Venture capital investment and deals activity in Canada are literally going gangbusters and the pace doesn't seem to be subsiding.
Second-quarter venture capital investment in Canada skyrocketed to US$4.1 billion, almost doubling from the first quarter, according to the Q2'21 edition of the KPMG Private Enterprise Venture Pulse report.
In just the first half of 2021, VC funding in Canada has already shattered the 2019 full-year record of US$2.88 billion.
Not surprisingly, the health and biotech sectors have been hot areas of investment. A lot of companies are looking at how to apply mNRA technology outside of COVID-19 vaccines, such as for diabetes or cancer research. Given its potential applicability, we are likely to see a lot more investment in the future.
Fintech and biotech artificial intelligence (AI) is also generating a lot of interest given Canada's strong research pedigree. Over the last few quarters, there has been a lot of activity among AI-focused startups and scaleups, including a C$100 million Series A raise by autonomous vehicle startup Waabi, highlighting confidence in the growing capacity for Canadian companies to commercialize AI innovations. Deep tech also continued to garner attention, primarily from big pension funds and institutional investors with patient capital looking to make bets on globally impactful future technologies.
With AI and tech ecosystems flourishing, Canada is starting to rival the likes of Silicon Valley. Montreal, Toronto, and Vancouver, most notably, will be leading innovation hubs in the Americas in the next four years, according to KPMG International's recent Technology Innovations Hub report. The analysis is based on the city's infrastructure, university community, demographics, and tax incentives as well as the regulatory environment and investment funding.
Globally, VC funding in the second quarter reached a new high, with US$157.1 billion raised across 7,687 deals. A robust IPO market, high valuations, and a seemingly endless supply of dry powder helped drive VC funding, particularly in sectors like fintech and business-to-business (B2B) services. While globally fintech was the most attractive sector of investment, health, biotech, edtech, gaming and food delivery continued to see significant investment activity.
For more information on Canadian and global VC trends, see KPMG Private Enterprise's quarterly Venture Pulse report.
Download the global report.