VC & PE CANADIAN MARKET OVERVIEW // Q3 2018

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1 VC & PE CANADIAN MARKET OVERVIEW //

2 CONTENTS PARTICIPATING DATA CONTRIBUTORS...3 FOREWORD...4 VENTURE CAPITAL CANADIAN MARKET OVERVIEW...5 VENTURE CAPITAL HIGHLIGHTS... 6 VENTURE CAPITAL HEAT MAP... 7 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY... 8 VC ACTIVITY BY DEAL SIZE... 9 TOP 10 DISCLOSED CANADIAN VC DEALS TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES VC SECTOR BREAKDOWN VC STAGE BREAKDOWN VC EXITS TOP DISCLOSED VC EXITS MOST ACTIVE VC FIRMS // FUNDS PRIVATE EQUITY CANADIAN MARKET OVERVIEW PRIVATE EQUITY HIGHLIGHTS PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY PRIVATE EQUITY HEAT MAP // ALL PE DEALS QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY TOP 10 DISCLOSED CANADIAN PE DEALS PE ACTIVITY BY DEAL SIZE TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES PE SECTOR BREAKDOWN PE EXITS TOP 10 DISCLOSED CANADIAN PE EXITS MOST ACTIVE PE INVESTORS CVCA METHODOLOGY VENTURE CAPITAL PRIVATE EQUITY... 30, 31 AUTHORS, ABOUT CVCA AND CONTACT INFO VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 2

3 PARTICIPATING DATA CONTRIBUTORS CVCA thanks the following firms who participated in its survey. Venture Capital Firms Private Equity & LSVCC Firms Limited Partners Accelerate Fund Anges Québec Anges Québec Capital Amorchem Venture Fund AVAC Ltd. Avrio Ventures Management Corp Azure Capital Partners Brightspark Ventures Build Ventures CIBC Innovation Banking CIC Capital Ventures CTI Life Sciences Cycle Capital Management/ EcoFuel Difference Capital Emerald Technology Ventures Espresso Capital Ltd. Evok Innovations Fight Against Cancer Innovation Trust Freycinet Ventures Good News Ventures GreenSoil Investments igan Partners Information Venture Partners inovia Capital Island Capital Partners Lumira Ventures Luge Capital MaRS Catalyst Fund MaRS IAF McRock Capital Mistral VP New Brunswick Innovation Foundation Northumberland CFDC OMERS Ventures Panache Ventures Pangaea Ventures Pelorus Venture Capital Ltd. Plaza Ventures Quark Venture Real Ventures 5% of all VC deals and 22% of all PE deals had undisclosed amounts. Relay Ventures Renewal Funds Roadmap Capital Roar VC ScaleUP Ventures StandUp Ventures Tandem Expansion TandemLaunch TELUS Ventures Top Renergy Trellis Capital TVM Life Science Management Inc. V3-Ventures Vancouver Founders Fund Vanedge Capital Partners VentureLink Funds Versant Ventures Version One Ventures White Star Capital Whitecap Venture Partners Yaletown Partners 32 Degrees Capital AIP Private Capital ARC Financial Ardenton Capital Corporation ATB Capital Brookfield Asset Management Clairvest Group Inc. Clearspring Capital Partners First West Capital Founders Group of Food Companies Inc. Fulcrum Capital Partners GrowthWorks Capital Hawthorne Capital Inc. Highland West Capital Innovation Platform Capital InstarAGF Asset Management Ironbridge Equity Partners Killick Capital Inc. Lex Capital Management Mink Capital Mosaic Capital Corporation Novacap Management Inc. OMERS Private Equity Inc. Parallel 49 Equity Persistence Capital Partners PFM Capital Inc PRIVEQ Capital Funds Regimen Equity Partners Roynat Capital Inc. Seafort Capital Searchlight Capital Partners Swander Pace Capital TriWest Capital Partners Vistara Capital Partners Westcap Mgt. Ltd Western Investment Company of Canada Limited XPND Capital If you would like to have your firm included in future reports, please contact Alberta Teachers Retirement Fund (ATRF) BDC Capital Inc Bluesky Equities Ltd. Caisse de dépôt et placement du Québec (CDPQ) Dancap Private Equity Inc Desjardins Capital Fondaction CSN Fonds de solidarité FTQ Fonds de solidarité FTQ (Regional) Investissement Québec Kensington Capital Partners Limited Northleaf Capital Partners Ontario Teachers Pension Plan (OTPP) Teralys Capital VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 3

