$900 million of venture capital dollars were invested across 144 deals in the third quarter of 2022, bringing the year-to-date total above $7 billion invested across more than 500 deals as investment “continues to normalize to pre-pandemic levels,” according to the latest quarterly report from the Canadian Venture Capital and Private Equity Association.
“Canada’s VC activity is mirroring global trends, particularly that of the United States, in both deal count and in a similar drop in investment size, as investors continue to monitor market conditions and founders hold off on fundraising,” believes Kim Furlong, Chief Executive Officer of CVCA.
Furlong says one positive trend of Q3 was “an uninterrupted growth at the seed stage.”
Investment into early and seed-stage companies demonstrate the most resilience this quarter, comprising 45% and 43% of all transactions respectively. There was $152M invested at the seed stage across 62 deals, bringing the YTD total to $630M—nearly double 2020 levels.
“Investors are gravitating toward smaller deals and add-ons given challenging macroeconomic pressures,” suggests Furlong. “Investors are taking a cautious approach, prioritizing deals that require less valuation adjustments amid market conditions.”
British Columbia is a top-three province for investment this year, attracting $900 million in capital across nearly 80 deals, according to the report.
BC-based companies received 13% of all investment in Q3, behind Ontario (48%) and Quebec (28%).
The top sector for investment in BC was information and communications technology, which attracted three dozen deals. Life Sciences drew nine deals in Q3.
Big rounds in Q3 in BC included Ideon Technologies securing $21 million to transform the critical minerals supply chain feeding the clean energy transition and direct-to-consumer tableware brand Fable securing a $8.4 million Series A round to elevate the at-home experience.