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VC & PE CANADIAN MARKET OVERVIEW
// 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 2
CONTENTS
PARTICIPATING DATA CONTRIBUTORS ............................................................................... 3
FOREWORD ...................................................................................................................................... 4
VENTURE CAPITAL CANADIAN MARKET OVERVIEW .................................................... 5 VENTURE CAPITAL HIGHLIGHTS ................................................................................................................................ 6
VENTURE CAPITAL HEAT MAP ..................................................................................................................................... 7 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY ......................................................................... 8 VC ACTIVITY BY DEAL SIZE ............................................................................................................................................. 9 TOP DISCLOSED CANADIAN VC DEALS ............................................................................................................... 10 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES .................................................................... 11 VC SECTOR BREAKDOWN ............................................................................................................................................. 12 VC STAGE BREAKDOWN ................................................................................................................................................. 13 VC EXITS ....................................................................................................................................................................................... 14 TOP DISCLOSED VC EXITS .............................................................................................................................................. 15MOST ACTIVE VC FIRMS // FUNDS ........................................................................................................................ 16
PRIVATE EQUITY CANADIAN MARKET OVERVIEW ...................................................... 17 PRIVATE EQUITY HIGHLIGHTS .................................................................................................................................... 18
PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY ............................................... 19
PRIVATE EQUITY HEAT MAP // ALL PE DEALS ............................................................................................. 20 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY ....................................................................... 21 TOP DISCLOSED CANADIAN PE DEALS OVER $500M ............................................................................ 22 PE ACTIVITY BY DEAL SIZE ............................................................................................................................................ 23 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES ................................................................... 24 PE SECTOR BREAKDOWN .............................................................................................................................................. 25 PE EXITS ....................................................................................................................................................................................... 26 TOP 10 DISCLOSED CANADIAN PE EXITS .......................................................................................................... 27MOST ACTIVE PE INVESTORS .................................................................................................................................... 28
CVCA METHODOLOGY ............................................................................................................. 29 VENTURE CAPITAL .............................................................................................................................................................. 29 PRIVATE EQUITY ............................................................................................................................................................. 30, 31
AUTHORS, ABOUT CVCA AND CONTACT INFO ............................................................. 32
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 3
PARTICIPATING DATA CONTRIBUTORS
Alberta Enterprise Corporation
Alberta Teachers’ Retirement Fund (ATRF)
BDC Capital Inc.
Caisse de dépôt et placement du Québec (CDPQ)
Capital Régional et Coopératif Desjardins
Dancap Private Equity Inc
Fondaction CSN
Fonds de solidarité FTQ
Fonds de solidarité FTQ (Regional)
HarbourVest Partners, LLC
Investissement Quebec
Kensington Capital Partners Limited
Northleaf Capital Partners
Ontario Teachers’ Pension Plan (OTPP)
Teralys Capital
PARTICIPATING LIMITED PARTNERS
If you would like to have your firm included in future reports, please contact either [email protected] or [email protected]
PARTICIPATING PRIVATE EQUITY & LSVCC FIRMS
32 Degrees Capital
AIP Private Capital
Altas Partners LP
Arc Financial
Ardenton Capital Corporation
ATB Capital
Birch Hill Equity Partners
Brookfield Asset Management
CIEL Capital
Clairvest Group Inc.
First West Capital
Fulcrum Capital Partners
GrowthWorks Atlantic Venture Fund Ltd.
Growthworks Working Opportunity Fund (EVCC) Ltd.
Highland West Capital
Innovation Platform Capital
InstarAGF Asset Management
Ironbridge Equity Partners
Lex Capital Management
m2s Capital
Mink Capital
Mosaic Capital Corporation
Novacap Management Inc.
Parallel 49 Equity
Persistence Capital Partners
PFM Capital Inc
Pillarfour Capital
PRIVEQ Capital Funds
Regimen Equity Partners
Roynat Capital Inc.
Searchlight Capital Partners
TIMIA Capital Corp
Tricor Pacific Founders Capital
TriWest Capital Partners
VERTU Capital
Westcap Mgt. Ltd
Western Investment Company of Canada Limited
XPND Capital
CVCA thanks the following firms who participated in itsQ4 2017 survey.
Accelerate Fund
Amorchem Venture Fund
Anges Quebec
Anges Quebec Capital
Avrio Ventures Management Corp
Azure Capital Partners
Brightspark Ventures
CTI Life Sciences
Cycle Capital Management/Ecofuel
Difference Capital
Emerald Technology Ventures
Emerillon Capital
EnerTech Capital
Espresso Capital Ltd.
Eventi Capital Partners
Evok Innovations
Fight Against Cancer Innovation Trust
Freycinet Ventures
Georgian Partners
Golden Venture Partners
Good News Ventures
Green Acre Capital
GreenSoil Investments
iGan Partners
Information Venture Partners
Innovacorp
iNovia Capital
Investeco Capital Corp
Lumira Capital
MaRS Catalyst Fund
MaRS IAF
McRock Capital
New Brunswick Innovation Foundation
Northumberland CFDC
OMERS Ventures
Pangaea Ventures
Pelorus Venture Capital Ltd.