4 FORWARD Venture Capital s Two-Year Streak Slows in Q3; Private equity debt flourishing despite a slumping overall market The CVCA anticipates 2018 to close similarly to last year on the VC side; Four out of every 10 deals in the $10M average deal size categorized as private equity debt VENTURE CAPITAL $652M was invested over 127 deals in ; bringing the year-to-date total venture capital investment to $2.4B (12% lower than Q3 2017). While the quarter was slower than Q3 2017, the CVCA anticipates 2018 to close similarly to last year. The average deal size in Q3 was $5.1M; a 22% decrease from the previous quarter and 3% lower compared to the average deal size between 2013 to 2017 ($5.3M). YTD, the top 10 deals have totalled $724M; representing a 30% share of total dollars invested. There were two mega-deals ($50M+) in Q3, bringing the number of mega-deals so far in 2018 to nine totalling $0.7B. The two mega-deals in Q3 included Montreal-based Hopper Incorporated s $129M Series D, led by OMERS Ventures and included participation from BDC IT Venture Fund, Brightspark Ventures and Caisse de dépôt et placement du Québec and, Toronto-based Kira Systems with a $70M minority foreign investment. The Canadian venture capital ecosystem is thriving, said Darrell Pinto, Interim COO, Canadian Venture Capital and Private Equity Association. With the recent VCCI infusions into the industry, we are fully anticipating the year to close positively. Information and communication technology (ICT) companies pulled in 69% of total dollars invested YTD ($1.6B over 280 deals), with life sciences receiving 12% ($285M over 66 deals) and cleantech receiving 10% ($228M over 36 deals). There have been 20 YTD exits totalling $797M (in many of these transactions, investors did not disclose exit values). Strong corporate balance sheets and access to debt continued to drive the M&A markets and incentive behind the VC exit activity. The largest exit involved the acquisition of a BC Tweed joint venture by Canopy Growth for $347M with participation from Avrio Ventures Management Corporation. PRIVATE EQUITY $1.9B, the lowest amount since Q3 2013, was invested over 112 deals in, bringing the year-to-date total to $16.5B over 415 deals; a 24% decline from the $21.7B invested in the first three quarters last year. The demand from corporations for debt continued this quarter, with four out of every 10 deals in the $10M average deal size categorized as private equity debt. There were no mega-deals in. YTD, there have been two mega-deals totalling $10.1B; accounting for 61% of all private equity investment. The two mega-deals included the $5.1B recapitalization of Ontario-based GFL Environmental Incorporated by a consortium that included Ontario Teachers Pension Plan (OTPP), and the stake in Husky Injection Moulding Systems Limited sold by OMERS Private Equity to a U.S.-based PE firm via buyout for $5B. The private equity market continues to compete with an abundance of corporate debt, said Darrell Pinto, Interim COO, Canadian Venture Capital and Private Equity Association. The CVCA will continue to monitor all PE segments on our way through the balance of A little over one fifth of PE deals this year have been closed in the industrial and manufacturing sector. Information and communications technology (ICT) companies received the second largest share of PE deals flow, while both consumer and retail as well as the business products and services sectors pulled in a 10% share each. Of note, PE investment in the life sciences sector has already surpassed the total from last year ($440M over 34 deals). The pace of private equity exits slowed with only 61 exits four of which were IPOs (totalling $10.6B), compared to 2017 which saw 151 exits (totalling $11.3B). VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 4

