More than 40 percent of 2012 transactions in Québec's venture capital industry in 3rd quarter
MONTREAL---Activity in the Québec venture capital (VC) market returned to cruising speed in the third quarter (Q3) of 2012, advancing at a sustained pace with $112 million in investments, a slight 2% decline from Q3 2011. The life sciences sector stood out, returning to the forefront due in particular to US$35 million in financing for Thrasos Innovation, a Montréal-based biopharmaceutical company. These observations are taken from the Q3 2012 report on activity in the VC industry, compiled by Thomson Reuters and published today by Réseau Capital.
Québec VC market returns to stability
The level of activity in the Québec VC market corresponds roughly to what can be observed in the rest of Canada and in the United States, which experienced declines of 6% and 12% respectively from the same period of the previous year. In Québec, a total of 26 companies shared the $112 million invested in Q3 2012.
"Québec captured nearly one-third (31%) of all VC funds invested in Canada, also accounting for 30% of all companies financed in the country during the third quarter of 2012," noted Jack Chadirdjian, President and CEO of Réseau Capital. "And although the recovery is tentative and activity cannot compare to the exceptional numbers for 2011, it allows us to look forward to results that can compare favourably to those of previous years."
Life sciences take up the torch again
With a total of $51 million invested in the life sciences sector, more than double the Q3 2011 figure, this field accounted for 46% of all funds invested during the quarter, one of its largest market shares in years. The transaction involving Thrasos Innovation (US$35 million) was the largest in Canada in the life sciences sector.
Information technologies accounted for 21% and clean technologies for 11% of total VC activity in Q3, while non-technology sectors saw sharp growth over the same period last year, with 22% of all investments.
Investments in startups and seed-stage companies up sharply
Early-stage activity gained ground all across Canada, and Québec was no exception. "It is interesting to note that early-stage development, with 77% growth compared to the previous year, took in $63 million of the total investment for Q3 2012," Mr. Chadirdjian added. "This is very encouraging news in terms of stimulating interest among entrepreneurs who are seeking to fund their innovation and research & development activities."
Other highlights in the Q3 2012 report
Foreign investors, accounting for one-quarter of all investments in Q3 2012, injected $28 million, which is 38% more than in the same period last year. Local VC funds and other Canadian investors went the opposite way, with a decline of about 11%.
VC fundraising activity in Canada slowed considerably in comparison with the first two quarters of the year. Despite this, as at September 30, new funds raised totalled $1.5 billion, already topping the $1.0 billion total raised for all of 2011. It is worth noting that Québec-based funds accounted for 51% of all new commitments in the first nine months of the year, with $766 million pledged.