Plaza Ventures
Quark Venture
Real Ventures
Relay Ventures
Renewal Funds
Roadmap Capital
Ryerson Futures
ScaleUP Ventures
Tandem Expansion
TandemLaunch
TEC Venture Angels
Top Renergy
TVM Life Science Management Inc.
Vancity Capital Corp
Vancouver Founders Fund
Vanedge Capital Partners
VentureLink Funds
Versant Ventures
Version One Ventures
Wellington Financial
White Star Capital
Whitecap Venture Partners
Yaletown
PARTICIPATING VENTURE CAPITAL FIRMS
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 4
FOREWORD
Increase in Mega Deals Drives Canadian VC; Rebound Year for Canadian PE Investment
VENTURE CAPITALCanadian venture capital investment grew 11% in 2017 with $3.5B invested over 592 deals compared to the $3.2B invested over 534 deals in 2016. This is the latest increase, following years of steady investment growth for Canadian VC across the entire spectrum of stages in the ecosystem. Canadian venture capital investment is now approximately double the size it was just five years ago.
The record number of 15 mega deals ($50M+) included three deals over $100M. Building on the 10 mega deals in 2016, investors continued to scale high quality maturing Canadian startups. The three deals in 2017 over $100M were in Quebec-based companies and included the $207M Series D in Montreal-based Lightspeed POS Incorporated from a syndicate including Caisse de dépôt et placement du Québec (CDPQ), iNovia Capital and Teralys Capital; the $141M Series A financing of Montreal-based Element AI with participation from Real Ventures; and, the $128M Series C of Quebec City-based LeddarTech with participation from Fonds de solidarité FTQ.
Activity in the smaller end of the deal spectrum also saw healthy growth, showcasing strong support for entrepreneurs at very early stages. There were 162 small deals (<$500k), a 33% increase compared to 2016 (122 deals); there was a 6% year-over-year increase in deals between $1M-$5M.
“The excitement many of us are feeling in the Canadian venture capital ecosystem is being validated by the data,” said Mike Woollatt, CEO, CVCA. “We’re seeing historic investment in cutting-edge businesses across the country underlining the confidence in Canadian innovation.”
Information communications technology (ICT) companies received the majority (71%) of total VC dollars invested ($2.5B over 375 deals) while life science companies received a fifth of the dollars invested ($696M over 105 deals).
2017 also saw a rebound from last year’s exit slump with 39 exits totalling $1.7B (compared to only 33 exits totalling $0.6B in 2016).
PRIVATE EQUITYTotal PE investment in 2017 saw a dramatic year-over-year rise to $26.3B (compared to $13.8B in 2016) over 603 deals (compared to 542 deals in 2016); an incredible 90% year-over-year surge and results in a return to historically high levels seen in 2014 and 2015.
There were 14 deals in the $500M+ category (totalling $15.7B), doubling the seven large deals (totalling $7.1B) in 2016. Notable $1B+ deals this year included the $4.8B privatization of Toronto-based DH Corporation in Q2, the $2.2B acquisition of Montreal-based Garda World Security Corporation in Q1 and the $1.1B private placement in Montreal-based Osisko Gold Royalties Limited by La Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ in Q3.
“We continue to see increasing Canadian private equity investment in the industrial and manufacturing and ICT sectors,” said Mike Woollatt, CEO, CVCA. “The increase represents the continued evolution of the global economy and 2017 levels are a testament to Canada’s healthy investment climate.”
Almost a fifth (19%) of all PE deal deals in 2017 were closed in the industrial and manufacturing sector with information communications technology (ICT) companies receiving the second largest share at 16%. Since 2013, both these sectors have seen a dramatic increase in deal flow, with the industrial and manufacturing sector seeing a 216% increase while ICT experiencing a 263% increase in deal activity.
89 deals totalling $6.7B (15%) of all PE deals in 2017 were made in Montreal-based companies, while both Calgary-based (54 deals totalling $3.1B) and Montérègie-based (53 deals totalling $0.5B) companies each receiving a 9% share.
Fuelled by a high valuation environment, the exit floodgates opened in 2017. There have been more than twice the number of PE exits (149) compared to only 65 last year. There were six IPOs, including the $445M dual listing of the iconic Canada Goose on (TSE/NYSE: GOOS), the $300M TSX-debut of Jamieson Laboratories Ltd (TSE: JWEL), the $200M IPO of Neo Performance Materials (TSE: NEO) and the $200M IPO of Roots Corp (TSE: ROOT)
VC ecosystem attracting larger financing rounds in later stages highlighting quality of Canadian startups; $26.3B in PE invested over 603 deals in 2017 with amount invested and exits both doubling from previous year
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 5
VENTURE CAPITALCANADIAN MARKET OVERVIEW // 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 6
VENTURE CAPITAL HIGHLIGHTS // 2017
$739M was invested over 153 deals in the fourth quarter. This brings the total invested in 2017 to $3.5B over 592 deals, surpassing both last year’s deal count (534) and total invested ($3.2B) by 11%.