5 VENTURE CAPITAL CANADIAN MARKET OVERVIEW // MAybe Background is this colour?

6 VENTURE CAPITAL HIGHLIGHTS // YTD Key Findings $652M was invested over 127 deals in the third quarter this year bringing the YTD total VC investment to $2.4B; 12% lower than the same period last year. The average deal size was $5.1M, a 22% decrease from the previous quarter and a 3% lower compared to the average deal size in the 5-year period between ($5.3M). The top 10 deals this year totalled $724M representing 30% share of total dollars invested Two additional $50M+ mega-deals in the third quarter brought the YTD tally to 9 mega-deals totalling $0.7B. These included: Montreal-based Hopper Incorporated closed a $129M Series D round led by OMERS Ventures and included BDC IT Venture Fund, Brightspark Ventures, and Caisse de dépôt et placement du Québec Toronto-Based Kira Systems and their $70M minority foreign VC investment Deals between $5M-$20M captured 36% of total dollars invested, a 7% point gain from its share last year. Ontario-based companies received 53% of investment ($1.3B), up from their 39% share last year. Quebec-based companies received 23% ($558M) followed by BC-based companies with an 15% ($363M) share. Toronto-based companies received almost half ($1.1B over 142 deals) of total dollars disbursed, with Montréal-based companies receiving 19% ($458M over 87 deals) and Vancouver-based companies a 14% share ($332M over 53 deals). ICT companies grabbed the lion s share (69%) of total dollars invested in the first three quarters of 2018 ($1.6B over 280 deals) with life sciences receiving a 12% share ($285M over 66 deals). Cleantech companies received a 10% share ($228M over 36 deals) There is an increased emphasis in YTD investment in later stage companies which received 50% ($1.2B) of total dollars compared to its 41% from last year. Early stage companies received a 41% ($969M) share investment, down from 52% in Strong corporate balance sheets and access to easy debt continued to drive M&A markets, which in turn is the driving force behind VC exits. There were 20 YTD exits totalling $797M (investors in many of these transactions did not disclose their exit values). The largest exit involved a cannabis operation. A BC Tweed joint venture was acquired by Canopy Growth for $374M. Avrio Ventures Management Corporation was involved in the transaction. VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 6

7 VENTURE CAPITAL HEAT MAP // YTD total $2.4b total # 483 deals $363M BC 60 $73M Alberta 21 $4M Saskatchewan $7M Manitoba 174 $1.3b Ontario $558m Québec $53M 10 New Brunswick $7M $1M Prince Edward Island $61M Nova Scotia Newfoundland & Labrador VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 7

8 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY $ Millions Invested # Deals $1, $1, $ $900 $800 $700 $600 $ $ $ $200 $100 $0 $358 Q1 $414 Q2 $691 Q3 $613 Q4 $432 Q1 $665 Q2 $621 Q3 $555 Q4 $960 Q1 $713 Q2 $690 Q3 $839 Q4 $634 Q1 $908 Q2 $1,158 Q3 $1,099 Q4 $697 Q1 $1,035 Q2 $652 Q TOTAL: 438 DEALS $2.1B TOTAL: 545 DEALS $2.3B TOTAL: 534 DEALS $3.2B TOTAL: 601 DEALS $3.8B TOTAL: 438 DEALS $2.4B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 8

9 VC ACTIVITY BY DEAL SIZE // YTD THREE-FOURTHS of all deals were under Total Deals $ Millions < $100K $100 - $500K $1 $20 $5m $500K - $1M 64 $42 $1M - $5M 146 $329 $5M - $20M 80 $858 $20M - $50M 14 $395 $50M + 10 $738 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 9

10 TOP 10 DISCLOSED CANADIAN VC DEALS // YTD company name province Disclosed VC Firm(s) sector stage $ mil HOPPER INC. QUÉBEC ACCOMPLICE, LLC, BDC IT VENTURE FUND., BRIGHTSPARK VENTURES, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), CITIC CAPITAL HOLDINGS LIMITED, INVESTISSEMENT QUÉBEC, OMERS VENTURES MANAGEMENT INC. ICT LATER STAGE VC $129 RITUAL ONTARIO GEORGIAN PARTNERS INC., GREYLOCK PARTNERS, INSIGHT VENTURE PARTNERS, MISTRAL VENTURE PARTNERS INC. ICT LATER STAGE VC $90 ECOBEE, INC. ONTARIO AMAZON.COM NV INVESTMENT HOLDING LLC, ENERGY IMPACT PARTNERS, RELAY VENTURES, THOMVEST VENTURES, INC. CLEANTECH LATER STAGE VC $80 TOUCHBISTRO INC. ONTARIO BDC IT VENTURE FUND., J.P. MORGAN PARTNERS, NAPIER PARK FINANCIAL PARTNERS, OMERS VENTURES MANAGEMENT INC., RELAY VENTURES ICT LATER STAGE VC $72 KIRA SYSTEMS ONTARIO INSIGHT VENTURE PARTNERS ICT EARLY STAGE VC $70 WEALTHSIMPLE FINANCIAL INC. ONTARIO POWER FINANCIAL CORPORATION ICT LATER STAGE VC $65 LEAGUE INC. ONTARIO BDC IT VENTURE FUND., OMERS VENTURES MANAGEMENT INC., QUANTUM VALLEY INVESTMENTS, RBC VENTURE PARTNERS, REAL VENTURES, TELUS VENTURES, WITTINGTON INVESTMENTS, LTD. OTHERS EARLY STAGE VC $62 BREATHER PRODUCTS INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), MENLO VENTURES, TEMASEK HOLDINGS (PRIVATE) LIMITED ICT LATER STAGE VC $59 Q4 WEB SYSTEMS INC. ONTARIO ESPRESSO CAPITAL LTD., INFORMATION VENTURE PARTNERS INC., NAPIER PARK FINANCIAL PARTNERS, OPENTEXT VENTURES, PLAZA VENTURES ICT EARLY STAGE VC $50 ECOBEE, INC. ONTARIO BUSINESS DEVELOPMENT BANK OF CANADA (BDC), CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CLEANTECH LATER STAGE VC $47 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 10

