Top Canadian VC deals raise $1 billion in 2017, hit 16-year high


2017 was huge for Canada’s Venture Capital market, and even more so for deals in Montreal.

This year’s milestones include the largest financing of a local IT company in 25 years (Lightspeed’s latest US$166 million round values it close to the rarest of breeds, a narwhal), the largest round on record for an artificial intelligence startup (ElementAI raises historic $137.5 million Series A round), and strategic funding of a top maker of laser sensors used in self-driving cars (Quebec company LaddarTech raises almost $130 million Series C).

These funding announcements rank among Canada’s top 10 venture capital financings last year, which together raised more than $1 billion from investors. Those numbers come from preliminary data from Thomson Reuters which points to a second consecutive year of historic round sizes.

Financings sized above $20 million secured $2.3 billion last year, the highest amount since 2000, while financings above $50 million took $1.5 billion, the highest ever.

The resulting cash flow into Canadian tech sectors hit $3.8 billion last year, beating out the $4.6 billion invested in 2016 by 5 percent. If the statistic holds in Thomson Reuters’ final data cut, 2017 will mark a 16 year high in VC invested, and the sixth straight year of domestic market growth.

IT companies attracted $2.3 billion last year, the largest amount invested since the dot.com era, while life-sciences companies took more than $1 billion, which is on par with 2016’s record deployment.

Without further ado, here are the top 10 Canadian VC deals in 2017:

1. Lightspeed (Montreal)

Lightspeed POS, Montreal’s point-of-sale (POS) system for retailers and restaurants, raised a US$166 million Series D.

Led by an investment of $170 million from la Caisse de dépôt et placement du Québec (la Caisse), Investissement Québec (IQ), iNovia Capital, and Silicon Valley Bank also provided funding.

“The retail and restaurant industries now require businesses to deliver a greater and more unique experience to thrive,” said Dax Dasilva, Founder and CEO of Lightspeed. “Lightspeed is leading the digital transformation with our powerful, easy-to-use platform, which enables your favourite local businesses to increase revenue, continue to innovate, and ultimately deliver an extraordinary shopping or dining experience.”

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

2. Element AI (Montreal)

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

The round was led by Data Collective (DCVC) with further investments from Real Ventures, Development Bank of Canada (BDC), Fidelity Investments Canada, Hanwha Investment, Intel Capital, Microsoft Ventures, National Bank of Canada, NVIDIA, Tencent, and several of the world’s largest sovereign wealth funds.

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The funding will allow Element AI to invest in large-scale AI projects internationally, solidifying its position as the largest global AI company in Canada and creating 250 jobs in the Canadian high tech sector by January 2018.

Co-founded by serial entrepreneurs Jean-François Gagné and Nicolas Chapados, Real Ventures and Yoshua Bengio, a co-father of deep learning technology, Element AI aims to bring academic AI innovation to global organizations. Started in October 2016 to empower industry with the massive scale of academic AI innovation Bengio was driving at the world-leading Montreal Institute of Learning Algorithms (MILA), the two groups pioneered a unique, non-exploitative model of academic cooperation they have since replicated at many other institutes.

3. LaddarTech (Quebec City)

LeddarTech, a 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.

4. PointClickCare Technologies (Toronto)

Healthcare-software company PointClickCare Technologies decided early in 2017 to postpone an initial public offering and instead raise about $111 million (US$85 million). The follow-on deal was led by Dragoneer Investment Group with participation from JMI Equity, which has backed PointClickCare since 2011.

5. Repare Therapeutics (Montreal)

Montreal and Boston-based Repare Therapeutics, a developer of drugs that treat cancer, raised $68 million in Series A financing.

Founding investor Versant Ventures co-led the round with MPM Capital. They were joined by other syndicate investors including a US $8.75 million investment from the Fonds de solidarité FTQ, and further investments from Celgene Switzerland, an affiliate of Celgene Corporation, and BDC Capital’s Healthcare Venture Fund.

With this financing, Repare, founded by Versant Ventures, emerges from Versant’s Discovery Engines after an 18 month stealth period. During that time, the company advanced its leading CRISPR-enabled synthetic lethality drug discovery platform, identified several promising oncology targets and moved multiple programs into preclinical development.

6. eStructure Data Centers (Montreal)

Launched in mid-2017, eStruxture Data Centers took initial funding led by Canderel and Caisse de dépôt et placement du Québec. The deal provided the network and cloud-neutral data centre operator with $80 million, used in part to buy the Montreal Gazette’s former printing facilities, with plans to convert it into a data centre with 30 megawatts of power capacity.

7. Vision Critical (Vancouver)

W Capital Partners and Georgian Partners acquired shares from early investors in Vision Critical, a customer intelligence software platform. The secondary deal had a reported value of $76 million. Vision Critical’s other backers include Difference Capital Financial, Kensington Capital Partners, Northleaf Capital Partners, OMERS Ventures, TELUS Ventures and Wellington Financial.

8. Wealthsimple (Toronto)

Online investment manager Wealthsimple accounted for $70 million in two funding events. Early in 2017, it secured $20 million from Power Corp’s Portag3 Ventures, the company’s majority shareholder. Several months later, Portag3 followed up with a $50 million Series B investment. Wealthsimple is also backed by Impression Ventures.

9. Milestone Pharmaceuticals (Montreal)

Milestone Pharmaceuticals Montreal, Canada, Inc., completed a $68 million Series C round of financing to advance the company’s lead product etripamil, a fast-acting nasal spray used by patients to terminate paroxysmal supraventricular tachycardia (PSVT) episodes wherever and whenever they occur.

The round, which brings Milestone’s total funding to more than $100 million, was led by Denmark’s Novo Holdings A/S, and included new investors Forbion Capital Partners and funds managed by Tekla Capital Management, with significant participation from Milestone’s existing investors Domain AssociatesFonds de solidarité FTQBDC CapitalPappas Capital, and GO Capital.

Milestone Pharmaceuticals is a clinical-stage cardiovascular company founded in 2005 with headquarters in Montreal and a US subsidiary in Charlotte, NC. The funding will be used to advance etripamil into Phase 3 developtwment including the execution of pivotal and supportive clinical trials, the production of clinical and commercial supplies and pre-launch commercialization activities.

10. Visier (Vancouver)

Visier, a workplace-intelligence-solutions provider, raised about $60 million (US$45 million) in a Series D financing. Sorenson Capital led the round. It was joined by Foundation Capital, Summit Partners and Adams Street Partners, all of which invested in the company’s Series C in 2014.

In case you weren’t counting, that’s a total of 6 of the top 10 biggest Canadian VC deals that originated in the province of Quebec. If the upward trend of the past two years is anything to go on, 2018 should be another big year for Montreal and Quebec VC investment.


Photo by Jakub Gorajek on Unsplash

 

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