 542 DEALS 613 DEALS 600 DEALS 289 DEALS $22.9B $13.8B $26.4B $22.8B $4.9B
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 23 TOP 10 DISCLOSED CANADIAN PE DEALS // H1 2019
company name province firms involved in transaction sector $ mil
AUTODATA SOLUTIONS, INC ONTARIO THOMA BRAVO, LLC ICT $1,350
GLUSKIN SHEFF + ASSOCIATES INC. ONTARIO ONEX CORPORATION FINANCIAL $445
BDC CAPITAL INC., BMO CAPITAL PARTNERS, FONDACTION CSN, INDUSTRIAL & GROUPE JLD QUÉBEC $103 FONDS DE SOLIDARITÉ FTQ MANUFACTURING
GOODLIFE FITNESS CENTERS, INC. ONTARIO PENFUND INC. CONSUMER & RETAIL $100
PDFTRON SYSTEMS, INC. BC SILVERSMITH CAPITAL PARTNERS ICT $95
STEEL REEF ALBERTA INSTARAGF ASSET MANAGEMENT INC., PFM CAPITAL INC. OIL & GAS, POWER $91 INFRASTRUCTURE CORP.
123 DENTIST LTD. BC PELOTON CAPITAL MANAGEMENT LIFE SCIENCES $75
ESENTIRE, INC. ONTARIO EDISON PARTNERS, GEORGIAN PARTNERS INC., WARBURG PINCUS LLC ICT $63
INDUSTRIAL & JLD - LAGUË QUÉBEC FONDACTION CSN, FONDS DE SOLIDARITÉ FTQ $58 MANUFACTURING
There were 8 undisclosed deals totalling $1.3B that were not included in this table
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 24 PE ACTIVITY BY DEAL SIZE // H1 2019
$ Millions Invested # Deals 406 $16,000 400 362 368 $14,400 360 12,749
$12,800 $ 320
$11,200 280
$9,600 240 7,630
$8,000 $ 200 183 6,321 192 6,292 $ $6,400 $ 160 4,797 4,782 4,800 $ $ $ 4,034 $4,800 4,093 120 3,250 $ 3,212 3,300 $ 3,106 2,874 $ 2,739 $ $ $ $
$ $ 3,200 2,167 80 61 1,794 1,950 1,677 1,627 $ 1,490 $ 1,290 1,029 $ 1,350 $ 31 33 $ 910 $ 836 $ $ $ $ 1,600 56 49 509 40
$ 14 19 $ 7 11 7 4 $ 3 3 3 37 18 1 0 2 1 1 1 0 1 0 $0 0 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2019 2019 2019 2019 2019 2019
< $25M $25M - $100M $100M - $500M $500M - $1B $1B - $2.5B $2.5B+
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 25 TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // H1 2019 #1 montréal $1.1b 51 DEALS Total Deals $ Millions
1. Montreal 51 $1,070
2. Toronto 22 $779
3. Québec 20 $82
4. Montérégie 17 $149
5. Vancouver 15 $153
6. Saguenay-Lac-St-Jean/Côte-Nord 15 $39
7. Calgary 14 $166
8. Chaudière-Appalaches 14 $61
9. Laval 12 $236 5 7 10. Estrie 6 8 $10 3 9 8 1 4 10 2
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 26 PE SECTOR BREAKDOWN // H1 2019
# Deals $ Millions
Industrial & Manufacturing 60 $376
ICT 58 $2,536
Consumer & Retail 33 $628
Business Products & Services 31 $216 Agri-Forestry 28 $171 most active sector Life Sciences 15 $123 industrial & manufacturing Automotive & Transportation 15 $57 Financial 11 $448 60 deals Oil & Gas, Power 11 $143
CleanTech 10 $48
Mining & Resources 7 $107
Real Estate 6 $33
Others 4 $9
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 27 PE EXITS // 2015–H1 2019
Exit Value ($ Millions) # Exits * includes transactions with undisclosed values ** IPO valuation
$14,000 140 137 130 $12,000 120 110 $10,000 100 90 82 $8,000 80 70
$6,000 60 60 50 50 $4,000 40 30
$2,000 20 15 8
$4,800 7 $2,553 4 10 $1,672 $3,408 6 $1,711 5 $3,710 $12,812 $7,017 $2,790 $8,464 $851 $2,161 $11 1 0 4 0 1 0 0 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2015 2016 2017 2018 H1 2019 2019 2019
IPO/RTO** M&A* SECONDARY BUYOUT*
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 28 TOP DISCLOSED CANADIAN PE EXITS // H1 2019
Intelex Technologies Inc. bought by #1 Industrial Scientific $570m seller company name buyer $ mil
HARBOURVEST PARTNERS, INTELEX TECHNOLOGIES INC. INDUSTRIAL SCIENTIFIC $570 LLC, JMI EQUITY
KELSO & COMPANY 4REFUEL CANADA LP FINNING INTERNATIONAL INC. $260
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 29 MOST ACTIVE PE INVESTORS // H1 2019 most active pe firm desjardins Capital # Deals $ Millions*
Desjardins Capital 69 $383 69 deals
BDC Capital Inc. 55 $169
Fonds de solidarité FTQ 52 $1,213
Fondaction CSN 19 $272 Espresso Capital Ltd. 11 $13 First West Capital 7 $36 Investissement Québec 6 $108 Caisse de dépôt et placement du Québec (CDPQ) 5 $193 PFM Capital Inc. 5 $106
* Total deal values – includes all participating investors
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 30
CVCA METHODOLOGY // VENTURE CAPITAL
VENTURE CAPITAL DATA: Verified completed equity, quasi-equity venture capital and venture debt deals only (non-equity or project-based government funding, pharmaceutical development deals, venture capital-backed acquisitions, and angel financing are not included)
vc development stages
VENTURE DEBT SHORT-TO-MEDIUM TERM, NON-DILUTIVE DEBT INSTRUMENT WITH NO EQUITY RIDER.