11 TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // YTD #1 toronto $1.1 B 142 DEALS Total Deals $ Millions 1. Toronto 142 $1, Montréal 87 $ Vancouver 53 $ Ottawa 15 $41 5. Calgary 15 $34 6. Fredericton 14 $49 7. Kitchener, Waterloo, Cambridge 12 $82 8. Halifax 9. St. John s (NF) $56 $ Québec 8 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 11

12 VC SECTOR BREAKDOWN // 2014-YTD $2,600 $2,400 $2,451 $ Millions Invested # Deals $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $ $1,342 $1,317 $1, $1, $ $721 $733 $ $ $208 $409 $228 $185 $ YTD YTD YTD YTD $177 $ $ $ $ ICT LIFE SCIENCES CLEANTECH AGRIBUSINESS VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 12

13 VC STAGE BREAKDOWN // 2014-YTD $ Millions Invested # Deals $2, $1, $1, $1, $1,400 $1,225 $1,050 $875 $ $525 $350 $175 $0 $136 $159 $212 $236 $216 $860 $1,210 $1,578 $1,992 $969 $1,068 $ $1,403 $1,558 $1, YTD YTD YTD SEED EARLY STAGE LATER STAGE VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 13

14 VC EXITS // 2014-YTD $ Millions Invested # Deals * Includes transactions with undisclosed values ** Market Cap at time of IPO/RTO $3,000 $2,700 $2,400 $2,100 $1, $1, $1, $900 $600 $300 $0 $503 $1,392 $582 $ $ YTD $1, $2,945 $2, YTD M&A* IPO/RTO** VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 14

15 TOP DISCLOSED VC EXITS // YTD- vc investors company sector exit transaction acquired by close date $ mil. AVRIO VENTURES MANAGEMENT CORP., INVESTECO CAPITAL BC TWEED JOINT VENTURE INC. LIFE SCIENCES M&A CANOPY GROWTH 7/18/2018 $374 TVM LIFE SCIENCE MANAGEMENT INC. AURKA PHARMA LIFE SCIENCES M&A ELI LILLY 5/14/2018 $141 TANDEM EXPANSION FUND, FONDS DE SOLIDARITÉ FTQ, INVESTISSEMENT QUÉBEC, BDC IT VENTURE FUND, PROPULSION VENTURES, FIER SUCCÈS, ACCÈS CAPITAL COVEO SOLUTIONS INC. ICT M&A EVERGREEN COAST CAPITAL 4/4/2018 $100 BDC IT VENTURE FUND, HYDE PARK VENTURES, ROUND 13 CAPITAL HUBDOC INC. ICT M&A XERO 7/31/2018 $91 There was 1 undisclosed exit over $50M in YTD 2018 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 15

