Technology Deals, Dollars on Rise in Canada

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Investment in venture capital-backed companies based in Canada closed the year with a strong finish, as deals and dollars rose in the final quarter, according to the MoneyTree Report from PwC Canada and CB Insights.

The number of deals increased to 7% to 266 in 2016. Total dollars invested equalled $1.7B USD in 2016, matching last year’s figure. Both trends contrast significantly with the global picture, where deals declined 10% and total funding dropped 23% from the heady highs of full-year 2015.

In Q4 2016, investors deployed $527 million to Canadian VC-backed startup companies, spiking 49% from the previous quarter. During the year, quarterly financing topped $500 million twice and each quarter during the year saw at least 50 deals completed.

“Standout annual and quarterly funding trends underscore the strength of the Canadian tech sector. Canada continues to attract significant global attention due to its impressive innovation initiatives and ambitious entrepreneurs.” said Chris Dulny, National Technology Sector Leader, PwC Canada.

Activity was strong in both leading Canadian hubs of Toronto and Montreal, which saw total dollars invested rising 10% and 8% in full-year 2016, respectively. Vancouver saw healthy deal activity, with 2016 deals rising 17%.

“Canada’s solid year is especially notable given the context,” stated Anand Sanwal, CEO of CB Insights. “Whereas many other regions globally have seen a reset after the record financing we saw in 2015, the Canadian funding environment’s momentum continued to be strong. 2017 should be a good year given the growth in Canada’s home-grown investor ecosystem as well as the interest in the market from US and European investors.”

60% of investors participating in seed-stage deals to companies in Canada were themselves Canadian, and 57% of investors to Canadian early-stage companies were Canada-based.

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