The average deal size ($5.98M) remains unchanged from last year’s high-water mark since 2013 ($5.19M).
The top 10 VC deals accounted for 27% of total dollars disbursed in 2017, slightly below the 31% share of 2016 dollars invested.
Building on the 10 $50M+ mega-deals (including four $100M+ deals) from the previous year, the ecosystem is continuing to attract larger rounds in later stages, underlining the quality of maturing Canadian start-ups. In 2017, there were a record number of $50M+ mega-deals (15), including 3 deals over $100M in the following Quebec-based companies:
Montreal-based Lightspeed POS Inc. raised a record $207M Series D round from a syndicate including CVCA members Caisse de dépôt et placement du Québec (CDPQ), iNovia Capital Inc. and Teralys Capital.
Real Ventures participated in Montreal-based Element AI’s $141M Series A round
Quebec City-based LeddarTech closed its $128M series C round from Fonds de solidarité FTQ.
Activity in the smaller end of the deal spectrum was robust, illustrating strong support for entrepreneurs at very early stages:
There were 162 small deals (<$500k), 33% more than last year (122). These deals averaged $200K.
There were 183 deals between $1M-$5M (totalling $468M), 6% more than the 172 deals (totalling $362M) in 2016. The average deal size in this category increased 22% from $2.1M to $2.6M.
$1.4B or 40% of dollars invested this year were in Ontario-based companies with 37% ($1.3B) going to Quebec-based companies and 18% ($646M) to BC-based companies.
Montreal-based companies received 28% ($983M over 132 deals) of total dollars disbursed, with Toronto-based companies receiving a 26% share ($907M over 146 deals) and Vancouver-based companies a 14% share ($513M over 77 deals).
ICT companies grabbed the lion’s share (71%) of total dollars invested in 2017 ($2.5B over 375 deals); this compares to a 61% share in 2016, 58% in 2015, 64% in 2014 and 56% in 2013.
Life sciences companies received a fifth of dollars invested ($696M over 105 deals) which is only just below the 23% share from 2016 ($733M over 104 deals).
The market for exits rebounded from last year’s slump with 39 exits totalling $1.7B (compared to only 33 exits totalling $0.6B in 2016). Exits greater than $100M included:
The $392M acquisition of Montreal-based Luxury Retreats by Airbnb.
$301M take-private acquisition of TSX Venture-listed TIO Networks by Paypal.
Montreal-based Clementia Pharmaceuticals IPO which raised $174M (NASDAQ: CMTA)
Markham-based Real Matters IPO which raised $157M (TSE: REAL)
The acquisition of Saint-Laurent-based Accedian Networks by Bridge Growth Partners for $133M.
Key Findings:
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 7
18091
2
15
236 30
$1,322m
$1,416MOntario
$646MBC
$37MAlberta
$5MManitoba
Québec
Nova Scotia$77M
New Brunswick
Newfoundland& Labrador
$16M
$6M
$14MSaskatchewan
2110
7
$3.5btotal592 dealstotal #
VENTURE CAPITAL HEAT MAP // 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 8
0
20
40
60
80
100
120
140
160
180
200
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1000
220
240
$1,100
$1,200
Q2 Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
$41
4
$33
9
$6
01
$54
0
$35
8
$41
4
$6
54
$6
13
$41
9
$6
65
$6
21
$58
5
$9
60
$72
4
85
81
102
97
110
93
111 122
134
140 142
130
127
147
Q3
$6
83
Q4
$8
41
Q1
$72
4
$8
98
Q3
$1,
178
Q4
$73
9
126134 137
149 153 153
TOTAL:365 DEALS
$1.9B
TOTAL:436 DEALS
$2.0B
TOTAL:545 DEALS
$2.3B
TOTAL:535 DEALS
$3.2B
TOTAL:592 DEALS
$3.5B
$ Millions Invested
# Deals
2013 2014 2015 2016 2017
QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 9
Total Deals $ Millions
< $100K
$100 - $500K
$500K - $1M
$1M - $5M
$5M - $20M
$20M - $50M
$50M +
32
130
69
183
101
24
15
$2
$30
$47
$468
$984
$800
$1,208
VC ACTIVITY BY DEAL SIZE // 2017
Mega-deals greatest number of
in the last 5 years15