16 MOST ACTIVE VC FIRMS / FUNDS // YTD # Rounds Size of Total Rounds* (Cdn$ mil) Real Ventures Desjardins Capital BDC Capital BDC Sector Funds** Panache Ventures $32 $92 $284 $329 $383 MOST ACTIVE PRIVATE INDEPENDENT FIRMS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) REAL VENTURES 46 $284 PANACHE VENTURES 21 $32 INOVIA CAPITAL INC. 20 $93 CYCLE CAPITAL MANAGEMENT/ECOFUEL 16 $95 YALETOWN PARTNERS INC 10 $103 IGAN PARTNERS INC. 10 $31 inovia Capital Inc. New Brunswick Innovation Foundation (NBIF) Cycle Capital Management/Ecofuel Fonds de solidarité FTQ $27 $93 $95 $80 PLAZA VENTURES 8 $92 RELAY VENTURES 7 $173 GOLDEN VENTURE PARTNERS 7 $60 SCALEUP VENTURES 7 $23 GOOD NEWS VENTURES 7 $19 MaRS IAF 14 $14 MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) DESJARDINS CAPITAL 36 $92 FONDS DE SOLIDARITÉ FTQ 14 $80 ANGES QUÉBEC CAPITAL 10 $44 WESTCAP MGT. LTD. 5 $11 OMERS VENTURES MANAGEMENT INC. 4 $272 * Total deal values - includes all participating investors MOST ACTIVE FIRMS IN VC DEBT DEALS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) ESPRESSO CAPITAL LTD. 45 $36 DESJARDINS CAPITAL 13 $3 TIMIA CAPITAL CORP 5 $5 CIBC INNOVATION BANKING 4 $67 BDC CAPITAL INC. 2 $2 FONDS DE SOLIDARITÉ FTQ 2 $1 ** BDC Healthcare Fund - 3 deal, $24M; BDC IT Venture Fund - 12 deals, $314M; BDC ICE Fund - 6 deals, $46M MOST ACTIVE GOVERNMENT FUNDS # ROUNDS SIZE OF TOTAL ROUNDS* (CDN$ MIL) BDC CAPITAL INC. 27 $329 NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 17 $27 MARS IAF 14 $14 BDC IT VENTURE FUND 12 $314 ANGES QUÉBEC 12 $64 INNOVACORP 9 $26 INVESTISSEMENT QUÉBEC 8 $193 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 16

17 PRIVATE EQUITY CANADIAN MARKET OVERVIEW //

18 PRIVATE EQUITY HIGHLIGHTS // YTD Key Findings Only $1.9B, the lowest amount since Q3 2013, was invested over 112 PE deals in Q bringing the 2018 YTD total to $16.5B over 415 deals, a 24% decline from the $21.7B invested in the first three quarters of Unlike the previous two quarters, there were no mega-deals in Q3. The two YTD mega-deals total $10.1B or 61% of PE investment and include: The $5.1B recapitalization of Ontario-based GFL Environmental Incorporated by an investor consortium that included Ontario Teachers Pension Plan (OTPP) PE investment in the life sciences sector ($440M invested over 34 deals) has already surpassed the total from last year ($382M over 34 deals). Corporate appetite for debt continued with four out of every 10 deals being PE debt, with the average deal size of $10M remaining unchanged from last year. The pace of PE exits slowed with only 61 exits (totalling $10.6B) compared to last year with 151 exits (totalling $11.3B). Of the 61 exits, four IPOs included: with four IPO exits: OMERS Private Equity selling its stake in Husky Injection Molding Systems Ltd. to a US PE firm via a $5B secondary buyout Deal activity in the small end of the market segment (deals less than $25M) garnered 68% of all deals, higher than last year s 60% share. Deals between $25M-$100M captured a 6% share of deals; down from the 11% last year. 17% (71 deals totalling $2B) of all PE deals went to Montréal-based companies, with Toronto-based companies receiving a 14% share (58 deals totalling $10.7B). A little over one fifth (23% or 95 deals) of PE deals this year have been closed in the industrial & manufacturing sector with ICT companies receiving the second largest share (15% or 63 deals). The consumer and retail sector as well as the business products and services sector garnered a 10% share of deal flow each (42 and 41 deals, respectively). BC-based Tilray completed its IPO on NASDAQ with a market cap of $2.1B. Quebec-based IPL Inc. backed by Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité (FTQ) and Investissement Québec, completed its IPO on TSX with a market cap of $709. Ontario-Based MAV Beauty Brands completed its IPO on TSX with a market cap of $571M. ONCAP-backed BC-based Pinnacle Renewable Energy Inc. completed its IPO on TSX with a market cap of $370M. VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 18

19 PRIVATE EQUITY HEAT MAP BUYOUT & ADD-ON DEALS ONLY // YTD total # 88 deals total $6.4 b $91M BC $186M Alberta $24m Saskatchewan $0M Manitoba 36 $5.4b Ontario $649m Québec 1 1 NA New Brunswick NA Nova Scotia VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 19

