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2017 VC & PE Québec Market Overview

March 2018

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2017 VC & PE Québec Market Overview: VC Mega Deals Drive VC Investment Year-over-Year spike; PE Investment Doubles In Q4
Quebec captures 30% of all Canadian VC deals in 2017; Leads the country in private equity investment

March 6, 2018Montréal, QC – Québec venture capital continued its impressive trajectory in 2017 capturing 30% of the total number of Canadian VC deals (180 out of 592) and 37% of dollar invested ($1.3B out of $3.5B). Québec private equity captured 55% of all PE deals (330 out of 603) with $10.7B invested in Québec-based companies in 2017.

Six $50M+ mega deals totaling $691M accounted for 52% of total VC dollars invested in Québec. Three of the $100M+ deals included the $207M Series D in Montréal-based Lightspeed POS Incorporated from a syndicate including Caisse de dépôt et placement du Québec (CDPQ), Investissement Québec, iNovia Capital and Teralys Capital; the $141M in Montréal-based Element AI with participation from Real Ventures; and, the $128M Series C in Québec City-based LeddarTech with help from Fonds de solidarité FTQ.

Information communications technology companies received $860M, a 65% share of total VC dollars invested in the province; up 19% since 2016. Life science companies received $326M, a 25% share of VC investment. Agribusiness continued its upward trajectory in Québec with $70M invested over 14 deals; a steady increase from 2013 when only $7M was invested over 5 deals.

“Venture capital continues to indicate a high level of trust in the Québec economy,” says Réseau Capital CEO, Jack Chadirdjian. “2017 year-end data confirms investors are attracted to Québec companies.”

Two $1B+ mega-deals amounted to $3.3B or 31% of total PE dollars invested in the province. This included a private placement in Osisko Gold Royalties Limited by Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ.

 Industrial and manufacturing companies received the largest share of PE investment in Québec at 26% of all deals, while consumer and retail companies received 15%.

 “Québec private equity investment continues to lead the country,” says Chadirdjian. “The private capital data proves the province continues to be a great place to invest.”

 

Quebec Venture Capital Highlights

Q4 2017 Highlights

  • $218M was invested over 51 deals in Q4 in Québec, 7% more than the amount invested in the same quarter last year ($203M).
  • The average deal size dropped to $4.3M down 31% from the same quarter last year.

2017 Highlights

6 $50M+ mega-deals totaling $691M accounted for 52% of total dollars invested. This included 3 $100M+ deals:

Montréal-based Lightspeed POS Inc. raised a record $207M Series D round from a syndicate including Caisse de dépôt et placement du Québec (CDPQ), Investissement Québec, iNovia Capital Inc. and Teralys Capital.
Real Ventures participated in Montréal-based Element AI’s $141M Series A round
Québec-based LeddarTech closed its $128M series C round from Fonds de solidarité FTQ.

  • Québec captured 30% of the total number of Canadian VC deals (180 out of 592) and 37% of dollars invested ($1.3B out of $3.5B).
  • 38% of VC activity in the province was in deal sizes between $1M-$5M, followed by deals between $100K-$500K capturing a 22% share and deals between $5-$20M a 12% share.
  • ICT companies received $860M, a 65% share of total dollars, up 19% from its 2016 share
  • Life sciences companies received $326M or 25% of total dollars, down 7% from its 2016 share
  • Although a much smaller industry segment, VC investment in agribusiness companies continued its upward trajectory with $70M invested over 14 deals. This has been steadily rising from 2013 when only $7M was invested over 5 deals.
  • 73% of all VC deals in the province were in Montreal-based companies.
  • Notable exits included the $392M Airbnb acquisition of Montreal-based Luxury Retreats, the $174M IPO of Montreal-based Clementia Pharmaceuticals Inc. and the $133M acquisition of Accedian Networks by Bridge Growth Partners.

 

Quebec Private Equity Highlights

Q4 2017 Highlights

  • $2.1B was invested in Q4, more than double the $1B from the same quarter last year.
  • The average deal size was $24.8M in Q4, up 98% from the $12.5M in Q4 2016.

2017 Highlights

  • Québec captured 55% of all Canadian PE deals (330 out of 603), three times greater than Ontario’s 18% share and five times greater than Alberta’s 11% share. There was $10.7B invested in Quebec-based companies in 2017, compared to $8.6B in Ontario-based companies and $3.1B in Alberta-based companies.
  • 30% of all deals were between $1M-$5M, with deals between $5M-$25M capturing a 21% share of the province’s deal activity.
  • Industrial and manufacturing companies received the largest share of PE deals (26%) with consumer and retail companies receiving 15%.
  • 2 $1B+ mega-deals amounted to $3.3B or 31% of total dollars invested. This included a private placement in Osisko Gold Royalties Ltd. by Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ.
  • There were 101 exits involving Québec-based companies.

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