Venture capital investment in Canadian companies hit a record high in the second quarter of 2020, much to the surprise of industry leaders, according to Canadian Venture Capital and Private Equity Association’s full report for Q2 and H1 2020.
The second quarter of 2020 saw $1.66 billion in venture capital invested across 145 deals, a 23 percent year-over-year increase and more than double the amount invested in the first quarter of 2020 ($818 million).
“[These trends tell] you that people expected an economic correction.”
The almost $1.7 billion invested in the quarter is the highest amount of venture capital invested in a Q2 since the Canadian Venture Capital and Private Equity Association (CVCA) began collecting data on the industry in 2013.
This quarter, which tracks VC activity between April and June, is the first quarter of 2020 that reflects the effect of the COVID-19 on the market. However, Kim Furlong, CEO of the CVCA, expressed surprise to see such a strong quarter.
“This is not a normal quarter by all means [sic],” Furlong said in an interview with BetaKit. “It’s surprising that we are shy of $2 billion for Q2. This has been eight times that we’ve had a $1 billion quarter since we started reporting [VC and PE data in Canada]. And, if you had asked me in March, ‘Kim is your Q2 going to be a billion dollars?’ I would have said ‘no way.’”
Furlong attributed the surprisingly high amount of venture capital to stimulus and incentives from the federal government, as well as VC firms “doubling down” on investing in the “leading stars” in their portfolios.
“Everyone from March to June was looking at portfolio holdings and saying, ‘we need 18 to 24 months of runway. We need to put this cash to these companies,’” said Furlong, noting that VCs were more likely to put “large injection[s] of capital” into portfolio companies that could demonstrate the ability to “be thoughtful, pivot, add a plan for COVID.” The CVCA CEO’s findings reflect what many VCs have expressed to BetaKit in recent months.
Notable trends in CVCA’s Q2 2020 report point to that strategy. According to the report, later-stage companies received 50 percent ($1.2 billion) of all the venture capital in the first half of 2020. Overall, the first half of the year saw a total of $2.5 billion, spanning 264 deals.
Later stage companies receiving 50 percent of the pie in H1 2020 compares to the just 22 percent those companies brought in last year. Large deals, which CVCA lists as $20 million CAD or more, drove the majority of dollars invested in the first half of the year, accounting for 69 percent of total dollars invested.
In comparison, early-stage companies received $991 million in H1 2020, with seed-stage pulling in $199 million.
“It will be interesting to see if the trend continues, and we see the full year where early-stage funding remains low,” said Furlong. “Or, will VCs and founders find ways in the second half of the year to make things work in a virtual setting.”
Another notable trend was the downtick in VC-backed exits. While exits “picked up,” according to CVCA data, in Q2 with an additional seven exits closed, they remained “slow” in comparison with previous years, with only 10 exits so far in 2020. Life science (healthtech) companies, unsurprisingly however, saw an uptick in both exits as well as capital invested in H1 2020.
“[These trends tell] you that people expected an economic correction,” stated Furlong. “The market had been a bit of a bull market for 10 years. People went back to fundraise perhaps a little earlier than they would have in a normal time and people were sitting on capital.”
“And everyone knows that some of the best deals are done in a downturn,” she added. “So I think people are being thoughtful about their portfolio and just stimulating it and fueling it to bring it across the line.”
“Some of the agility that was demonstrated by governments this year has to be applauded.”
Furlong also attributed the trend to government stimulus packages and organizations like the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) developing programs to match VC investments. She pointed specifically to BDC’s Bridge Financing Program and EDC’s $250 million investment program.
Notably, BDC Capital was the most active VC firm in H1 2020, with $549 million invested in 38 deals. Inovia Capital invested the most amount of capital with $649 across 15 deals. Investissement Quebec invested the third-highest amount at $117 million for 10 deals.
“Some of the agility that was demonstrated by governments this year has to be applauded,” said Furlong, adding that while she was impressed by the speed of the government’s response to support the innovation sector she hopes to see further commitments.
