Ottawa-based companies raised 23 per cent less venture capital in 2023 than they brought in a year earlier, a new study says, mirroring a national trend that saw total VC funding to Canadian firms drop by more than third last year compared with 2022.
In total, local companies landed $194 million in venture capital from 25 deals last year, research firm CPE Analytics said in its 2023 Canadian Venture Capital Report released Monday.
That’s down from $252 million in total VC funding for Ottawa-based enterprises in 2022 and $396 million in 2021.
OBJ360 (Sponsored)
Investing in the next generation: Ottawa businesses encouraged to build futures through mentorship
Do you remember the mentor in your life who helped shape your career? In the business world, success often depends on the connections we build, fuelled by guidance and support
World Junior Championships set to boost Ottawa’s economy and global reputation
The World Junior Championships will kick off in Ottawa in December, bringing tens of millions of dollars of economic activity to the city, as well as a chance for local
Ottawa ranked sixth among Canadian cities in overall VC fundraising last year, the same as in 2022.
Overall, Canadian companies raised $6.07 billion worth of venture capital in 2023, a 37 per cent decline from 2022’s total of $9.43 billion. Total deal volumes remained relatively stable at 693 in 2023, down slightly from 708 the previous year.
Richard Rémillard, president of Ottawa-based Rémillard Consulting Group, said 2023 was “another very difficult year for venture capital in Canada” following a disappointing 2022 that saw total VC fundraising by Canadian firms plummet more than 33 per cent from $14.2 billion in 2021.
“Investment volume was at its lowest level since 2019 while industry fundraising was equally morose,” Rémillard said in a statement. “The industry continues to be dominated by (U.S. firms), particularly, and foreign sources of capital even from the likes of China. At the same time, 2023 registered a complete lack of interest in the venture asset class by corporate Canada as no new corporate funds were raised.”
Toronto once again led all Canadian cities in VC fundraising at $1.78 billion, down from $2.49 billion the previous year.
Montreal was second at $1.3 billion, down from $2.1 billion in 2022, while Vancouver was No. 3 at $844 million, a decline from $1.7 billion in 2022.
Ontario was the centre of VC activity last year, accounting for $2.6 billion worth of investments.
According to the report, early-stage companies brought in the biggest haul, raising $2.92 billion, while growth and late-stage financings accounted for $1.98 billion and seed/pre-seed financings raised $581 million.
Among sectors, ICT companies raised $3.23 billion or 53 per cent of total disbursements, while cleantech companies secured $1 billion and biotech firms brought in $937 million.
Canadian investors contributed $2.62 billion, slightly ahead of the $2.53 billion from U.S. investors.
CPE Analytics tracks equity and debt financing from a range of sources, including angel investors, VC firms, private equity firms and law firms.
The report includes equity and quasi-equity direct investments in companies, but excludes private equity transactions and financing by foreign-headquartered or -domiciled companies with Canadian subsidiaries. As a result, the report doesn’t tell the whole story of how investment capital is helping grow Ottawa’s tech ecosystem.
2023’s top venture capital cities
- Toronto, $1.78 billion, 181 deals
- Montreal, $1.3 billion, 85 deals
- Vancouver, $844 million, 88 deals
- Calgary, $533 million, 88 deals
- Kitchener, $340 million, 17 deals
- Ottawa, $194 million, 25 deals
- Edmonton, $156 million, 6 deals
