VC & PE QUÉBEC MARKET OVERVIEW // Q3 2020 CONTENTS PARTICIPATING DATA CONTRIBUTORS .......................................................................3 PRIVATE EQUITY QUÉBEC MARKET OVERVIEW ..................................................... 18 VC & PE ACTIVITY ........................................................................................................................................ 4 FOREWORD ................................................................................................................................................... 19 VC & PE ACTIVITY BY ADMINISTRATIVE CENTRE .............................................................................. 5 QUÉBEC PRIVATE EQUITY HIGHLIGHTS ............................................................................................ 20 VENTURE CAPITAL QUÉBEC MARKET OVERVIEW ....................................................6 PRIVATE EQUITY HEAT MAP .................................................................................................................. 21 FOREWORD ..................................................................................................................................................... 7 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY IN QUÉBEC ........................................ 22 QUÉBEC VENTURE CAPITAL HIGHLIGHTS .......................................................................................... 8 PE ACTIVITY BY DEAL SIZE .................................................................................................................... 23 VENTURE CAPITAL HEAT MAP ................................................................................................................. 9 PE SECTOR BREAKDOWN ...................................................................................................................... 24 QUARTER-OVER-QUARTER VC INVESTMENT IN QUÉBEC ........................................................... 10 TOP DISCLOSED QUÉBEC PE DEALS ................................................................................................. 25 VC ACTIVITY BY DEAL SIZE ..................................................................................................................... 11 TOP DISCLOSED PE EXITS IN QUÉBEC .............................................................................................. 26 VC SECTOR BREAKDOWN ....................................................................................................................... 12 MOST ACTIVE PE INVESTORS IN QUÉBEC ....................................................................................... 27 VC STAGE BREAKDOWN .......................................................................................................................... 13 CVCA METHODOLOGY ................................................................................................ 28 VENTURE DEBT HEAT MAP ..................................................................................................................... 14 VENTURE CAPITAL ................................................................................................................................... 28 TOP 10 DISCLOSED QUÉBEC VC DEALS ............................................................................................ 15 PRIVATE EQUITY ................................................................................................................................. 29, 30 TOP DISCLOSED VC EXITS ..................................................................................................................... 16 CVCA/RÉSEAU CAPITAL ABOUT & CONTACT ......................................................... 31 MOST ACTIVE VC INVESTORS IN QUÉBEC ......................................................................................... 17 source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 2 PARTICIPATING DATA CONTRIBUTORS CVCA thanks the following firms who participated in its Q3 2020 survey. Venture Capital Firms Private Equity & LSVCC Firms Limited Partners 7 Gate Ventures FACIT Panache Ventures AIP Private Capital m2s Capital Alberta Enterprise Corporation Accelerate Fund First Ascent Ventures Pangaea Ventures ARC Financial Mink Capital BDC Venture Capital AmorChem Fund Fonds Innovexport Quark Venture Ardenton Capital Corporation Mosaic Capital Corporation Bluesky Equities Amplify Capital Framework Ventures Radical Ventures BDC Growth Equity Novacap Management Inc. Caisse de dépot et placement du Québec Amplitude Ventures Freycinet Ventures Real Ventures BMO Capital Partners ONEX Corporation Desjardins Capital Anges Quebec Good News Ventures Relay Ventures Bond Capital PenderFund