2021 venture capital and private equity Quebec market overview

March 2022

The results for 2021 confirm a return to significant levels of investment although vigilance is required


Réseau Capital and its Private Capital Centre of Expertise present the quarterly report on private capital industry activity in Québec. Produced in collaboration with the Canadian Venture Capital Association (CVCA), this report provides a detailed view of venture capital (VC) and private equity (PE) investments in Quebec for the year 2021. It presents a review of private investment activity in Québec companies by type of investment, sector of activity, stage and size of investment.

The consolidated data for the year 2021 confirms the trend of the previous quarters of a return to the significant investment levels that were achieved in 2017 and 2019, both in terms of number of transactions and capital invested. These investments directly contributed to the economic recovery through deals of more than $12 billion in Québec companies. These investments include $9 billion in private equity, in line with the levels of 2017 and 2019, and nearly $3 billion in venture capital with a tremendous growth, breaking a record and reaching 24% of total investments in 2021 (compared to an average of 14% of the past few years). These good results come from both a rebound from less sustained investments in 2020, and the continued growth of investment capital observed in recent years in the financing of our companies.

While this is good news in the short term for Québec companies and the economy, this result should not mask a more complex reality and the major concerns of our industry with respect to financing cycles. Economic and geopolitical uncertainty, high inflation, and the uncertain outlook for the markets call for caution. The last quarter of 2021, with a downturn in venture capital, is already showing signs of this slowdown and concerns about refinancing needs. In a context where the return to the market for funds could prove complex, impacts on corporate financing for 2022 and beyond are possible.

“It will be important to remain vigilant in the coming months and to put in place, with the help of the partners in this ecosystem, the necessary measures that will allow private capital to continue to play its full role in the creation of wealth in Québec,” explained Guillaume Caudron, CEO of Réseau Capital.

Maintaining the momentum from the beginning of the year, venture capital continued to grow, despite a clear slowdown in the fourth quarter. In terms of both amounts invested and number of transactions, 2021 is a record year for venture capital in Quebec. A total of $2.8 billion has been invested in 189 transactions, which represents almost three times the total investment in 2020 and twice the amount invested in 2019. Quebec’s performance in 2021 is supported by several large deals, such as investments in Blockstream ($265M), Alayacare ($225M), Hopper ($215M), Payfacto ($150M), QScale ($145M) and Ventus Therapeutics ($126M).

In terms of private equity, Québec maintains its leading position in Canada for 2021. We recorded investments of $9.3G and 481 transactions. Although the volume of transactions in the fourth quarter is a record, the amounts invested are lower than in the previous two quarters, while remaining high on a historical basis. Quebec remains the most active province with more than half of the amounts invested in development capital, and nearly two-thirds of the transactions in Canada. PE activity in Québec is mainly concentrated on debt and minority equity deals (growth and follow-on), and less on buyouts and add-ons, although several large transactions have supported this type of investment in 2021. Traditionally, the industrial and manufacturing sector remains the leader in terms of number of transactions, but other sectors such as retail and ICT stand out in terms of amounts invested.

VC Highlights

  • With 189 transactions totalling $2.8 billion, venture capital activity will reach record levels in 2021, both in terms of number of transactions and amounts invested.
  • For the year as a whole, the ICT sector performed very well, with $1.8 billion invested in 107 deals. The life sciences sector also had a record year with $570 million in capital invested in 39 transactions.
  • Nearly half of the year-to-date investment amounts were in post-seed (24 deals for $1.3G), although the fourth quarter (7 deals for $50M investments) was particularly weak. The seed (97 deals for $220M) and early stage (556 deals for $1B) phases are not left behind, setting historical records for amounts invested.
  • During the year, there were 21 venture capital exits. In the fourth quarter, there were 6 new exits, including the high-profile exit of COVEO in an IPO, in addition to those of previous quarters, including the acquisition of Flinks by National Bank, the listing of Dialogue on the TSX in the first quarter and the acquisition of Moka Financial Technologies by Mogo.

PE Highlights

  • In 2021, 481 transactions representing investments of $9.3G across Quebec were completed. Although the volume of transactions in the fourth quarter is high, the amounts invested are lower than in the previous two quarters, while remaining high on a historical basis.
  • Québec accounts for 60% of Canadian private equity transactions, ahead of Ontario (23%) and British Columbia (6%), which represent 51% of the amounts invested. Quebec differs from Ontario in that its private equity activity is heavily concentrated in growth and follow-on transactions, with less activity in buyouts and add-ons (which represent only 7% of transactions in Quebec compared to 51% in Ontario.
  • The industrial and manufacturing sector continues to attract a significant number of deals (113 deals for a total of $1.6B), but sectors such as ICT (79 deals for $2.5B), retail (61 deals for $1.7B) and agroforestry (52 deals for $1.1M) are still experiencing strong growth.


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