Montreal raises most startup funding of any Canadian city in 2017

PwC Canada and CB Insights have released their MoneyTree report analyzing Canadian VC activity for 2017. And in a year where Canadian companies raised $4.4 billion CAD total, Montreal came out on top, raising more funds than any other city in Canada.

The report paints a yearlong picture of the country’s startup landscape, with results from Q4 as well as the previous three quarters. While the report found that the number of seed stage investments are declining across the country—which could be interpreted as a sign that Canadian companies are finding their product-market fit—Montreal actually saw a 64% increase from 2016.

Toronto came in at number one for the number of deals (115, down from 126 in 2016), but Montreal actually raised more money—our city saw $800 million USD invested across 63 deals in 2017 (up from 60 in 2016) while Toronto raised $779 million USD.

That impressive number is thanks in no small part to Lightspeed’s US$166 million Series D funding round last October.The company’s last round raised was US$61 million in 2015. This latest investment round brings the total amount raised to date up to US$292 million.

While no specific valuation has been disclosed, a source for the Wall Street Journal, this latest round of financing will give Lightspeed a valuation near CAD$1 billion, making it close to becoming that rarest of breeds: a tech unicorn, or narwhal in Canada.

“We are hoping to be IPO-ready by mid-2019,” Dax Dasilva, Founder and CEO of Lightspeed said at the time.

The impressive amount of funding in Montreal is also due to its ascension as a globally recognized AI hub within the past few years.

Element AI, the Montreal-based artificial intelligence (AI) powerhouse, announced in June that it raised $137.5 million ($102 million USD) in  Series A funding, the largest in history for an AI company.

The announcement from Facebook in September that McGill professor Dr. Joelle Pineau would be leading Facebook’s fourth Artificial Intelligence Research Lab (FAIR) (and first research and development investment in Canada) set off a domino effect of similar announcements.

Soon after, Samsung disclosed they’d had a new AI lab at the Université de Montréal up and running since August.

Stradigi followed suit in October, announcing they’d launched Stradigi Labs, an applied research center focused on developing innovative AI solutions in high-growth markets such as medical and healthcare, sports and social platforms and led by an astrophysicist. A week later, Google’s DeepMind opened their second international AI research lab in Montreal, just months after opening their first Canadian lab in Edmonton.

And in November, BMO and RBC invested $4 million into Montreal’s Creative Destruction Lab (CDL), and RBC Borealis AI opened a lab with McGill professor Jackie Cheung acting as advisor.

LeddarTech, a Quebec City-based maker of laser-sensor technology used in self-driving cars, raised almost $130 million (US$101 million) in a Series C round. Strategic investor Osram led. It was joined by Delphi, Magneti Marelli, IDT and Fonds de solidarité FTQ. The company’s other backers include BDC Capital and Go Capital.

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