Venture capital investment in Atlantic Canada was already weakening before the COVID-19 crisis sent shockwaves through the economy, new data from the Canadian Venture Capital and Private Equity Association shows.

In fact, if you consider the funding announcements of the past two months, it’s a safe bet that Atlantic Canadian VC funding will be larger in the second quarter – when the shutdown was in full force – than the first.

The CVCA released its first quarter funding data on Wednesday, showing that Atlantic Canadian startups raised a mere $6 million on 14 rounds of funding in the three months ended March 31. By contrast, the region’s startups raised $22.4 million the first quarter of 2019.

The national association for VC and private equity investment said that Canada overall reported $831 million in funding over 117 deals –7 percent lower than the $897 million invested in the first quarter of 2019.

Though the first quarter 2020 results were 45 percent lower than the fourth quarter of 2019, the CVCA Chief Executive noted it was still a healthy level of funding considering virtually no business was done in late March.

“The venture capital investment performance in the first quarter demonstrates the health of the ecosystem in a pre-COVID-19 environment.” said CVCA Chief Executive Kim Furlong in a statement. “We expect to continue to see a drop in the second quarter and potentially the third as investors have increased their reserve funding for existing portfolio companies. Also, the challenges in conducting due diligence given social distancing may impact the number of deals that get done in the next few months.”

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The CVCA data showed that first-quarter funding was concentrated in the major Canadian centres and there was little activity in Atlantic Canada and the Prairies.

There were no deals done in Saskatchewan or on P.E.I. Nova Scotia and Newfoundland and Labrador each reported four deals worth a total of $2 million, while New Brunswick logged six deals worth a total of $2 million.

Alberta was the outlier in seven provinces that comprise the second-tier of the Canadian VC market: it reported 11 deals worth $54 million.

Some 60 percent of the first-quarter VC investment in Canada went to Ontario, which had $504 million in deals.

Funders in Atlantic Canada are expecting good news and bad news for the rest of the year for the East Coast. The government-backed funding agencies, such as Innovacorp, New Brunswick Innovation Foundation, Concrete Ventures and Build Ventures, have capital and will be able to make investments, especially in their existing portfolios.

The deals that will be harder to close are the multi-million-dollar rounds that have driven the funding stats higher in recent years. These rely on national and international investment funds, which are harder to court during a travel ban and which have been battening down the hatches in the recession.

Still, deals have been done in the second quarter. Adaptiiv Medical Technologies, the Halifax company that uses 3D printing to improve radiation treatment for cancer patients, closed a round of $3.4 million in April.

In May, Fredericton-based automotive software company Potential Motors raised $2.5 million in a deal led by Halifax-based Build Ventures. The other funders included Brightspark Ventures and the New Brunswick Innovation Foundation.