continuing our global As we turn to Canada today, look at the fast pace of venture capital investment in the second quarter. While many markets have posted impressive results, such as the United States setting the pace for new all-time records in dollars invested in startups, Canada’s numbers stand out.
The country, now famous in the startup world for giving birth to Shopify, has already broken the annual record for venture investment in 2021. Actually, CB Insights data indicates That Canadian startups have more than doubled their 2020 totals this year.
The same data set indicates that Canada’s venture capital results now rival those of the entire Latin American region, with exits and megadeals coming nearly equal in the second quarter, and the same number of total venture capital rounds in the period.
It caught our attention.
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The exchange reached out to a number of venture capitalists to expand our perspective on the Canadian market beyond data points. Matt Cohen, a Toronto-based investor Ripple Ventures, told The Exchange that “Canada is in an enterprise explosion today”, the results of which are “unprecedented” for the country.
Taking the data and investor notes as a whole, Canada’s startup industry appears to be benefiting from both domestic and international trends, a broad genre focus, and more than one hub. Let’s talk about it.
a venture capital setback
In the first half of 2021, Canadian startups raised $6.3 billion in 414 deals, according to CB Insights data. Both numbers compare favorably to Canada’s 2020 results, when 617 deals contributed $2.9 billion to the total capital raised by Canadian startups. Canada has already bested its previous record in venture dollars invested ($4.3 billion, 2019), and is on pace to beat its all-time deal count (720, 2018) as well.
On their own, the second quarter outsize results are even more extreme than its H1 2021 results, which you might surprisingly expect. Look at the following chart from the same data set:
Canadian startups had the best quarter ever in terms of both deal volume and dollar volume. In addition, the country increased the capital raised by nearly 10x its local minimum in Q4 2020.
Notably, no Canadian startup deals exceeded $500 million in the quarter; In fact, Trulioo’s $394 million Series D was the biggest. From there the list includes $300 million for ApplyBoard’s Series D and Vena’s $242 million Series C. We read the results list as indicative of an investment landscape in Canada not dominated by a handful of companies raising billions of dollars in rounds. This is good news, mind you: The data implies that the Canadian startup market is being outperformed, not just one or two standout companies, but more generally.