Q3 2020 VC & PE Québec Market Overview
Québec VC Investment Drops Over 65% YoY and QoQ; PE Investment Plunges Almost 70% lower YoY. Quebec remains the Canadian leader in PE
Réseau Capital and the Canadian Venture Capital and Private Equity Association (CVCA) today released the market overview report of the Quebec venture capital and private equity market for Q3 2020.
CAD $173M venture capital was invested over 31 deals in the third quarter of 2020, which is almost 3x lower than the third quarter of last year (CAD $516M), and Q2 of this year (CAD $514M).
As a result of the decrease in activity in Q3 2020, the average deal size in Q3 2020 was only CAD $5.6M, bringing down the YTD average deal size to CAD $6.8M; the lowest YTD average deal size since 2016 (CAD $5.9M).
CAD $483M of private equity was invested over 91 deals in the third quarter of 2020, 69% lower than the amount in the same quarter from last year (CAD $1.6B over 111 deals). Despite the slow third quarter of 2020, the YTD activity is still on track to exceed the four-year average across 2015-2019 in both dollars invested and deals (CAD $7.4B across 309 deals).
The most notable exit in Q3 was Nuvei’s IPO on the TSX for a total market cap of $4.6B, backed by Novacap Management, Fonds de solidarité FTQ, and Caisse de dépôt et placement du Québec.
Québec Venture Capital Highlights
– There were 13 VC exits in YTD Q3 2020
– Deal size in Q3:
<$5M: 18 deals, YTD 79 deals with $102M
$5-$20M: 4 deals, YTD 25 deals with $228M
$20-$50M: 3 deals, YTD 4 deals with $148M
– VC activity by province :
Ontario: 44% of all VC dollars in Canada ($1.5B across 168 deals)
Quebec: 23% ($796M across 117 deals)
BC: 22% ($758M across 53 deals)
– VC dollars invested by Sector:
Information, Communication & Technology: 44% ($348M over 49 deals)
Life Sciences: 34% ($270M over 26 deals)
– By Stage
Late stage: 50% ($400M over 17 deals, $23.5M in average deal size)
Early stage: 40% ($316M over 46 deals, $6.7M in average deal size)
Seed stage: 9% ($72M over 52 deals, $1.4M in average deal size)
Québec Private Equity Highlights
– Deal size in Q3:
<$25M: 20 deals, YTD 194 deals at $737M
$25M-$100M: 2 deals, YTD 22 deals at $1.2B
$100M+: 0 deals, YDT 5 deals at $3B
– PE activity by province:
Quebec: 43% of all dollars invested in Canada ($4.9B across 261 deals)
New Brunswick: 23% ($2.7B across 6 deals)
Alberta: 19% ($2.2B across 28 deals)
Ontario : 12% (1,4 B across 91 deals)
– Dollars invested by Sector
Information, Communications & Technology: 23% ($1.2B across 63 deals)
Consumer & Retail: 20% ($994M across 20 deals)
Energy: 18% ($896M across 4 deals)