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 10
TOP DISCLOSED CANADIAN VC DEALS // 2017
COMPANY NAME PROVINCE DISCLOSED VC FIRM(S) SECTOR STAGE $ MIL
LIGHTSPEED POS INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), INOVIA CAPITAL INC., INVESTISSEMENT QUÉBEC, TERALYS CAPITAL ICT LATER STAGE VC $207
ELEMENT AI INC. QUÉBECBDC CAPITAL INC., DATA COLLECTIVE, FMR LLC (FIDELITY), HANWHA INVESTMENT CORP, INTEL CAPITAL, MICROSOFT VENTURES, NATIONAL BANK OF CANADA, NVIDIA CORPORATION, REAL VENTURES
ICT EARLY STAGE VC $141
LEDDARTECH INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ ICT LATER STAGE VC $128
REPARE THERAPEUTICS INC. QUÉBEC BDC CAPITAL INC., CELGENE EUROPEAN INVESTMENT CO. LLC, FONDS DE SOLIDARITÉ FTQ, FONDS RÉGIONAUX DE SOLIDARITÉ FTQ, VERSANT VENTURE MANAGEMENT, LLC LIFE SCIENCES EARLY STAGE VC $91
VISION CRITICAL COMMUNICATIONS INC. BC
DIFFERENCE CAPITAL FINANCIAL INC., GEORGIAN PARTNERS INC., KENSINGTON CAPITAL PARTNERS LIMITED, NORTHLEAF CAPITAL PARTNERS, OMERS VENTURES MANAGEMENT INC., RECAPHEALTH VENTURES, TELUS VENTURES, W CAPITAL PARTNERS, WELLINGTON FINANCIAL LP
ICT LATER STAGE VC $76
MILESTONE PHARMACEUTICALS INC. QUÉBEC BDC CAPITAL INC., DOMAIN ASSOCIATES, L.L.C., FONDS DE SOLIDARITÉ FTQ, FORBION CAPITAL PARTNERS, NOVO NORDISK A/S, PAPPAS VENTURES LIFE SCIENCES LATER STAGE VC $71
VISIER INC. BC ADAMS STREET PARTNERS, LLC, FOUNDATION CAPITAL, SORENSON CAPITAL PARTNERS, SUMMIT PARTNERS ICT LATER STAGE VC $61
IGLOO INC. ONTARIO FRONTIER CAPITAL, INFORMATION VENTURE PARTNERS INC. ICT EXITS - VC $60
BORROWELL INC. ONTARIO EQUITABLE BANK, FIRSTONTARIO CREDIT UNION, PORTAG3 VENTURES, WHITE STAR CAPITAL INC. ICT EARLY STAGE VC $57
FRESHBOOKS ONTARIO ACCOMPLICE, LLC, GEORGIAN PARTNERS INC., OAK INVESTMENT PARTNERS ICT EARLY STAGE VC $57
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 11
TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES // 2017 #1 toronto
$907M 146 DEALS $907
$983
$513
$210
$148
$68
$11
$14
$5
$14
Total Deals $ Millions
1. Toronto
2. Montréal
3. Vancouver
4. Kitchener, Waterloo, Cambridge
5. Ottawa
6. Halifax
7. Fredericton
8. Estrie
9. Moncton
10. Saskatoon
146
132
77
37
21
19
18
11
10
10
1
87
10
425
39
6
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 12
0
40
80
120
160
200
240
280
320
400
360
440
520
480
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
$2,600
2016201520142013 2016201520142013 2016201520142013 201520142013
$1,
947
$20
8
$14
$18
5
2016 2017201720172017
234
274
329
332
375
113
104
5378
$48
8 $72
1
$73
3
$6
96
$39
4
$27
1
$1,
06
0 $1,
305
$1,
335
105
40
47 44 35 614
2027 24
$17
7
$13
8
47
$27
$42
$2,
498
$13
7
$9
8
VC SECTOR BREAKDOWN // 2013-2017
ICT CleanTechLife Sciences AgriBusiness
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 13
VC STAGE BREAKDOWN // 2013-2017
0
30
60
90
120
150
180
210
240
300
270
330
390
360
$0
$160
$320
$480
$640
$800
$960
$1,120
$1,280
$1,440
$1,600
$1,760
$1,920
$2,080
2016201520142013 2016201520142013 2016201520142013
$8
5
$13
5
$15
9
$21
4
$6
57
$1,
139
$8
24
$1,
06
8
$1,
210
$8
93
$1,
569
$1,
973
$1,
403
201720172017
108
138
180 178
142
178
220
261
106
238
117135
93
143
$1,
347
203
$20
5
Seed Early Stage Later Stage
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 14
VC EXITS* // 2013-2017
M&A IPO** RTO
* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES;
** IPO VALUATION
$ Millions Invested
# Deals
$0
$160
$320
$480
$640
$800
$960
$1,120
$1,280
$1,440
$1,600
0
5
10
15
20
25
30
35
40
50
45
2016201520142013 2016201520142013 2016201520142013
$6
83
$50
9
$1,
524
$58
2
$1,
166
$11
7
$19
$6
6
201720172017
28
33
43
31
46
4
0 11
20 0
$41
7
34
3
$34
6
$12
9
$53
7
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 15
TOP DISCLOSED VC EXITS* // 2017
VC INVESTORS COMPANY NAME SECTOR EXIT TRANSACTION ACQUIRED BY $ MIL.
