Ottawa returns to top five Canadian cities attracting venture capital in 2019: MoneyTree

Ottawa

Ottawa companies taking on venture capital in 2019 have raised more on average than firms in Canada’s other major tech hubs, according to the most recent MoneyTree report.

The now-biannual Canadian VC report, compiled by PwC and CB Insights, reports that Ottawa companies have collectively raised $122 million across 11 deals so far this year. The first and second quarters of the year each saw $61 million flow into the nation’s capital, the report says.

That level of VC activity was enough to bring Ottawa back into the top five of Canadian cities attracting financing by number of deals. Waterloo edged out Ottawa with $131 million raised over 15 deals, with Toronto, Vancouver and Montreal taking the top three spots in that order.

Despite the relatively fewer number of deals and magnitude of investments, Ottawa took top spot from the other tech hubs in terms of average deal value. Ottawa companies raised an average of $15.3 million per deal, with Waterloo next at $11.9 million and Toronto firms only attracting an average of $8.7 million per round.

The MoneyTree report states that Ottawa is on pace to surpass its total 2018 figures, which saw a few relatively slow quarters boosted by Assent Compliance’s massive series-C round in Q4 of last year.

Across Canada, funding levels are down 13 per cent compared with the first half of 2018. This may be connected to investors’ renewed interest in early stage capital deals: while seed rounds made up 36 per cent of deals in the first half of 2018, seed funding has comprised slightly less than half of all deals thus far in 2019.

While the pace of funding to artificial intelligence and cannabis firms has dropped year-over-year, sectors such as cybersecurity, fintech and digital health are seeing spikes this year.