20 PRIVATE EQUITY HEAT MAP ALL PE DEALS // YTD total # 415 deals total $16.5b 27 $216m BC $647m Alberta 35 $48m Saskatchewan 12 6 $386M Manitoba 76 $11b Ontario 255 $4.4b Québec 1 1 NA New Brunswick 2 $2M Newfoundland and Labrador NA Nova Scotia VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 20

21 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY $ Millions Invested # Deals $25, $20,000 $15,000 $10, $5, $0 $6,277 Q1 $5,250 Q2 $7,804 Q3 $22,851 Q4 $7,053 Q1 $1,869 Q2 $11,375 Q3 $2,630 Q4 $3,221 $3,370 $3,068 $4,179 $5,329 $8,812 $7,554 $4,682 $6,945 $7,652 $1,924 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q TOTAL: 334 DEALS $42.2B TOTAL: 426 DEALS $22.9B TOTAL: 542 DEALS $13.8B TOTAL: 613 DEALS $26.4B TOTAL: 415 DEALS $16.5B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 21

22 TOP 10 DISCLOSED CANADIAN PE DEALS // YTD company name province firms involved in transaction sector $ mil GFL ENVIRONMENTAL INC. ONTARIO BC PARTNERS, HAWTHORN EQUITY PARTNERS, HIGHBRIDGE PRINCIPAL STRATEGIES, LLC, MACQUARIE RESOURCE CAPITAL CANADA LTD., ONTARIO TEACHERS' PENSION PLAN (OTPP) CLEANTECH $5,125 HUSKY INJECTION MOLDING SYSTEMS LTD ONTARIO BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC., PLATINUM EQUITY, LLC INDUSTRIAL & MANUFACTURING $4,964 STINGRAY DIGITAL GROUP INC. QUÉBEC CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ BUSINESS PRODUCTS & SERVICES $509 NAPEC INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ, OAKTREE CAPITAL GROUP, LLC BORALEX INC. QUÉBEC UPDATE DATA CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ FTQ INDUSTRIAL & MANUFACTURING $320 OIL & GAS, POWER $300 HÉROUX-DEVTEK INC. QUÉBEC FONDS DE SOLIDARITÉ FTQ INDUSTRIAL & MANUFACTURING $275 POINTCLICKCARE CORP. ONTARIO DRAGONEER INVESTMENT GROUP LIFE SCIENCES $187 ARTIS EXPLORATION LTD. ALBERTA WARBURG PINCUS LLC OIL & GAS, POWER $180 ESTRUXTURE QUÉBEC FENGATE CAPITAL MANAGEMENT LTD. ICT $180 ALTAGAS LTD. ALBERTA BIRCH HILL EQUITY PARTNERS MANAGEMENT INC. OIL & GAS, POWER $165 There were 4 undisclosed deals totalling $1.1B that were not included in this list VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 22

23 PE ACTIVITY BY DEAL SIZE // YTD $16,000 $14, $14, $12,800 $11, $10,910 $10, $9,600 $8,000 $6,400 $4,800 $3,200 $1,600 $0 $ $ $1,290 $1,499 $1,324 $2,804 $2, $2, $3, YTD YTD YTD $1, $6,093 $6, $3,212 $5,861 $3,282 $6,601 $4,797 $3, $7, $ YTD $4,782 $4,034 $3,250 $3, YTD $4, YTD < $25M $25M - $100M $100M - $500M $500M - $1B $1B - $2.5B $2.5B+ TOTAL: 1,310 DEALS $5.9B TOTAL: 252 DEALS $12.4B TOTAL: 115 DEALS $24.8B TOTAL: 33 DEALS $22.6B TOTAL: 15 DEALS $23B TOTAL: 6 DEALS $33B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 23

24 TOP 10 CANADIAN CITIES ADMINISTRATIVE CENTRES // YTD #1 montréal $2.0b 71 DEALS Total Deals $ Millions 1. Montreal 71 $2, Toronto 58 $10, Montérégie 33 $ Nord-du-Québec / Abitibi-Témis 24 $68 5. Calgary 23 $ Saguenay-Lac-St-Jean/Côte-Nord 21 $ Québec 20 $ Bas-Saint-Laurent 15 $50 9. Vancouver 10. Chaudière-Appalaches $125 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 24

