Investment in Shopify helps Canada with venture capital activity comeback

A $100-million investment in Ottawa-based Shopify helped push venture capital investment in Canada in 2013 up to pre-recession levels, according to Canada’s Venture and Private Equity Association.

Across the country, venture capitalists made 452 new investments worth a total of $2 billion in 2013, the CVCA says in report released on Thursday.

The report, prepared by Thomson Reuters, found that while the number of deals was only up slightly from 2012, the overall dollar value of those deals rose by over 31 per cent from $1.5 billion last year.

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Ontario-based companies got a larger share of investments than those in any other province. They received $589 million or 30 per cent of all VC in Canada.

“The investment results for 2013 are really encouraging and pushed Ontario, Quebec and BC into the top 10 regions for VC ranking in North America,” said Peter van der Velden, president of the CVCA and managing general partner of Lumira Capital, in a press release.

Investors from the United States, who make up the majority of foreign investors, played a larger role than in previous years.

A total of $828 million, or 42 per cent of all VC investments in 2013, came from foreign sources. That’s an increase from 2012, when foreign investors put $384 million into Canadian firms.

However, institutional investors continue to play a large role.

Nationwide the Business Development Bank of Canada, with 86, had the most investments. In total they were worth approximately $74 million.

Celtic House Venture Partners, which has offices in Toronto and Ottawa, was one of the top 10 private investment funds by number of deals. Celtic House made five investments worth approximately $12.3 million, which makes it the eighth most active.

Information technology companies drew the largest share of VC with $1.1 billion. That’s up from $719 million last year.

Alternative energy and clean technology companies got investments of $324 million, up from $90 million in 2012.

Non-tech companies received $327 million, up from $172 last year.

Pharmaceutical and life sciences companies was the only sector to see less activity. Its investments declined from $342 in 2012 to $250 million in 2013.

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