CVCA’s public quarterly market overview reports provide a deep analysis of the Canadian market, offering a panoramic view of private capital trends and investments. These comprehensive reports utilize data from the CVCA Intelligence platform, Canada’s foremost private capital database. They highlight performance indicators, emerging sectors, and strategic shifts, empowering stakeholders with crucial insights for informed decision-making.

In the first half of 2024, VC investments totaled nearly CAD $3.6B across 279 deals. Q2 2024 alone saw CAD $2.4B invested across 143 deals, marking an 85% increase in dollars invested from Q1, though still trailing behind Q2 2023 levels. Despite the lowest deal volume since 2020, the average deal size continued to grow, reflecting investors’ focus on companies with proven track records and strong fundamentals. 

The most affected by the cautious investment climate, seed investments have reverted to 2020 levels following several strong years of growth, as entrepreneurs face difficulties raising. While the number of early-stage investment deals is consistent with last year, the investment value in this stage is on track to be the lowest since 2020. Conversely, later-stage investments saw the number of deals reach its lowest on record, although the dollars invested remained consistent with last year’s numbers. 

“The second quarter of 2024 continued the momentum we saw earlier in the year, with steady venture capital investment. This performance is driven by investors doubling down on companies with proven track records and strong fundamentals, as they continue to navigate the environment cautiously,” said Kim Furlong, Chief Executive Officer, CVCA. “While this performance demonstrates resilience, the persistent decline in seed deals raises concerns about the long-term pipeline of investment-ready companies. We will continue to monitor this trend closely as it could impact the sustained growth of the ecosystem.” 

The information and communication technologies (ICT) sector led the way in H1 2024, with $2B invested across 136 deals in the first six months. This marks a significant 237% increase in dollars invested quarter-over-quarter, driven by the closing of two mega deals. Cleantech also saw impressive growth, raising $589M from 25 deals in H1 2024, with Q2 alone seeing a quarter-over-quarter increase of 8% in deal volume and a 133% rise in dollars invested to $412M. The life sciences sector maintained a consistent performance year-over-year, with $545M invested across 68 deals. 

Venture debt financing remained stable, with $219M invested across 20 deals, underscoring its continued role in supporting startups in a tightening funding environment.  

2024 has already witnessed robust exit activity, with 25 exits totaling $3.6B. While there were no VC-backed IPOs yet this year, there have been several high-profile exits via M&A in the first half of 2024. A standout transaction was the acquisition of Fusion Pharmaceuticals by AstraZeneca in Q1, valued at CAD $3.3B, accounting for 97% of the total M&A exit value in H1 2024. 

Despite the adaptability demonstrated by investors, the government’s decision to increase the inclusion rate on capital gains, as presented in the recent federal budget, remains a significant concern for the industry. The CVCA continues to press the government and stakeholders to recognize the detrimental effects it will have on Canada’s future prosperity. 

In H1 2024, PE investments totaled CAD $8.3B, with CAD $4.2B raised across 173 deals in Q2 alone. This performance is already in line with the total investments seen in 2023 and is on track to surpass the $20B threshold by year-end. The average deal size reached CAD $25M in H1 ($24M in Q2), the highest since 2019, with the closing of 3 deals of over $1B. 
 
“Despite the challenges in the market, this quarter has been exceptional for private equity in Canada,” said Kim Furlong, Chief Executive Officer, CVCA. “Investors are deploying dry powder into sizeable deals, particularly in sectors showing strong performance and potential for growth. Privatization deals remain a significant theme, with several notable transactions expected to close later this year or in early 2025. The current environment has also seen a realignment in valuations, providing an opportune moment for PE investors to make substantial investments in small and medium-sized enterprises (SMEs), which are critical to Canada’s economic stability and job creation.” 
 
The information and communication technology (ICT) sector experienced a significant boost in Q2 2024, attracting nearly CAD $3.8B in investments across 62 deals in the first half of the year. With investment levels expected to match the highs of 2021, the sector saw a 79% surge in investment value quarter-over-quarter, driven by two mega deals. Additionally, the automotive & transportation sector showed strong performance, raising CAD $1.4B from 13 deals in H1, the second-most dollars raised in a sector this year. Meanwhile, the life sciences sector continued its momentum, securing CAD $731M across 30 deals, demonstrating performance consistent with the last two years. 
 
Exit activity remained steady in the first half of 2024, with 44 exits completed, valued at CAD $5.7B—already surpassing the total exit value of 2023 and on track to exceed the values set in 2021 and 2022. M&A deals dominated, accounting for 75% of all exits and contributing 58% to the total exit value. Secondary buyouts were also significant, representing 25% of the exits and contributing 42% to the total exit value. Notably, there were no PE-backed IPOs reported in H1 2024.