Q1 2024: Majority of $1.38B VC Investments from US and International Sources
Canadian venture capital (VC) reached $1.38 billion* in Q1 2024, showing minimal change from Q4 2023 and Q1 2023.
The investment landscape for Q1 2024 can be summarized by three key sectors: PIPE (Private Investment in Public Equity), Biotech, and US Mutual/Hedge Fund.
PIPE Dominates Five PIPE financings contributed $480 million, representing approximately 35% of the total investment.
Early-Stage Investments Lead Early-stage financings continued to dominate, raising $603 million or 44% of the total.
Biotech Surpasses IT Biotech saw a significant increase driven by two large PIPE deals, securing $622 million, outpacing IT investments of $310 million, financial companies at $197 million, and cleantech at $162 million.
US Mutual/Hedge Fund Takes Lead US mutual funds and hedge funds invested $437.84 million primarily in biotech PIPE financings, replacing traditional US VC investments.
Top Investor Types
US Mutual/Hedge Fund: $438 million
US Private VC: $228 million
CDN Government: $112 million
CDN Private VC: $97 million
US Corporate VC: $93 million
International Private VC: $85 million
US Private Investors: $58 million
CDN Family Offices: $57 million
CDN Private Investors: $39 million
CDN Corporate VC: $35 million
Together, these top 10 investor types accounted for 90% of the total investments in Q1 2024.
Other Highlights of Q1 2024
Provincial Breakdown Companies from Ontario led with $733 million, followed by Quebec with $346 million, BC with $212 million, Alberta with $81 million, and New Brunswick with $11 million.
Company Size Companies with 0-49 employees raised $1,193 million, making up 86% of the total. Companies with 50-99 employees raised $33 million, while those with 100-499 employees raised $157 million. No funding was raised by companies with 500+ employees.
VC Fundraising VC fundraising rebounded with 17 funds raising $745 million in Q1 2024, with 11 private VC funds leading with $693 million raised.
"In Q1 2024, 74% of VC investments originated from international sources, predominantly from the US. This marks a historically low domestic contribution to Canadian VC, signaling potential structural weaknesses in the industry. The April 16 federal Budget, allocating a mere $200 million to the industry, did not address this concern. Additionally, while $1.38 billion was invested, Canadian VC funds raised only $745 million, meeting just half of the demand for VC capital in the quarter. On a positive note, biotech investments, largely fueled by US and international funds, reached a record high compared to other sectors such as IT and fintech."
*All dollar ($) figures in Canadian dollars unless otherwise specified.