Capital Fondaction Management Anges Quebec Capital GreenSoil Investments Renewal Funds CAI Capital Partners Fonds de solidarité FTQ Persistence Capital Partners Arctern Ventures Highline Beta Rhino Ventures Canadian Business Growth Fund Fonds de solidarité FTQ (Regional) PFM Capital Inc AVAC Ltd. Hike Ventures Roadmap Capital Capital Financière Agricole HarbourVest Partners (Canada) Ltd PRIVEQ Capital Funds Azure Capital Partners iGan Partners Round 13 Clairvest Group Inc. Investissement Quebec Regimen Equity Partners BCF Ventures Information Venture Partners Sectoral Asset Clearspring Capital Partners Kensington Capital Partners Ltd. Management Inc. Seafort Capital Brightspark Capital Innovacorp First West Capital Northleaf Capital Partners Tandem Expansion Searchlight Capital Partners CIBC Innovation Banking inovia Capital Founders Group of Food Ontario Capital Growth Corporation TandemLaunch Companies Inc. Tricor Pacific Capital Ltd. CIC Capital Ventures Island Capital Partners Ontario Teachers’ Pension Plan TELUS Ventures Fulcrum Capital Partners TriWest Capital Partners Clanton Capital Inc. Klass Capital Top Renergy Highland West Capital Vistara Capital Partners Conexus Venture Capital Luge Capital Trellis Capital InstarAGF Asset Management Westcap Mgt. Ltd CTI Life Sciences Lumira Ventures Vanedge Capital Ironbridge Equity Partners Western Investment Company Dash40 Ventures MaRS IAF of Canada Limited Partners Kayne Capital District Ventures LP McRock Capital XPND Capital Venbridge Ltd. Killick Capital Inc. Emerald Technology Ventures Metiquity Version One Ventures Lex Capital Management EnerTech Capital Mistral VP White Star Capital Espresso Capital Ltd. NAventures (National Bank of Canada) Whitecap Venture Evok Innovations Partners New Brunswick Innovation If you would like to have your firm included in Ferst Capital Foundation Yaletown Partners future reports, please contact [email protected] source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 3 VC & PE ACTIVITY // YTD Q3 2020 Venture Capital Private Equity 117 $796M deals 261 deals $5B total # total 378 deals invested $5.8b source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 4 VC & PE ACTIVITY BY ADMINISTRATIVE CENTRE // YTD Q3 2020 Nord-du-Québec / Abitibi-Témiscamingue 9 Saguenay-Lac-St-Jean / Côte-Nord 8 2 Bas-Saint-Laurent Laurentides Mauricie 3 Québec 3 3 1 Chaudière-Appalaches 35 9 Estrie Lanaudière 12 1 9 Centre-du- 13 1 Québec Laval Outaouais 5 1 3 7 montréal Venture Capital 5 1 most active region Montérégie Private Equity Montréal 120 92 36 2 total # 212 DEALS source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 5 VENTURE CAPITAL QUÉBEC MARKET OVERVIEW // Q3 2020 FOREWORD Québec VC Investment Drops Over 65% YoY and QoQ CAD $173M venture capital was invested over 31 deals in the third quarter of 2020, which is almost 3x lower than the third quarter of last year (CAD $516M), and Q2 of this year (CAD $514M). As a result of the decrease in activity in Q3 2020, the average deal size in Q3 2020 was only CAD $5.6M, bringing down the YTD average deal size to CAD $6.8M; the lowest YTD average deal size since 2016 (CAD $5.9M). source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 7 QUÉBEC VENTURE CAPITAL HIGHLIGHTS // YTD Q3 2020 Key Findings There were 13 VC exits in YTD Q3 2020 VC dollars invested by Sector: Deal size in Q3: Information, Communication & Technology: 44% ($348M <$5M: 18 deals, YTD 79 deals with $102M over 49 deals) $5-$20M: 4 deals, YTD 25 deals with $228M Life Sciences: 34% ($270M over 26 deals) $20-$50M: 3 deals, YTD 4 deals with $148M Cleantech: 4% ($29M over 9 deals) VC activity by geography: By Stage: Provinces: Late stage: 50% ($400M over 17 deals, $23.5M in Ontario: 44% of all VC dollars in Canada ($1.5B average deal size) across 168 deals) Early stage: 40% ($316M over 46 deals, $6.7M in average Quebec: 23% ($796M across 117 deals) deal size) BC: 22% ($758M across 53 deals) Seed stage: 9% ($72M over 52 deals, $1.4M in average Quebec Administrative Centres: deal size) Montréal: 79% of all VC deals closed in the province (92 deals) Québec: 8% (9 deals) Laval: 6% (7 deals) source: VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 8 VENTURE CAPITAL HEAT MAP // YTD Q3 2020 total # total 360 deals $2.8B 53 40 5 $3M 3 Newfoundland 117 and Labrador 4 1 11 11 $6M $758M 168 Prince Edward Island British $304M Columbia Alberta $10M $63M Saskatchewan $29M $7M Nova Scotia Manitoba $796M New Brunswick $1.6B Québec source: Ontario VENTURE CAPITAL & PRIVATE EQUITY QUÉBEC MARKET OVERVIEW // Q3 2020 | 9 QUARTER-OVER-QUARTER VC INVESTMENT IN QUÉBEC $ Millions Invested # Deals $550 110 $500 100 $450 90 $400 80 $350 70 61 $300 55 60 50 51 $250 48 47 50 40 41 $200