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Québec sets new high-water marks for venture capital activity in 2016

February 2017

The VC market in Québec is on fire. Just over a billion dollars in venture capital was invested in the province in 2016, including $250M dollars in Q4 alone, according to the 2016 VC & PE Québec Market Overview, jointly released today by Réseau Capital and the Canadian Venture Capital and Private Equity Association (CVCA).

In 2016, Québec was home to nearly one third (32 per cent) of Canada’s 530 venture capital transactions. Later-stage companies received the largest share of the province’s VC investments (57 per cent), while startups and early-stage growth companies captured 43 per cent of VC dollars. Montreal-based companies received a total of $835M over 119 investments, second only to Toronto.

“Venture capital is a good indicator of the level of trust in the economy,” says Réseau Capital CEO, Jack Chadirdjian. “The data from 2016 clearly shows that investors are interested in Québec companies.”

Over half of Québec investments ($501M across 90 deals) were disbursed to companies in the information and communications technology (ICT) sector. ICT was followed by life sciences, recording 38 investments totaling $313M.

On the private equity side, $3.8B was invested in buyouts and development capital (344 transactions). This represents 28 per cent of the year’s Canadian development capital. Nearly a third of the province’s investments, or $1.1B, went to clean technology companies. The major acquisition of Services Matrec Inc. for $800M was the largest deal in this sector.

Twelve mega deals exceeding $50M – totalling $2.3B – accounted for 61 per cent of all development capital investment in Quebec in 2016.

The largest exits include the sale of CGI Group Inc. shares, held by the Caisse de dépôt et placement du Québec, for $400M, and the sale of Fibre Noire Internet Inc. to Quebecor by Novacap Investments Inc. for $125M.

“Data for 2016 confirms Québec is home to some of Canada’s most innovative technology companies, and investors are clearly taking note,” concludes Chadirdjian. “This is a particularly exciting time for Québec’s private capital ecosystem.”

 


Québec Venture Capital Highlights:

  • Soaring to $1B, 2016 VC investment in Québec reached its highest level since CVCA started collecting data in 2013.
  • Québec captured a 31 per cent share (164) of all Canadian VC deals (530) and was a close second to Ontario.
  • There were five $50M+ deals totaling $429M, with the DalCor Pharmaceuticals $128M series B round in the top spot.
  • Half the $1B went to ICT (over 90 deals), followed by $313M in life sciences (over 38 deals), and $67M in agribusiness (over 12 deals).

Québec Private Equity Highlights:

  • $3.8B was invested in over 344 Québec deals in 2016, a 28 per cent share of all Canadian PE dollars.
  • Twelve $50M+ mega deals accounted $2.3B or 61 per cent of Québec’s 2016 total, including the $800M acquisition of Services Matrec Inc.
  • $1B, representing almost a third of all dollars invested, went to clean tech companies.
  • The largest exit in the province was the $400M sale of CGI Group Inc., followed by the $125M sale of Fibre Noire Internet Inc. to Quebecor Inc.