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.

Despite a traditionally slower third quarter, investment activity reached CAD $2.6B, largely driven by investment in Clio, the largest software funding round on CVCA records.  

Clio, a BC-based legaltech company, raised CAD $1.24B in Q3, accounting for 47% of total quarterly investment. The overall deal count dropped by 17% to 130 deals, but the average deal size surged to CAD $20.4M, the third highest on record, reflecting a continued focus on established companies. 

Challenges persisted at the early stages of investment, with pre-seed and seed funding continuing to see a reduction. Pre-seed deals accounted for CAD $64M across 77 transactions, while seed funding dropped to CAD $386M from 141 deals. Early-stage investments remained steady, with CAD $2.5B invested across 134 deals, while growth-stage deals saw a major boost driven by the Clio transaction. 

“While the Clio deal demonstrates the strength of Canada’s later-stage companies, we’re seeing a concerning decline in seed and pre-seed investments,” said Kim Furlong, Chief Executive Officer, CVCA. “These early-stage rounds are typically funded by high-net-worth individuals (HNWIs) and angel investors, but recent shifts in tax policy—particularly capital gains taxes—have sent a signal to the market and are de-incentivizing risk-taking at this critical stage. Without investment at the foundation, we risk stunting the pipeline of high-growth companies and innovation in Canada. You don’t grow what you don’t seed, and this drop in early-stage funding continues, it will have long-term consequences for the ecosystem.” 

The information and communication technology (ICT) sector led the quarter, accounting for 60% of all invested dollars. Life sciences remained steady, raising CAD $939M across 98 deals, while clean technology saw CAD $980M raised, largely driven by three major deals.  

Venture debt financing also increased, with CAD $528M raised from 25 deals, surpassing 2023 levels and approaching a record. This rise underscores the current fundraising challenges, pushing startups toward alternative financing solutions. 

Exit activity saw 30 exits, totalling CAD $4.6B in value. Mergers and acquisitions (M&A) led the way, with 27 exits contributing CAD $4.3B, while there continued to be no venture-backed IPOs recorded. 

While deal volume declined in the third quarter, significant transactions in key sectors continued to demonstrate the performance of private equity as a driver of value creation. 

Private equity investments reached CAD $1.9B in Q3 2024, representing a 54% decrease from the CAD $4.2B in the previous quarter. Despite the slowdown, year-to-date PE investments have matched the total for 2023, with buyout and privatization deals contributing 57% of total investment value. Privatizations have reached CAD $2.2B year-to-date, reflecting investor focus on assets with strong potential for value creation in the current market. 

“Even with fewer deals being made this quarter, private equity investors are strategically focused on value creation,” said Kim Furlong, Chief Executive Officer, CVCA. “The trend toward larger transactions in sectors such as technology and manufacturing reflects a disciplined approach to operational improvements and growth opportunities. Private equity remains a key force in unlocking value, particularly as investors prioritize long-term value over short-term gains. 

The information and communication technology (ICT) sector led private equity investments with CAD $3.8B invested over the first nine months of 2024, accounting for 37% of all PE dollars. Automotive and transportation followed, raising CAD $1.5B. Meanwhile, the industrial and manufacturing sector was the most active, with 112 deals; however, total investment value fell short of previous years. 

Exit activity surged in Q3, with 64 exits valued at CAD $5.5B. Mergers and acquisitions (M&A) accounted for 75% of all exits, contributing 32% of the total exit value. Secondary buyouts comprised the remaining 25%, generating 68% of the disclosed value. No PE-backed IPOs were reported in Q3 2024, in line with broader market trends globally.