Another year of disruption for Canadian venture capital as AI, FinTech and cybersecurity reach new heights | Zoom Fintech

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PwC Canada and CB Insights have launched the MoneyTree Report on Funding Developments in Canada for the Second Half of the Year and Full Year 2019. All figures are in USD.

“High competition for funding from international buyers has created a healthy funding atmosphere for Canadian startups. “

This year, corporate capital funding (VC) hit a record $ 4.1 billion. Although Canadian funding saw an 11% drop in deal value last year, the report shows a 16% increase in funding year over year. Some big series from last year weren’t included in this year’s report, most notably Verafin’s report, because the company did not disclose debt and equity evasion, and the Sonder’s $ 210 million increase as the company is now headquartered in the United States.

A solid year for AI, FinTech and cybersecurity

Synthetic intelligence companies noticed high investor consideration in 2019, funding for Canadian AI companies more than doubled in the second half of 2019.

Last year’s funding to Canadian AI companies saw a 49% year-over-year increase in 2019 to $ 658 million, with a new record of 57 offers.

Sharing and funding of synthetic intelligence (Provision: PwC and CB Insights)

This doubling of funding to the sector was a 176% improvement in half from the same period in 2018. Although there was a jump in {dollars} invested, there was a slight drop in confidence. transactions, which the report indicated. shows the rise of larger offers within the sector. The C $ 200 million B streak of the AI ​​component was among the top 5 venture capital rounds of the year.

“The share of staged transactions with Canadian AI startups suggests that the ecosystem is maturing, as many companies have moved from early stage early stage to expansion over the past few years,” he says. report.

FinTech companies have also seen a persistent increase in funding, in addition to the exercise of transactions, amounting to $ 776 million in 2019, a 104% increase over 2018. The number of transactions in the FinTech industry rose to 59, up 11% in one year.

“There is a powerful hyperlink between well-funded FinTech companies and strategic channels [and] partnerships with the largest banks, ”said Eugene Bomba, National Expertise Industry Fellow at PwC Canada.

The cybersecurity industry also had a strong year, with $ 398 million deployed across 19 offerings.

“In tune with international developments, 2019 has been a dossier year for cybersecurity funding in Canada alongside an exercise of growing agreement,” said Sajith Nair, Cybersecurity and Privacy Associate at PwC Canada. “From private ID security to important business assets, cybersecurity funding continues to increase as organizations and leaders understand the importance of preventative and detection measures in order to stay on top of things. away from a major disaster and build a digital belief.

The fundraising exercise within the Canadian digital healthcare home declined slightly in 2019. Digital health companies, in particular, saw a reduction on every fundraising and funding agreement last year, with invested capital decreasing by 26% year on year and the amount of transactions decreasing by 14%. .

“The complexity of payment methods and supply cycles in digital wellness continues to be an issue for progress and adoption in Canada,” said Cameron Burke, general manager of the expertise sector at PwC Canada. “The fact that well-being and well-being represented more than 50% of H2 2019 shows that complexity and capital go in the direction of a technique of easier progress. “

RELATED: Procurement Could Be Canada’s Biggest Barrier To Commercializing Health Technology Innovation

Toronto stays on top, British Columbia sees case funding

Toronto businesses have noticed a drop in larger offerings, with funding increasing 1% in 2019, despite a 3% drop in transactions. The predominantly Toronto-based companies continued to obtain essentially the most offerings relative to various Canadian markets, although offerings in the region edged down in the second half of 2019, falling back to the ranges seen in the second half of 2018.

Although Toronto funding came for the second year in a row, British Columbia also saw case funding in 2019. Driven by larger bids, the Western Province saw a 133% improvement in total funding compared to 2018.

Share of transactions by market (Supply: PwC and CB Insights)

Other notable markets included Vancouver, which was up 134% from the previous year, with $ 931 million raised from 72 offers. Last year, Vancouver-based Clio raised a C $ 330 million D streak, meaning the plane accounted for about 27% of the city’s funding, according to information provided by the MoneyTree report. In Calgary, the 2019 bargaining year increased from 5 to 22 offers, while funding rose to $ 132 million, a 6% improvement over 2018 funding ranges, Ottawa raised $ 119 million dollars in 2019.

Seed and start-up investments accounted for the lion’s share of deals in the second half of 2019. The report indicates that the share of staged deals has remained relatively constant over the last few quarters, with almost all of the deals going to retailers. seed and start-up companies.

RELATED: Narwhal Listing 2020 Follows Year of Huge Rises, 42 Potential Canadian Unicorns

Funding by domain in 2019 (Supply: PwC and CB Insights)

“The high competition for funding from international buyers has created a healthy funding atmosphere for Canadian startups, with an upward trend in the size of transactions and valuations,” said Shivalika Handa, chief financial officer of the company. PwC Canada. “While this is very optimistic, the founders want to think about the long-term effect of high valuations on future funding rounds and exit alternatives.”

BetaKit is a media companion of PwC MoneyTree Canada.

Supply of PwC images

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