Activity in the Québec venture capital industry in 2012 - Highest level of fundraising since 2002 and 15% rise in investments in the fourth quarter
MONTREAL, Feb. 19, 2013 /CNW Telbec/ - Activity in venture capital (VC) fundraising in Québec reached a 10-year peak in 2012 at $924 million, representing to 52% of the activity in the entire Canadian market. Moreover, a new trend appears to be emerging: the great majority of companies financed last year - 58% of the total - were involved in VC transactions for the first time, drawing in $214 million, or more than half the dollars invested. These observations are contained in the annual report on activity in the investment capital industry, compiled by Thomson Reuters and issued today by Réseau Capital.
"New funds committed to partnerships and to other funds literally exploded in the past year," notes Jack Chadirdjian, President and Chief Executive Officer of Réseau Capital. "This is excellent news for companies seeking this type of financing. With support from the federal government and its action plan aimed at new investments in venture capital funds, this record injection of funds raised by the private sector will further vitalize our industry."
Across Canada, VC funds raised in 2012 amounted to $1.8 billion, up 73% from the $1.0 billion committed in 2011 and more than in any year since 2002, when commitments totalled $2.5 billion. In Québec, VC fundraising activity totalled $924 million in 2012, a 67% increase from the $552 million committed in 2011 and more than in any year since 2001, when the VC funds raised came to $1.5 billion, representing 39% of the Canadian market as a whole.
VC investments recover in the fourth quarter
The initial decline in VC investments seen in 2012 occurred in the first half of the year, but activity in Québec rose 7% between July and December and intensified further in the fourth quarter, rising 15%. Some $409 million was invested in 2012, with $142 million of this in the fourth quarter. Several major transactions contributed to this increase, in particular Montréal-based MethylGene Inc. ($26.1 million), Québec City-based Coveo Solutions Inc. ($18 million) and Montréal-based Vantrix Corp. ($13.3 million).
Québec attracted 28% of all VC funds invested in Canada last year, down from its 32% share in 2011. But in line with the trend toward intensification of investment as the year advanced, Québec's market share rose to 37% between July and December.
New recruits and seed-startup companies in the lead
Québec companies seeking VC financing for the first time were dominant targets in the market in 2012, drawing in $214 million, more than half the total dollars invested during the year. New investments also increased 43% compared to the previous year.
Transactions at the seed and startup stages also made a strong comeback in Québec in 2012. They saw a 24% improvement in total VC invested, with $97 million invested in 45 seed-startup companies, more than double the $47 million dollars that were drawn in during the previous year.
Non-technology sectors dominate and life sciences surge
With a 60% jump over 2011, non-technology sectors gained ground with $151 million in investments (37% of the total). Information technology sectors ranked second, at $124 million, while life sciences saw a sudden surge in the second half, bringing in $114 million for the year. However, activity in clean technologies was disappointing, with $19 million (5% of total investment).
About Réseau Capital
Réseau Capital, founded in 1989, is the only private-equity association that brings together all stakeholders involved in the Québec investment chain. The mission of Réseau Capital is to contribute to the development and efficient operation of the private-equity industry, which plays a major role in the development and financing of businesses in Québec. Réseau Capital has more than 425 members representing private-equity, tax-advantaged and public investment companies, as well as banks and insurance companies, accounting and law firms, angel investors, and many professionals working in the field.
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