Canadian companies raised more than $3 billion in venture capital in the first half of 2023, with American VCs providing the lion’s share of the money, according to CPE Analytics.
That's still down from the first half of 2022 -- $4.7 billion -- but an improvement over the first quarter of 2023.
“Canadian venture capital (VC) recovered from its recent low of $1.3 billion in Q1, 2023 to report $1.95 billion in Q2 2023 in disbursements,” says CPE Analytics, which tracks Canadian financings.
“For the first half of 2023, Canadian VC disbursements reached $3.25 billion, almost at par with that of Q1 2022, representing 62% decreases from the same period in 2022.”
American VCs invested $1.43 billion in Canadian companies, accounting for 44 per cent of total VC investment in the first half of 2023. Canadian investors accounted for 40 per cent and international investors 16 per cent.
While ICT (information and communications technology) remained the largest sectoral magnet for VC funding, cleantech developed “momentum” in 2023, while fintech languished.
"This data reveals that VC cleantech investment in Canada in H1, 2023 appears to be developing some momentum, coming off a strong 2022,” said Richard Rémillard, president of Rémillard Consulting Group (RCG).
“However, fintech investing is firmly in the doldrums. Unsurprising, given that fintech investing has slowed down in a number of comparator jurisdictions but at the same time surprising given the intense competition in financial services.”
Regionally, Ontario companies attracted the most venture capital. B.C. companies attracted just $445 million in the first half of 2023, compared to $2.3 billion in the first half of 2022.
“Ontario regained its position as the top VC recipient, securing $1.59 billion well ahead of $696 million, $455 million, and $365 million received by Quebec, B.C. and Alberta companies respectively,” CPE Analytics said.