25 PE SECTOR BREAKDOWN // YTD- # Deals $ Millions Industrial & Manufacturing 95 $5,967 ICT 63 $718 Consumer & Retail 42 $260 Business Products & Services Life Sciences $440 $1,378 most active sector industrial & manufacturing Mining & Resources Agri-Forestry $245 $ deals Oil & Gas, Power 21 $1,191 Automotive & Transportation 20 $390 Financial 19 $97 CleanTech 13 $5,234 Real Estate 5 $147 Others 4 $26 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 25

26 PE EXITS // YTD $ Millions Invested # Deals * includes transactions with undisclosed values ** IPO valuation $14,000 $12,000 $10,000 $8, $6, $4, $2,000 0 $8,055 $2, $1,711 1 $4,800 5 $3,710 4 $11,634 $12,944 $7,002 $3,073 $1,649 $ $2,161 7 $1,672 4 $3,408 8 $5, YTD YTD YTD IPO/RTO** M&A* SECONDARY BUYOUT* VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 26

27 TOP 10 DISCLOSED PE EXITS // YTD Husky Injection Molding Systems Ltd #1 bought by $4,964m Platinum Equity, LLC seller company name buyer $ mil BERKSHIRE PARTNERS LLC, OMERS PRIVATE EQUITY INC. HUSKY INJECTION MOLDING SYSTEMS LTD PLATINUM EQUITY, LLC $4,964 PERMIRA, FONDS DE SOLIDARITÉ, CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) ATRIUM INNOVATIONS INC. NESTLÉ S.A. $2,973 PRIVATEER HOLDINGS TILRAY NA - IPO ON NASDAQ $2,060 CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ) CAMSO MICHELIN $1,909 TORQUEST PARTNERS WSB TITAN GMS INC. $811 CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC (CDPQ), FONDS DE SOLIDARITÉ (FTQ), INVESTISSEMENT QUÉBEC, ONE51 PLC IPL INC. NA - IPO ON TSX $709 TA ASSOCIATES LLP MAV BEAUTY BRANDS NA - IPO ON TSX $571 ONCAP PINNACLE RENEWABLE ENERGY INC. NA - IPO ON TSX $370 WIND POINT PARTNERS DICOM TRANSPORTATION GROUP UK ROYAL MAIL $360 JOG CAPITAL CORP. MOUNT BASTION OIL & GAS CORP. SURGE ENERGY $320 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 27

28 MOST ACTIVE PE INVESTORS // YTD # Deals $ Millions* Fonds de solidarité FTQ 127 $2,986 BDC Capital Inc. 105 $213 Desjardins Capital Investissement Québec $772 $1,201 Fonds de solidarité FTQ most active 127 DEALS PE FIRM Caisse de dépôt et placement du Québec (CDPQ) 27 $1801 Fondaction CSN 19 $197 PFM Capital Inc. 11 $174 First West Capital 7 $52 Westcap Mgt. Ltd. 6 $67 Ontario Teachers' Pension Plan (OTPP) 5 $5, Degrees Capital 5 $40 * Total deal values includes all participating investors VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 28

29 CVCA METHODOLOGY // VENTURE CAPITAL VENTURE CAPITAL DATA: Verified completed equity or quasi-equity venture capital deals only (non-equity or project-based government funding, pharmaceutical development deals, senior debt, venture capital-backed acquisitions, and angel financing are not included) vc development stages SEED STAGE EARLY STAGE LATER STAGE COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL. COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE. PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE. vc sectors ICT LIFE SCIENCES CLEANTECH AGRIBUSINESS COMPANY HAS A CONCEPT OR PRODUCT UNDER DEVELOPMENT, BUT IS PROBABLY NOT FULLY OPERATIONAL. COMPANY HAS A PRODUCT OR SERVICE IN TESTING OR PILOT PRODUCTION. IN SOME CASES, THE PRODUCT MAY BE COMMERCIALLY AVAILABLE. PRODUCT OR SERVICE IN PRODUCTION AND COMMERCIALLY AVAILABLE. COMPANY IS GENERATING ON-GOING REVENUE, BUT NOT NECESSARILY, PROFITABLE. TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 29

