Atlantic Canadian companies secured a better-than-average $35 million in venture capital funding in the first quarter of 2021, and continued to attract private equity financing, said the Canadian Venture Capital and Private Equity Association on Tuesday.

The CVCA’s quarterly data showed that startups in the four eastern provinces completed 17 VC deals from January to March, amounting to $35 million. This strong-but-not-outstanding performance took place as Canada overall reported a record quarter for VC funding.

The association reported that Canada’s high-growth companies attracted $2.7 billion in venture capital invested over 175 deals, driven largely by a wave of mega-deals, worth more than $50 million each.

“The record quarter was propelled by late-stage deals with an increase in investments in Canada’s best performing companies,” said CVCA Chief Executive Kim Furlong in a statement. “This rise of growth is contributing to the current IPO rage which is expected to continue throughout 2021. It’s an exciting time for Canada’s innovation sector and a testament to the role VCs play in our economy.”

In Atlantic Canada, the CVCA reported eight deals in New Brunswick with a value of $14 million. The association did not single out any deals but the largest funding round announced in New Brunswick in the first quarter was SomaDetect’s $6 million raise led by Ag Tech Canada.

Nova Scotia booked $19 million in VC funding across seven deals, three of them in the life sciences sector. The largest deal announced in the region in the quarter was Dartmouth-based Outcast Foods raising $10 million in a round led by Arlene Dickenson’s District Ventures Capital.

Two deals worth $2 million were announced in Newfoundland and Labrador.

Venture capital flows are uneven and can change from quarter to quarter, but Atlantic Canada seems poised to show a strong year in venture capital. In the second quarter, East Coast startups like Arcturus, Milk Moovement, QRA Corp., Sentry, LifeRaft, and ReelData all announced seven-figure funding rounds. New York- and Halifax-based Cape Privacy closed a US$20 million round in April, though it may not be included in CVCA data if it’s judged to be a U.S. deal.

Atlantic Canada booked the largest exit of the quarter as Nasdaq US$2.75 billion acquisition of Verafin, announced last September, closed early in the year.

 The CVCA also said Atlantic Canada continued to attract private equity funding in the first quarter, a trend that first showed up in 2020. (While VCs make series of minority investments in high-potential startups, private equity funds tend to take larger stakes or full ownership in more mature companies with strong cash flows.)

The association said there were nine private equity deals totaling $21 million in Atlantic Canada in the first quarter. It’s a small total when you consider Quebec alone reported 107 PE deals totalling $1.1 billion, but the East Coast was all but ignored by private equity investors before 2020.

One interesting aspect of the Atlantic Canadian private equity investments is that five of the nine deals involved ICT companies. It’s part of a national trend in which buyout funds are targeting digital companies more than before.

“For the first time, we’re seeing more ICT companies receive PE dollars than any other sector,” said Furlong. “We have been waiting for this evolution in PE as Canada’s innovation sector continues to grow and mature.”