The CVCA CEO noted that her organization is in talks with the federal government about creating a new program to support the sector, which would be in a follow on to the likes of VCAP and VCCI.
“These results, to me, point to stimulus and don’t necessarily point to maturity,” said Furlong. “We will be very strong in our conversations with the government for them to stay the course of potentially agreeing to do a third program.”
“I would love to see the government announce before the end of the year a commitment to stay the course and support this industry furthermore,” she added.
Photo by bantersnaps on Unsplash
AGF Management Limited and WaveFront Global Asset Management Partner to Deliver Investment Management Capabilities to Rapidly Growing China and South Korea Markets – GlobeNewswire
TORONTO, Sept. 21, 2020 (GLOBE NEWSWIRE) — AGF Management Limited (AGF) and WaveFront Global Asset Management Corp. (WaveFront) today announced the launch of AGFWave Asset Management Inc. (AGFWave), a new joint venture for providing asset management services and products in China and South Korea.
AGFWave combines AGF’s investment expertise and global brand strength with WaveFront’s existing distribution capabilities in China and South Korea, including partnerships with industry leaders in both regions.
“Combining AGF’s investment capabilities with the robust distribution channels and sales capabilities of WaveFront’s strategic partners Hwabao WP Fund Management, J Royal Asset Management and Vogo Fund Asset Management mean AGFWave is well positioned to capitalize on the rapidly growing asset management industries in China and South Korea,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF.
Initially, members of AGF’s quantitative investment team AGFiQ, will work together with members of WaveFront’s team as AGFWave’s Investment Committee. AGFiQ’s existing investment management resources and capabilities are a strong fit for WaveFront, aligning to a similar quantitative investment philosophy and boasting demonstrated strong track records in key areas of focus for these markets.
“We are very excited about the opportunity to partner with AGF and believe their unparalleled investment management expertise will not only lead to stronger demand for our current products, but enable us to develop and launch new products in key areas our partners and clients are eager to access” said Roland Austrup, Chairman and Managing Principal at WaveFront.
In addition to taking over investment management duties for existing market differentiated investment products on behalf of partners and clients, AGFWave will also be responsible for new product development in these markets, working closely with both Chinese and South Korean partners on exploring future opportunities to bring AGF’s other quantitative and complementary fundamental investment management capabilities to these rapidly growing markets. AGFWave, with its partners in China, is also positioned to offer China A-share products to Institutional investors globally.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With $37 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
About WaveFront Global Asset Management
Founded in 2003, WaveFront is a privately-owned global asset management company based in Toronto, Canada. Today, WaveFront manages over $1.7 billion for individual and institutional investors in North America, China and South Korea across a diverse range of investment strategies and solutions.
Informed by decades of research and experience through many market cycles, WaveFront’s success is based on applying a data-driven, scientific approach to observing and analyzing market behavior to identify and capture those opportunities that can deliver superior long-term investment performance for their clients.
Director, Corporate Communications
CI Financial buying US investment adviser Bowling Portfolio Management – BNN
CI Financial Corp. says it has signed a deal to acquire U.S. investment adviser Bowling Portfolio Management LLC.
The firm based in Cincinnati has US$450 million in assets under management.
Financial terms of the transaction were not disclosed.
Bowling provides financial planning and investment management services to high-net-worth clients.
CI has been expanding its operations in the U.S. this year in a series of acquisitions.
It says when all pending transactions close, it will hold interests in wealth management firms across the U.S. with combined assets of approximately US$11.5 billion.
Latest COVID-19 research investment supports knowledge exchange on social, cultural and economic impact of COVID-19 – Canada NewsWire
Research funding will help equip public, private and not-for-profit organizations to respond to challenges posed by pandemic
OTTAWA, ON, Sept. 21, 2020 /CNW/ – As Canada continues to manage the impacts of the COVID-19 pandemic, supporting the work of Canadian researchers is key to building a healthy, more resilient and prosperous country. Working together with government, industry and not-for-profit organizations, researchers from across the social sciences and humanities can help provide data, insight and evidence to guide our actions in the months to come while we navigate postpandemic economic and social recovery.
