Canadian venture capital firms raised US$824.4M in the first quarter of 2022 and Canadian companies saw a total of $3.5B in VC investment, a jump from the previous two quarters, according to KPMG Private Enterprise Q1 Venture Pulse report, which analyses key VC deals and trends globally in jurisdictions around the world.

There were 213 VC deals in the first three months of the year in Canada, the lowest quarterly deal count over the past year. However, the value of deals in Q1 was higher than last year.

A similar trend played out in corporate venture capital activity as well, where there were fewer deals with higher price tags. From January to March, there were 41 CVC deals worth $966M, down significantly from the previous three quarters (in terms of deal volume and value). While the number of deals was also lower than the 68 deals in Q1'21, the value of deals was still higher than last year, suggesting investors are still willing to pay for quality Canadian startups.

By sector, technology still reigns supreme. Half of all deals (105) in the quarter were in the tech sector, with 30 deals in artificial intelligence and machine learning, 28 in fintech and 17 in crypto assets and blockchain.

Healthcare was the second biggest sector for investment, with 34 deals in total, more than one third of which were in healthcare technology.

Broken down by deal type, there were 75 seed round deals, 51 early stage investments, 73 late stage and 14 angel investments.

Initial public offerings dropped significantly, with only two in the quarter. Two additional listings were the result of reverse mergers. Of the 27 exits in the quarter, 16 were mergers or acquisitions and five were private equity buyouts.

Globally, there were 9,349 deals worth US$144.8B in the quarter, a significant drop over the previous record-breaking year, but a strong quarter for investment nonetheless. The war in Ukraine, rising inflation and interest rates, volatility in global capital markets, ongoing supply chain challenges and the continuation of the COVID-19 pandemic likely contributed to a slowdown in deal-making activity as VC investors because more cautious and focused on due diligence.

Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today

Connect with us