Québec's venture capital results for Q3 2011 - Québec takes first place!

MONTREAL, Nov. 15, 2011 /CNW Telbec/ - Réseau Capital today published statistics on venture capital activity in Québec for the third quarter (Q3) of 2011, as compiled by Thomson Reuters.

Québec's venture capital (VC) deal making increased substantially in the third quarter of 2011, with $145 million invested in this period, up 81% from the $80 million invested at the same time last year.  Québec companies financed with VC totalled 79, for a 52% increase. As a result, disbursements amounted to $421 million at the end of September, surpassing the $370 million invested during the whole of 2010.

Québec-based activity tended to outpace activity elsewhere in the North American market in the third quarter. Across Canada, levels of activity rose 51% year over year, with $388 million invested in total. In the same period, VC market activity in the United States, totalling US$7.2 billion, was up 35%. In addition, Québec led Canadian market trends in Q3, accounting for 37% of all disbursements, compared with Ontario's 27%. For most of the Québec companies that received funding in the third quarter, it was their first VC transaction.

According to Geneviève Morin, Co-president of Réseau Capital, "Québec continues to stand out. The strong third-quarter activity has increased Québec's lead over the rest of Canada and confirmed the relevance of efforts to cover the entire investment chain, with complementary activity by different types of fund, including private-independent funds, retail funds and foreign funds."

BREAKDOWN BY INVESTOR TYPE

This time, private-independent VC funds were in the forefront of Québec-based activity, at least in dollar terms. Private funds invested $44 million in 29 companies in Q3 2011, or more than four times the $10 million they invested the year before. Private fund activity reflected 31% of total VC activity, well up from its historical average share of 12%.

Labour-sponsored and other retail funds continued to play a vital role in Québec activity, deploying $23 million to 31 companies in third quarter, or 16% of total VC invested. Relative to the recent past, U.S. funds and other foreign investors were somewhat less of a presence in the Québec market, contributing $20 million, or 14% of total dollar flows.

FUND RAISING

In the first nine months, new capital commitments to Canadian VC funds totalled $739 million, just shy of the $741 million committed the year before. Québec-based funds continued to net the largest share of new resources, with 42% of the year-to-date total.

According to Geneviève Morin, Co-president of Réseau Capital, "The fund-raising turnaround that took place in the third quarter is encouraging. After the low point we reached in 2010, it is essential that the mobilization of capital accelerate so that innovative companies can access the funds they need to grow, at all stages and in all sectors." 

ACTIVITY BY SECTOR

All technology sectors contributed to the increase in funding. Out in front was activity in the information technology sectors: 28 IT companies attracted $57 million, or 40% of all disbursements, and received 43% more than the $40 million invested in Q3 2010.

Life sciences activity in Québec also increased, with $23 million invested, a considerable improvement over the $5 million invested in Q3 2010.

ACTIVITY BY STAGE

VC activity in Québec continued to be propelled by late-stage company financings, which accounted for 78% of total dollars invested in the third quarter. As in past quarters, this trend relied primarily on firms in expansion mode, 49 of which secured $108 million.

During the same period, seed-stage financings experienced only moderate growth, with 10 firms garnering $2 million.

About Réseau Capital

Réseau Capital, the Québec Venture Capital Association, was founded in 1989. Its members represent public and private venture capital companies, as well as private equity firms, banks, angel investors and firms of professionals working in the industry. Its mission is to contribute to the development and smooth operation of the investment chain, and its preferred approaches are training, information, networking, advocacy and representation.

SOURCE Réseau Capital

For further information:

Source: Réseau capital   For information:
Geneviève Morin
Co-president of Réseau capital
Chief Financial and Corporate
Development Officer
Fondaction CSN
  Robert Pierre Venne
Media Relations for Réseau capital
Direct line: (514) 993-6260
rpv@sympatico.ca
Shahir Guindi
Co-president of Réseau capital
Managing Partner
Osler, Hoskin & Harcourt LLP
 

 

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