INOVIA CAPITAL, TERALYS CAPITAL, CLARIDGE, INTERMEDIA PARTNERS, GROUPE DYNAMITE
LUXURY RETREATS INTERNATIONAL INC. ICT M&A AIRBNB $392
CORE INNOVATION CAPITAL, EDISON PARTNERS, INDUCTIVE CAPITAL, INTER-ATLANTIC GROUP, NAPIER PARK FINANCIAL PARTNERS
TIO NETWORKS CORP. ICT M&A PAYPAL $301
KENSINGTON CAPITAL, WHITECAP VENTURE PARTNERS, RADAR CAPITAL, WELLINGTON FINANCIAL REAL MATTERS INC. ICT IPO NA $157
FONDS DE SOLIDARITÉ FTQ, RHO CANADA VENTURES, SUMMIT PARTNERS, SKYPOINT CAPITAL CORPORATION ACCEDIAN NETWORKS INC. ICT M&A BRIDGE GROWTH
PARTNERS $133
BDC CAPITAL, LUMIRA CAPITAL, ELI LILLY AND COMPANY, CELGENE, CTI LIFE SCIENCES FUND, FONDS DE SOLIDARITÉ FTQ, PERCEPTIVE ADVISORS, TERALYS CAPITAL, NORTHLEAF VENTURE CATALYST FUND, BRACE PHARMA CAPITAL, MERLIN NEXUS, TVM LIFE SCIENCE MANAGEMENT INC.
ZYMEWORKS INC. LIFE SCIENCES IPO NA $87
KENSINGTON CAPITAL, NORTHLEAF CAPITAL, RECAPHEALTH VENTURES, DIFFERENCE CAPITAL, OMERS VENTURES, TELUS VENTURES, WELLINGTON FINANCIAL
VISION CRITICAL COMMUNICATIONS INC. ICT SECONDARY
SALEGEORGIAN PARTNERS,
W CAPITAL $76
INFORMATION VENTURE PARTNERS, ONTARIO CAPITAL GROWTH CORPORATION IGLOO INC. ICT M&A FRONTIER CAPITAL $60
REAL VENTURES VRVANA INC. ICT M&A APPLE $38
BDC CAPITAL, WESTCAP MANAGEMENT LTD., INVESTMENT SASKATCHEWAN
SOLIDO DESIGN AUTOMATION INC. ICT M&A SIEMENS $14
* THERE WERE 3 UNDISCLOSED EXITS IN THE TOP 10 THAT WERE EXCLUDED FROM THIS TABLE
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 16
MOST ACTIVE VC FIRMS // FUNDS // 2017MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDS
SIZE OF TOTAL ROUNDS*
(CDN$ MIL)
REAL VENTURES 58 $427
500 STARTUPS CANADA 26 $11
CYCLE CAPITAL MANAGEMENT/ECOFUEL 19 $140
INOVIA CAPITAL INC. 16 $395
IGAN PARTNERS INC. 11 $30
RELAY VENTURES 10 $90
YALETOWN PARTNERS INC 9 $40
GOOD NEWS VENTURES 8 $3
TOP RENERGY INC. (TRE) 8 $2
PORTAG3 VENTURES 7 $134
LUMIRA CAPITAL INVESTMENT MANAGEMENT INC. 7 $79
SCALEUP VENTURES 7 $34
VANCOUVER FOUNDER FUND 7 $15
MOST ACTIVE VC DEBT FIRMS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
ESPRESSO CAPITAL LTD. 84 $51
CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS (CRCD) 12 $2
TIMIA CAPITAL CORP 4 $3
MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS
SIZE OF TOTAL ROUNDS*
(CDN$ MIL)
CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS (CRCD) 46 $252
FONDS DE SOLIDARITÉ FTQ 29 $534
OMERS VENTURES MANAGEMENT INC. 10 $191
FONDACTION CSN 9 $19
MOST ACTIVE GOVERNMENT FUNDS # ROUNDSSIZE OF TOTAL
ROUNDS*(CDN$ MIL)
BDC CAPITAL 30 $188
NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 27 $15
MARS IAF 21 $38
INVESTISSEMENT QUÉBEC 14 $290
BDC IT VENTURE FUND 14 $183
INNOVACORP 13 $24
BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 9 $103
BDC HEALTHCARE FUND 8 $266
* TOTAL ROUND VALUES - INCLUDES ALL PARTICIPATING INVESTORS
# Rounds
Real Ventures
Capital Régional et Coopératif Desjardins (CRCD)
BDC Sector Funds**
BDC Capital
Fonds de solidarité FTQ
New Brunswick Innovation Foundation (NBIF)
500 Startups Canada
MaRS IAF
Cycle Capital Management/Ecofuel
iNovia Capital Inc.
Investissement Québec
Innovacorp
iGan Partners Inc.
OMERS Ventures Management Inc.
Relay Ventures
58
46
31
30
29
27
26
21
19
16
14
13
11
10
10
Size of Total Rounds* (Cdn$ mil)
$427
$252
$551
$188
$534
$15
$11
$38
$140
$395
$290
$24
$30
$191
$90** BDC HEALTHCARE FUND - 8 DEALS, $266M*;
BDC IT VENTURE FUND - 14 DEALS, $183M*; BDC ICE FUND - 9 DEALS, $103M*
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 17
PRIVATE EQUITYCANADIAN MARKET OVERVIEW // 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 18
Private equity activity climbed 12% compared to the same quarter last year ($4.2B to $4.7B).