30 CVCA METHODOLOGY // PRIVATE EQUITY PRIVATE EQUITY DATA: Dataset includes only completed private equity deals (announced but yet to be completed deals are not included) pe deal type BUYOUT GROWTH ADD-ON DEBT INFRASTRUCTURE INVESTMENT FOR THE CONTROL OF A PORTFOLIO COMPANY, INCLUDING PLATFORM CREATION, SECONDARY BUYOUT SIGNIFICANT MINORITY INVESTMENT INTO A PORTFOLIO COMPANY, THROUGH NEW CAPITAL INFUSION AND RECAPITALIZATION CORPORATE ACQUISITIONS BY MAJORITY CONTROLLED PE BACKED PORTFOLIO COMPANIES DEBT INVESTMENT INTO PORTFOLIO COMPANIES INVESTMENTS INTO DEVELOPMENT AND MANAGEMENT OF INFRASTRUCTURE ASSETS BUT PE DOES NOT OWN THE UNDERLYING ASSETS pe sectors AGRI-FORESTRY AUTOMOTIVE & TRANSPORTATION BUSINESS PRODUCTS & SERVICES CLEANTECH AGRICULTURE, FOODS AND FORESTRY TRANSPORTATION, LOGISTICS AND RELATED SERVICES BUSINESS PRODUCTS AND SERVICES ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 30

31 CVCA METHODOLOGY // PRIVATE EQUITY // YTD continued pe sectors CONSUMER & RETAIL FINANCIAL ICT INDUSTRIAL & MANUFACTURING LIFE SCIENCES MINING & RESOURCES OIL & GAS, POWER REAL ESTATE CONSUMER PRODUCTS AND SERVICES, BRICK AND MORTAR RETAIL FINANCIAL SERVICES COMPUTER HARDWARE/SOFTWARE & SERVICES, INTERNET SOFTWARE & SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE & TELECOM AND SERVICES EQUIPMENT AND MATERIAL MANUFACTURING BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES NON OIL AND GAS NATURAL RESOURCES OIL & GAS, POWER AND UTILITIES PROPERTY DEVELOPMENT AND MANAGEMENT VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // YTD 31

32 ABOUT AND CONTACT To obtain estimates for additional custom InfoBase data reports please contact DARRELL PINTO Research Director Authors Darrell oversees all data related to Canadian private capital investments, exit and fundraising activities for the CVCA. Darrell has held senior positions at several global organizations including the Toronto Stock Exchange, Institutional Limited Partners Association, Thomson Reuters, Glaxosmithkline and the Interac Association. In between these, he also started his own successful management consulting company. He has worked in New York, London and Shanghai, but Toronto remains his favourite working city. He brings to the CVCA a passion for telling compelling stories with data. Darrell is currently on the board of a non-profit social housing in Peel, a member of Volunteer Toronto as well as an active volunteer with Woodgreen Community Services. He holds a BA in Philosophy/History from the University of Western Ontario and an MBA from the Rotman School of Management. DAVID KORNACKI Research Analyst David executes research on venture capital and private equity deals within Canada. David is responsible for monitoring industry activity and maintaining the CVCA s Infobase by entering data, including investments, exits, deals and fundraising activities on a daily basis. David holds a BA in Philosophy and Psychology from the University of Toronto. dkornacki@cvca.ca ext. 202 dpinto@cvca.ca ext. 208 CAROLYN GOARD Senior Manager, Communications Carolyn oversees all of the CVCA s communications and marketing efforts, which includes managing the Association s brand, coordinating media outreach programs, and managing the development of all online content and social media engagements. Carolyn also brings with her a background in journalism, and is keen on positioning the CVCA as the industry thought leader for all things private capital through informative and engaging content. Carolyn has a BA in Popular Culture and Communications from Brock University, a diploma in Journalism from Niagara College Canada, and an interdisciplinary Master of Arts degree in Communication Studies from Brock University. cgoard@cvca.ca ext. 204 About CVCA We re how collaboration happens and how innovation and growth thrive. The CVCA is Canada s professional association for the venture capital and private equity industry. Our services and support establish a favourable and competitive ecosystem and lay the foundation for greater collaboration, innovation, growth and market intelligence. We strongly advocate for fair and competitive policy to keep our industry energized and future-ready. From coast to coast, we bring members together; connecting private capital professionals to each other generating meaningful partnerships, enabling connections to foster and knowledge to prosper. We re also the nation s ultimate resource for data on Canadian private capital investments. Please visit CVCA CVCA - Canadian Venture Capital and Private Equity Association 372 Bay St., Suite 1201 Toronto, ON M5H 2W9