Searching through our “Better Late Than Never” folder, we found the CVCA venture capital data for 2019, which shows a record year for Newfoundland and Labrador and an interesting development in Western Canada.

The Canadian Venture Capital & Private Equity Association, known by its former initials of CVCA, released its annual VC data in mid-March. I admit it: I missed the release amid the mounting crisis surrounding COVID-19. The pandemic will change the landscape for VC investment in Canada this year, but it’s worth taking a look at a few developments highlighted in the last CVCA report.

The headline message was that Canadian innovation-driven companies raised a record $6.2 billion in VC in 2019, driven by 28 mega deals of more than $50 million each. As usual, 85 percent of the capital was raised in three provinces – Ontario, Quebec and British Columbia.

“Canadian entrepreneurs have continued to aggressively grow their companies and Canadian VCs are helping push Canadian innovation forward,” said CVCA Chief Executive Kim Furlong in the report.

It also noted that the largest deal by a long shot was the $515 million equity-and-debt funding round by St. John’s-based Verafin, which produces anti-fraud and anti-money-laundering software. The funding syndicate included Information Venture Partners, BDC Co-Investments, Northleaf Capital and Teralys Capital.

Because of that deal, Newfoundland and Labrador recorded $524 million in six deals last year, a level exceeded only by the three largest provinces. It’s also worth noting that even without the Verafin deal, The Rock recorded $9 million in VC funding, which was more than any of the previous three years.

Source: CVCA

Elsewhere in Atlantic Canada, Nova Scotia booked $67 million in 23 VC deals, unchanged from a year earlier. New Brunswick, which reported a record $78 million in VC funding in 2018, fell to $16 million on 15 deals in 2019. And Prince Edward Island last year reported two VC deals worth $1 million.

P.E.I. did better in the private equity league tables, as Charlottetown-based MicroSintesis raised $16.4 million in PE funds, the only private equity deal in the region last year.

In total, Atlantic Canada raised $608 million in VC last year according to the CVCA, almost four times the 2018 level.

For the fourth year in a row, Atlantic Canada raised more VC investment than the three Prairie Provinces – an oddity given that the western trio have almost three times the population and four times the GDP (as of 2018) of Atlantic Canada. But the 2019 CVCA data shows the market for innovation and venture capital is improving in the resource-dominated prairies. Alberta, for example, raised $277 million – a tenfold increase from the previous year. That increase was dwarfed by a 14-fold increase next door in Saskatchewan, which booked $114 million in VC funds. Manitoba was a distant third on the Prairies, raising only $4 million in venture capital.

Source: CVCA

Here’s the difference between the Prairie and Atlantic Provinces last year: the easterners reported one record-setting deal, whereas there was broad-based improvement in the West. For the first time in years, Alberta and Saskatchewan raised more VC money than the three Maritime Provinces, and they did so by a fair margin. It's great for the country that there's more VC being generated in the Prairies, but it could be worrying if Atlantic Canada falls behind the rest of the country in the VC tables. 

For a few years, Atlantic Canada could claim it was “punching above its weight” in the startup space, and one clear indication was that it consistently raised more than the Prairies in the CVCA data tables. No one knows what will happen as we pass through the current downturn, but we'd best hope we continue to punch above our weight during the recovery.