This brings the total PE dollars invested in 2017 to $26.3B over 603 deals, a 90% spike compared to the $13.8B over 542 deals last year and a 15% increase over the 2015 total of $22.9B over 425 deals.
The number of $500M+ deals almost doubled to $15.7B (14 deals) accounting for 60% of total dollars invested in 2017 (compared to only $7.1B (7 deals) in 2016). These included the following three $1B+ mega-deals:
The $4.8B privatization of Toronto-based DH Corporation, the $2.2B acquisition of Montreal-based Garda World Security Corp. and the $1.1B private placement in Montreal-based Osisko Gold Royalties Ltd. by Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ.
Deal activity in all small-to-mid market segments have exceeded last year’s totals:
66 deals between $25M-$100M have surpassed the 2016 total (49) by 35% with a total value of $3.2B.
28 deals between $100M-$500M have doubled the 2016 total (14) with a total value of $5.9B.
15% (89 deals totalling $6.7B) of all PE deals went to Montreal-based companies, with Calgary- and Montérègie-based companies each receiving a 9% share (54 deals totalling $3.1B and 53 deals totalling $0.5B respectively). Toronto-based companies received a 7% share of deal flow (44 deals totaling $5.4B).
Almost a fifth (19%) of PE deals this year have been closed in the industrial & manufacturing sector with ICT companies receiving the second largest share (16%); both these sectors have been receiving a steadily increasing share of PE deal flow since 2013 when industrial & manufacturing captured only a 14% share and ICT a 10% share. Inversely, the oil and gas sector deal flow share has dropped from 19% in 2013 to 7% in 2017.
Six IPOs including the $445M dual listing of the iconic Canada Goose on (TSE/NYSE: GOOS), the $300M TSX-debut of Jamieson Laboratories Ltd (TSE: JWEL), the $200M IPO of Neo Performance Materials (TSE: NEO) and the $200M IPO of Roots Corp (TSE: ROOT).
There have been more than twice the number of PE exits (149) compared to 65 last year.
Secondary buyouts have contributed to almost half (46%) of the $7.4B in total exit value.
PRIVATE EQUITY HIGHLIGHTS // 2017
Key Findings:
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 19
302222
4 5
$1.2B$10m
$1.5B
$5.3b
na
$6.7bOntario
BCAlberta
Saskatchewan
Québec
Nova Scotia
50
$970MManitoba
4Prince Edward
Island
na
NewBrunswick
na
22
$15.9btotal
141 dealstotal #
PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY // 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 20
3306755
22 9
$3.1B$76m
$2.9B
$10.7b
na
$8.6bOntario
BCAlberta
Saskatchewan
Québec
Nova Scotia
110
$981MManitoba
5
Prince EdwardIsland
na2
$33mNew
Brunswick
3
$26.3btotal 603 dealstotal #
PRIVATE EQUITY HEAT MAP // ALL PE DEALS // 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 21
QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY
Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
0
20
40
60
80
100
120
140
160
180
200
$2,
530
$2,
933
$1,
846
$4,
120
$6
,277
$5,
250
$7,
80
4
$22
,851
$7,
053
$1,
86
9
$11
,36
7
$2,
60
0
$3,
221
$3,
370
57
81
48
84
64
81
88
101
91
104
117
113
124
145
134
139
$3,
06
8
Q3
$4,
180
Q4
$5,
224
Q1 Q2 Q3 Q4
110
177
163153
$8
,819
$7,
571
$4,
69
3
TOTAL:270 DEALS
$11.4B
TOTAL:334 DEALS
$42.2B
TOTAL:425 DEALS
$22.9B
TOTAL:542 DEALS
$13.8B
TOTAL:603 DEALS
$26.3B
$ Millions Invested
# Deals
2013 2014 2015 2016 2017
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 22
TOP DISCLOSED CANADIAN PE DEALS OVER $500M // 2017
COMPANY NAME PROVINCE FIRMS INVOLVED IN TRANSACTION SECTOR $ MIL.
