The first half of 2022 was a strong period for Atlantic Canadian venture capital deals, buttressed by nearly record-breaking fundraising activity from Nova Scotia, according to data released Thursday by the Canadian Venture Capital and Private Equity Association, or CVCA.

The organization’s Canadian Venture Capital Market Overview found that East Coast startups raised $115 million in 21 deals in the period that ended June 30. 

Nova Scotian startups booked 11 raises worth a combined $78 million — the province’s second highest number of deals ever for the first half and the highest dollar-value in recent years. New Brunswick companies raised $23 million from six deals. Newfoundland and Labrador raised $11 million from four deals and Prince Edward Island saw one deal worth $3 million.

The data from the Atlantic provinces is in contrast with a national trend that CVCA Chief Executive Kim Furlong described in the report’s preamble as being defined by high net worth investors and family offices growing more tight-fisted in the face of economic headwinds.

“We’re seeing activity mirror what we saw in 2020,” wrote Furlong. “(General partners) are taking a cautious approach, deploying dollars more slowly and rethinking strategy. The fundraising environment has shifted slightly.

“We’re seeing the same trend lines around the world as market volatility, inflation and interest rate pressures are impacting the investment landscape.”

In the second quarter specifically, Atlantic Canadian companies raised a combined $51 million, down only slightly from the first quarter’s $64 million. Nova Scotia led the funding with $36 million in VC investment. New Brunswick companies fared less well at $4 million this quarter, and Newfoundland raised $8 million, more than double its first quarter figure of $3 million. The one deal from PEI was a $2.95 million round raised by Charlottetown-based PayTic and led by Halifax's Build Ventures.

The CVCA does not publish funding data by quarter, instead favouring cumulative figures. Entrevestor has calculated second quarter results by subtracting the first quarter numbers from the combined second half data.

Nationally, the news is more mixed. Canadian startups raised $1.7 billion in the most recent quarter, but that figure is down sharply from $4.5 billion in the first quarter.

Also possibly signalling a decrease in the capital on offer was a shift in the types of deals. The CVCA found that seed-stage companies had their best quarter ever with $263 million raised, with the signs of weakness showing mostly among more expensive later- and growth-stage companies.

The number of mega deals — those worth $50 million or more — also declined sharply in the second quarter to just eight, compared to a high of 17 last quarter.

And notably, no startups have had their initial public offerings so far in 2022.

“Canadian VC activity can expect a continuation of a tightened market condition in the second half of 2022, particularly for later and growth stage investment, as tougher macroeconomic conditions make it more difficult for companies to grow and IPO,” said the report.