Ottawa lagged behind other major Canadian tech hubs in attracting venture capital in 2020, according to a new study that says the city’s total funding haul fell more than 30 per cent last year compared to 2019.
Local companies landed a combined $111 million in fresh venture capital last year, the latest Canadian Venture Capital Report compiled by CPE Analytics says, putting Ottawa in 11th place among all Canadian cities.
That’s down from the $168 million in new funding Ottawa companies secured in 2019, the fifth-highest total in the country. The number of firms that received funding also dropped considerably year-over-year, from 37 to 25.
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While the top three cities on the list – Toronto, Montreal and Vancouver – also saw their VC tallies plummet last year as the pandemic wreaked havoc with the global economy, other urban centres leapfrogged past the National Capital Region.
Quebec City, Calgary and Kitchener, which all drew less funding than Ottawa in 2019, moved ahead of the capital last year. Meanwhile, three cities that didn’t appear on the 2019 list – Edmonton, Mississauga and Burlington – also finished well in front of Ottawa.
The city’s venture capital scene got off to a solid start in 2020, with local firms racking up $83 million in total funding from January to the end of June on the strength of headline-grabbing deals such as Solink’s $23-million series-B round, $17 million in new funding for Equispheres, software startup Tehama’s US$10-million round and cybersecurity firm Corsa Security’s $7-million deal.
But that pipeline slowed to a trickle in the second half of the year, when local companies attracted just $28 million in new investments – with last-mile logistics startup GoFor’s $20-million series-A round accounting for more than two-thirds of that total.
By contrast, overall Canadian VC activity picked up steam in the fourth quarter after a sluggish start, Richard Rémillard, president of Ottawa-based Rémillard Consulting Group, said in a news release, resulting in a “better-than-expected” full-year result.
Nationally, VC firms invested a total of $5.3 billion in Canadian companies last year, down nearly 30 per cent from 2019’s record haul of $7.5 billion. The total number of deals fell 12 per cent to 610.
Meanwhile, a major Ottawa-based law firm once again cracked the list of Canada’s top firms catering to VC deals. According to the report, LaBarge Weinstein LLP was involved in 25 national transactions last year, the fourth-highest total of any firm in the country.
2020 TOP VENTURE CAPITAL CITIES
Toronto ($1.2 billion)
Vancouver ($877 million)
Montreal ($632 million)
Kitchener ($435 million)
Quebec City ($343 million)
Calgary ($313 million)
Edmonton ($239 million)
Mississauga ($207 million)
Burlington ($160 million)
Burnaby ($129 million)
Ottawa ($111 million)