2020 Year End VC & PE Québec Market Overview: VC Investment Drops 33% YoY; Québec Captures Almost Half of all PE investment in Canada

Réseau Capital and the Canadian Venture Capital and Private Equity Association (CVCA) today released the market overview report of the Québec venture capital (VC) and private equity (PE) market for 2020.

Just over $1B of VC was invested over 131 deals in Québec in 2020, which is 33% less than 2019 (CAD $1.6B), and 16% less than the trailing five-year average across 2015-2019 (CAD $1.2B).

There were 15 VC-backed exits in Québec in 2020. The most notable exit was Saint Laurent-Based Repare Therapeutics which debuted on the NASDAQ in Q2 for a total value of CAD $1.5B. Previous investors in Repare were Fonds de solidarité FTQ and Versant Ventures, among others.

Venture Debt continues to grow in 2020 (CAD $80M across 20 deals in 2020, vs CAD $54M across 43 deals in 2019), but at a slower pace than in Ontario.

In PE, CAD $6.9B was invested over 386 deals in Québec in 2020, which was 29% lower than the amount invested in 2019 (but 16% higher for the number of deals in 2019, CAD $9.7B over 332 deals), but only 6% lower than the five-year average across 2015-2019 in dollars invested (CAD $7.3B). The province also captured the most PE investment compared to other Canadian provinces with 49% of all PE dollars invested in Quebec.

The most notable PE-backed exit in Québec in 2020 was Nuvei’s IPO on the TSX for a total market capitalization of CAD $4.6B, backed by Novacap Management, Fonds de solidarité FTQ, and Caisse de dépôt et placement du Québec.

Venture Capital Highlights :

• the average deal size in Québec in 2020 was only CAD $7.7M; the lowest YTD average deal size since 2016 (CAD $5.9M).

• VC dollars invested by Sector:
  • Information, Communication & Technology: 46% (CAD $459M over 61 deals)
  • Life Sciences: 33% (CAD $329M over 30 deals)
  • Cleantech: 5% (CAD $50M over 13 deals)

• By Stage
  • Late stage: 48% (CAD $486M over 21 deals)
  • Early stage: 42% ($418M over 61 deals)
  • Seed stage: 7% ($67M over 41 deals)

• VC Activity by Geography:
  • Ontario : 43 % of all VC dollars invested in Canada (CAD $1,9B across 212 deals)
  • Québec : 23 % (CAD $1B across 131 deals)
  • B-C : 20 % (CAD $893M across 69 deals)

Private Equity Highlights :

• PE dollars invested by Sector
  • Consumer & Retail: 21% (CAD $1.4B across 37 deals)
  • Industrial & Manufacturing: 19% (CAD $1.3B across 96 deals)
  • Energy: 13% (CAD $915M across 5 deals)
• PE activity by geography:
  • Québec : 49 % of all PE dollars invested (CAD $6,9B across 386 deals)
  • New-Brunswick : 19 % (CAD $2,7B across 7 deals)
  • Alberta : 16 % (CAD $2,3B across 38 deals)
  • Ontario : 11% (CAD $1,6B across 123 deals)

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