DH CORPORATION (D+H) ONTARIO VISTA EQUITY PARTNERS BUSINESS PRODUCTS & SERVICES $4,800
GARDA WORLD SECURITY CORP. QUÉBEC APAX PARTNERS LLP, RHÔNE GROUP LLC OTHERS $2,200
OSISKO GOLD ROYALTIES LTD. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ MINING & RESOURCES $1,050
TEEKAY OFFSHORE PARTNERS L.P. BC BROOKFIELD ASSET MANAGEMENT INC., TEEKAY OFFSHORE PARTNERS L.P. OIL & GAS, POWER $938
CANAM GROUP INC. QUÉBEC AMERICAN INDUSTRIAL PARTNERS (AIP), CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ)
INDUSTRIAL & MANUFACTURING $890
ARCTIC GLACIER HOLDINGS INC. MANITOBA H.I.G. CAPITAL, LLC, THE CARLYLE GROUP CONSUMER & RETAIL $723
CQ ENERGY PARTNERSHIP ALBERTA CAN-CHINA GLOBAL RESOURCES FUND, MERCURIA ENERGY TRADING S.A., MIE HOLDINGS CORPORATION OIL & GAS, POWER $722
ALIMENTATION COUCHE-TARD INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CONSUMER & RETAIL $700
HUDSON’S BAY COMPANY ONTARIO RHÔNE GROUP LLC CONSUMER & RETAIL $638
OLD PSG WIND-DOWN LTD. BC ANTARAS CAPITAL, L.P., FAIRFAX FINANCIAL HOLDINGS LIMITED CONSUMER & RETAIL $575
LUNDIN GOLD INC. BC BLACKSTONE GROUP L.P., ORION RESOURCE PARTNERS (USA) LP MINING & RESOURCES $572
SANDVINE INC. ONTARIO FRANCISCO PARTNERS ICT $562
LOBLAW GAS STATION BUSINESS ONTARIO BROOKFIELD ASSET MANAGEMENT INC., BROOKFIELD BUSINESS PARTNERS LP CONSUMER & RETAIL $540
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 23
0
40
80
120
160
200
240
280
320
400
360
$0
$1,600
$3,200
$4,800
$6,400
$8,000
$9,600
$11,200
$12,800
$14,400
$16,000 $
631
2016201520142013 2016201520142013 2016201520142013 201520142013
$8
49
$9
02
$1,
291
$5,
015
$6
,09
3
$6
,321
$3,
212
$5,
86
1
$3,
106 $
4,79
7 $6
,60
1
$97
5
2016
$7,
630
2016201520142013 2016201520142013
$3,
405
$10
,910
$4,
782
$4,
034
$3,
250
$3,
300
$4,
80
0
201720172017201720172017
$14
,927
86
116
183
362
3155 56 49 24 27 31
141
10 7 114 3 7 3 3 2N/A2 1 0 1
$1,
403
$2,
80
4
$2,
788
$2,
197
$3,
246
$1,
520
363
6628
< $25M $25M-$100M $100M-$500M $1B-$2.5B$500M-$1B $2.5B+
PE ACTIVITY BY DEAL SIZE // 2017
TOTAL:1110 DEALS
$5.2B
TOTAL:257 DEALS
$12.4B
TOTAL:124 DEALS
$26.5B
TOTAL:18 DEALS
$26.4B
TOTAL:33 DEALS
$23.1B
TOTAL:4 DEALS$23.0B
$ Millions Invested
# Deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 24
TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES // 2017 #1 montréal
$6.7B 89 DEALS
4
2
9
5
31
6 7
10
8
Total Deals $ Millions
1. Montréal
2. Calgary
3. Montérégie
4. Toronto
5. Nord-du-Québec / Abitibi-Témis
6. Vancouver
7. Québec
8. Saguenay-Lac-St-Jean/Côte-Nord
9. Chaudière-Appalaches
10. Laval
89
54
53
44
33
33
28
18
15
15
$6,722
$3,053
$533
$5,400
$263
$2,883
$267
$59
$1,037
$941
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 25
117
98
78
57
54
43
39
37
33
15
14
13
5
# Deals $ Millions
Industrial & Manufacturing
ICT
Consumer & Retail
Agri-Forestry
Mining & Resources
Oil & Gas, Power
Business Products & Services
Automotive & Transportation
Life Sciences
Others
CleanTech
Financial
Real Estate
$1,603
$2,821
$4,355
$1,157
$2,928
$3,903
$5,535
$606
$388
$2,272
$437
$286
$16
PE SECTOR BREAKDOWN // 2017
industrial & manufacturing
most active sector
117 deals
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 26
PE EXITS* // 2013-2017 $ Millions Invested
# Deals
* INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES;
** IPO VALUATION
2016201520142013 2016201520142013 2016201520142013
$6
94
$2,
252
$1,
147
$30
6 $1,
245
$29
4
$9
30
$2,
161
$1,
672
201720172017
3
$11
,039
$11
,497 $
12,8
12
$7,
00
2
$2,
790
0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
5 61
6
52
48 50
59
134
10 10 74
$3,
408
8
IPO/RTO** M&A Secondary Buyout
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 27
TOP 10 DISCLOSED CANADIAN PE EXITS // 2017
SELLER COMPANY NAME BUYER $ MIL.