Today, the Honourable Navdeep Bains, Minister of Innovation, Science and Industry, announced an investment of over $4 million in funding through the Social Sciences and Humanities Research Council‘s (SSHRC) Partnership Engage Grants, to support 172 projects and almost 600 researchers working with businesses and community partners from across Canada. These grants provide short-term and timely support for partnered research activities that will inform decision-making in the public, private or not-for-profit sector.
In response to the early phases of the pandemic crisis, the latest Partnership Engage Grants competition included a special call to address COVID-19 related research. Over $3 million of the investment announced today will directly support 139 projects addressing this call. Some of these projects funded will study changes in the teaching profession, the pandemic’s impact on small- and medium-sized enterprises, mental health among entrepreneurs, and impacts on seniors and their community support services.
“The ongoing COVID-19 pandemic has posed unprecedented challenges around the world. While much of the focus to date has been on developing and testing effective countermeasures to control the spread of the virus, the work these researchers will be doing to examine the longer-term impacts of the pandemic on individuals, businesses and communities will better position Canada for a strong recovery.”
—The Honourable Navdeep Bains, Minister of Innovation, Science and Industry
“SSHRC’s investment in these diverse partnered research projects will advance critical knowledge needed to address the impacts of COVID-19 and the social, cultural and economic challenges facing citizens, communities and businesses in Canada and around the world.”
—Ted Hewitt, President, Social Sciences and Humanities Research Council
- SSHRC’s Partnership Engage Grants provide short-term and timely support for partnered research activities that will inform decision making at a partner organization from the public, private or not-for-profit sector.
- The Partnership Engage Grants COVID-19 Special Initiative provides researchers and their partners a unique opportunity to foster knowledge exchange on COVID-19 crisis-related issues, challenges and impacts. It offers a unique opportunity to exchange knowledge between postsecondary researchers and different sectors of society, including graduate students, postdoctoral researchers and other highly qualified personnel.
- The Partnership Engage Grants COVID-19 Special Initiative call is ongoing. Recipients of the September-deadline applications will be announced soon.
- The application intake for this first ever COVID-19 Special Initiative competition exceeded expectations. To ensure an appropriate response to this demand, SSHRC reallocated just over $3 million more to this initiative. This additional funding brings the total amount for the June and upcoming September competitions to almost $5 million.
SOURCE Social Sciences and Humanities Research Council of Canada
For further information: John Power, Press Secretary, Office of the Minister of Innovation, Science and Industry, 343-550-1456, [email protected]; Media Relations, Innovation, Science and Economic Development Canada, 343-291-1777, [email protected]; Media Relations, Social Sciences and Humanities Research Council, 343-549-6141, [email protected]
Trudeau Poised to Announce Three-Pillar Economic Recovery Plan – Yahoo Canada Finance
HSBC moved vast sums of dirty money after paying record laundering fine – ICIJ.org
AGAR: SCOTUS debate's bitter politics makes its way up to Canada – Toronto Sun
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Richmond BBQ spot speaks out about coronavirus rumours Vancouver Is Awesome
- Tech15 hours ago
Sony promises more PS5 pre-order stock for retailers – GamesIndustry.biz
- Politics24 hours ago
Mitch McConnell is the apex predator of U.S. politics – The Washington Post
- Tech22 hours ago
Asus TUF Gaming RTX 3080 OC Review – TechSpot
- Health15 hours ago
Confirmed positive COVID-19 case at Holy Cross elementary school in Kemptville – Ottawa Valley News
- Tech20 hours ago
Zotac's RTX 3080 Trinity performance is apparently gimped on purpose – AltChar
- Tech10 hours ago
Sony apologizes for PlayStation 5 pre-order disaster – Polygon
- Health20 hours ago
Staff and patients part of outbreak at Foothills Medical Centre – 660 NEWS – 660 News
- Media24 hours ago
RETRANSMISSION – MEDIA AVAILABILITY: CN Police officers available for media interviews during Rail Safety Week – GlobeNewswire