After a comparatively slow first half, venture capital (VC) market activity in Canada made gains in 2011’s third quarter.
According to a report by Canada’s Venture Capital & Private Equity Association (CVCA) and research partner Thomson Reuters, Canadian VC investments totalled $388 million between July and September, up 51% from the same time in 2010.
As a result of third quarter activity, Canadian VC deal-making reflected more considerable year-to-date expansion.
Dollar flows totalled $1.1 billion at the end of September, up 30% from the $882 million invested during 2011’s first nine months.
Gregory Smith, president of the CVCA, said, “It is gratifying that the year-over-year growth in dollars invested has been spread across entrepreneurial firms in key innovative sectors – communications and information technology, life sciences and clean technology.”
The report found most Canadian technology sectors benefited from higher VC activity in the third quarter.
IT-related activity continued to lead, with $177 million invested, up 31% from the year before; life sciences sectors secured $106 million, up 83%.
Taking in $43 million invested between July and September, clean-tech investment also increased from the same time last year.
However, Smith also expressed some caution about interpreting these upward trends.
“As positive as these developments are, venture capital investment in Canada still has quite a distance to go to approximate market conditions south of the border,” he said.
“Even with the growth in disbursements in the most recent quarter, Canadian innovative firms receive only 40% of the dollars going to their competitors in the United States.”
Jennifer Harrison
@JHarrisonBIV