SEED STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL.
EARLY STAGE COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE.
PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING LATER STAGE ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE.
SIGNIFICANT MINORITY INVESTMENT TO DRIVE GROWTH AND SCALE WHICH CAN BE COMBINED WITH A SECONDARY GROWTH TRANSACTION TO FACILITATE LIQUIDITY FOR EXISTING VC INVESTORS
vc sectors
COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, ICT MOBILE AND TELECOM TECHNOLOGIES AND SERVICES.
BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED LIFE SCIENCES PRODUCTS AND SERVICES.
ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER CLEANTECH ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES.
AGRIBUSINESS TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 31
CVCA METHODOLOGY // PRIVATE EQUITY
PRIVATE EQUITY DATA: Dataset includes only completed private equity deals (announced but yet to be completed deals are not included)
pe deal type
BUYOUT INVESTMENT FOR THE CONTROL OF A PORTFOLIO COMPANY, INCLUDING PLATFORM CREATION, SECONDARY BUYOUT
GROWTH SIGNIFICANT MINORITY INVESTMENT INTO A PORTFOLIO COMPANY, THROUGH NEW CAPITAL INFUSION AND RECAPITALIZATION
ADD-ON CORPORATE ACQUISITIONS BY MAJORITY CONTROLLED PE BACKED PORTFOLIO COMPANIES
DEBT DEBT INVESTMENT INTO PORTFOLIO COMPANIES
INFRASTRUCTURE INVESTMENTS INTO DEVELOPMENT AND MANAGEMENT OF INFRASTRUCTURE ASSETS BUT PE DOES NOT OWN THE UNDERLYING ASSETS
pe sectors
AGRI-FORESTRY AGRICULTURE, FOODS AND FORESTRY
AUTOMOTIVE & TRANSPORTATION TRANSPORTATION, LOGISTICS AND RELATED SERVICES
BUSINESS PRODUCTS & SERVICES BUSINESS PRODUCTS AND SERVICES
ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND CLEANTECH OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 32
CVCA METHODOLOGY // PRIVATE EQUITY
continued
pe sectors
CONSUMER & RETAIL CONSUMER PRODUCTS AND SERVICES, BRICK AND MORTAR RETAIL
FINANCIAL FINANCIAL SERVICES
COMPUTER HARDWARE/SOFTWARE & SERVICES, INTERNET SOFTWARE & SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, ICT MOBILE & TELECOM AND SERVICES
INDUSTRIAL & MANUFACTURING EQUIPMENT AND MATERIAL MANUFACTURING
BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED LIFE SCIENCES PRODUCTS AND SERVICES
MINING & RESOURCES NON OIL AND GAS NATURAL RESOURCES
OIL & GAS, POWER OIL & GAS, POWER AND UTILITIES
REAL ESTATE PROPERTY DEVELOPMENT AND MANAGEMENT
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H1 2019 | 33 ABOUT AND CONTACT To obtain estimates for additional custom InfoBase data reports please contact [email protected]
Authors Darrell oversees all data related to Canadian private capital investments, exit and fundraising activities for the CVCA. Darrell has held senior positions at several global organizations including the Toronto Stock Exchange, Institutional Limited Partners Association, Thomson Reuters, Glaxosmithkline and the Interac Association. In About CVCA between these, he also started his own successful management consulting company. We’re how collaboration happens and how innovation and growth thrive. He has worked in New York, London and Shanghai, but Toronto remains his favourite working city. He brings to the CVCA a passion for telling compelling stories with data. The CVCA is Canada’s professional association for the venture capital and private equity industry. Darrell is currently on the board of a non-profit social housing in Peel, a member of Our services and support establish a favourable and competitive ecosystem and lay the foundation Volunteer Toronto as well as an active volunteer with Woodgreen Community Services. for greater collaboration, innovation, growth and market intelligence. We strongly advocate for fair He holds a BA in Philosophy/History from the University of Western Ontario and an and competitive policy to keep our industry energized and future-ready. DARRELL PINTO MBA from the Rotman School of Management. From coast to coast, we bring members together; connecting private capital professionals to VP, Research & Industry [email protected] | 416-487-0519 ext. 208 eachother generating meaningful partnerships, enabling connections to foster and knowledge Advancement to prosper. We’re also the nation’s ultimate resource for data on Canadian private capital investments.
Please visit cvca.ca David executes research on venture capital and private equity deals within Canada. David is responsible for monitoring industry activity and maintaining the CVCA’s Infobase by entering data, including investments, exits, deals and fundraising activities on a daily @CVCACanada CVCA basis. David holds a BA in Philosophy and Psychology from the University of Toronto. CVCA - Canadian Venture Capital and Private Equity Association
[email protected] | 416-487-0519 ext. 202 372 Bay St., Suite 1201 Toronto, ON M5H 2W9
DAVID KORNACKI Associate, Research & Product