APAX PARTNERS LLC GARDA WORLD SECURITY CORP. RHONE CAPITAL $2,200
H.I.G. CAPITAL, LLC ARCTIC GLACIER HOLDINGS INC. CARLYLE PARTNERS LP $723
MILESTONE PARTNERS LLC PRECISION PARTNERS HOLDING CO. AK STEEL CORP. $457
BAIN CAPITAL CANADA GOOSE, INC. NA - IPO ON TSX & NYSE $445
EDGESTONE CAPITAL PARTNERS, BREGAL CAPITAL, PINE BROOK PARTNERS, SOROS STRATEGIC PARTNERS AURIGEN CAPITAL LIMITED PARTNERRE $375
CCMP CAPITAL ADVISORS LLC JAMIESON LABORATORIES LTD. NA - IPO ON TSX $300
CLAIRVEST GROUP INC. CRS CONTRACTORS RENTAL SUPPLY LIMITED PARTNERSHIP SUNBELT RENTALS OF CANADA INC $275
RIVERSTONE HOLDINGS AND NGP ENERGY CAPITAL MANAGEMENT NORTHERN BLIZZARD RESOURCES INC. WATEROUS ENERGY FUND (WEF) $244
ARC FINANCIAL CORP. UGR BLAIR CREEK LTD. PAINTED PONY PETROLEUM LTD. $224
OAKTREE CAPITAL GROUP LLC NEO PERFORMANCE MATERIALS NA - SALES OF SHARES ON TSX $200
Garda World Security Corp.
bought by RHONE CAPITAL $2,200m#1
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 28
133
118
33
33
29
20
14
14
10
# Deals $ Millions*
Fonds de solidarité FTQ
Capital Régional et Coopératif Desjardins (CRCD)
Caisse de dépôt et placement du Québec (CDPQ)
Fondaction CSN
Investissement Québec
PFM Capital Inc.
BDC Capital Inc.
First West Capital
XPND Capital
$4,193
$833
$4,306
$434
$877
$332
$193
$24
$30
MOST ACTIVE PE INVESTORS // 2017
* TOTAL DEAL VALUES – INCLUDES ALL PARTICIPATING INVESTORS
most active PE FIRM
133 DEALSFonds de solidarité FTQ
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 29
CVCA METHODOLOGY // VENTURE CAPITAL
VC DEVELOPMENT STAGES
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.
LATER STAGE PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE.
VC SECTORS
ICT COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES
LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES
CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES
AGRIBUSINESS TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES
Venture Capital Data:
Verified completed equity or quasi-equity venture capital deals only (non-equity or project-based government funding, pharmaceutical development deals, senior debt, venture capital-backed acquisitions, and angel financing are not included)
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 30
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
continued
PE SECTORS
AGRI-FORESTRY AGRICULTURE, FOODS AND FORESTRY
AUTOMOTIVE & TRANSPORTATION TRANSPORTATION, LOGISTICS AND RELATED SERVICES
BUSINESS PRODUCTS & SERVICES BUSINESS PRODUCTS AND SERVICES
CLEANTECH ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES
VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // 2017 | 31
CVCA METHODOLOGY // PRIVATE EQUITY continued
PE SECTORS
CONSUMER & RETAIL CONSUMER PRODUCTS AND SERVICES, BRICK AND MORTAR RETAIL
FINANCIAL FINANCIAL SERVICES
ICT COMPUTER HARDWARE/SOFTWARE & SERVICES, INTERNET SOFTWARE & SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE & TELECOM AND SERVICES
INDUSTRIAL & MANUFACTURING EQUIPMENT AND MATERIAL MANUFACTURING
LIFE SCIENCES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED 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 // 2017 | 32
CVCA ABOUT & CONTACT
AuthorsDarrell 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 between these, he also started his own successful management consulting company. 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. Darrell is currently on the board of a non-profit social housing in Peel, a member of Volunteer Toronto as well as an active volunteer with Woodgreen Community Services. He holds a BA in Philosophy/History from the University of Western Ontario and an MBA from the Rotman School of Management.
[email protected] | 416-487-0519 ext. 208
Carolyn oversees all of the CVCA’s communications and marketing efforts, which includes managing the Association’s brand, coordinating media outreach programs, and managing the development of all online content and social media engagements. Carolyn also brings with her a background in journalism, and is keen on positioning the CVCA as the industry thought leader for all things private capital through informative and engaging content. Carolyn has a BA in Popular Culture and Communications from Brock University, a diploma in Journalism from Niagara College Canada, and an interdisciplinary Master of Arts degree in Communication Studies from Brock University.
[email protected] | 416-487-0519 ext. 204
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 basis. David holds a BA in Philosophy and Psy-chology from the University of Toronto.
[email protected] | 416-487-0519 ext. 202
DARRELL PINTOResearch Director
DAVID KORNACKIResearch Analyst
CAROLYN GOARDSenior Manager, Communications
About CVCAThe Canadian Venture Capital and Private Equity Association is the voice of Canada’s venture capital and private equity industry. We are focused on improving the private capital ecosystem by broadening indus-try awareness and providing market research, networking, and professional development opportunities.
We also advocate on behalf of the industry to ensure sound public policy that encourages a favourable investment environment. The CVCA works alongside its members, who represent the vast majority of pri-vate capital firms in Canada, to improve the industry and drive innovation and growth.
For more information, visit cvca.ca
@CVCACanada /CVCACanada
CVCA - Canadian Venture Capital and Private Equity Association
372 Bay St., Suite 1201 Toronto, ON M5H 2W9
To obtain estimates for additional custom InfoBase data reports please contact [email protected]