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Venture Pulse Q2 2020: COVID-19 reshapes Canadian venture capital market

Venture Pulse Q2 2020

Canadian investment holds steady

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Sunil Mistry

Audit Partner, Enterprise and TMT

KPMG in Canada

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Healthtech. Biotech. Edtech.

These three sectors, often overshadowed by other tech startups, defined venture-capital market activity in Canada during the second quarter. The global COVID-19 pandemic and related social distancing restrictions highlighted both the value of and urgency for virtual care services, virtual education, and life-saving biotech research and treatments.

The top deals in Q2 included:

  • C$142 million in financing for Vancouver-based Abcellera, a biotech firm that researches and develops human antibodies to address pandemics and common diseases
  • C$81 million deal for Ventus Therapeutics, a Montréal-based company that develops medicines that target immune systems
  • C$74 million Series C round of funding for Waterloo-based ApplyBoard, the newest member of Canada's exclusive unicorn club. The company claims its education software platform is now valued at $2 billion.
  • C$68 million offering for WorkJam, also out of Montréal, to further grow its digital platform for front-line workers

They enabled VC investment to hold relatively steady, underscoring our market's growing maturity. Like other markets, Canadian VC investment stood at US$881.1 million for the three months ended June 30, down just 2 per cent from the first quarter and by 17 per cent compared to the year-ago quarter.

Still, the coronavirus pandemic is reshaping VC markets. Globally, many VC investors hit the pause button as countries and economies went into lockdown and everyone adjusted to the new reality of meeting and negotiating deals virtually. In Canada, we saw the number of deals decline to 96 from 147 in the previous quarter and 188 in the year-earlier quarter.

Globally, VC investment may have been buffered somewhat in the first half of the year. Given the significant amount of uncertainty around the world, we expect VC investors will remain highly focused on their own portfolio companies and continue to scout out firms in the health, biotech, and edtech spheres that are helping to save lives or make life better for all of us.

For more information, check out this quarter's edition of Venture Pulse.

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