Canadian VC hits 10-year low

Venture fundraising and deal activity continued to plummet in Canada in 2009. Private equity numbers slid too, but less precipitously.

Deal activity in the Canadian venture capital market continued its long decline last year to reach its lowest level since the mid 1990s, according to figures released by Canada’s Venture Capital & Private Equity Association (CVCA) and Thomson Reuters. Private equity deal activity was also reduced in 2009, though that industry has fared better than venture over the past three years.

VC firms invested just C$1 billion ($955 million; €700 million) in venture deals last year, down 27 percent from 2008. Companies financed came in at 331, or just 15 percent of the previous year's total. Amounts invested per company averaged C$3.1 million last year, as compared to C$3.5 million in 2008 and C$5.1 million in 2007.

The venture industry raised C$995 million in new commitments in 2009, as compared to C$1 billion committed during 2009. Fundraising levels continued to approximate levels recorded in the mid-1990s, the CVCA noted.

On the buyout side, there were 89 completed and pending transactions throughout 2009, 41 of which had disclosed values totaling C$2.6 billion. The total number of transactions was down 25 percent from 2008. Deal activity in Canada in 2009 was roughly comparable to that of 2005, the CVCA said.

Eight Canadian buyout funds raised a total of nearly C$2.1 billion in the year, led by Onex Partners III which raised just over C$1 billion in 2009.