VC & PE CANADIAN MARKET OVERVIEW // H1 2017

Transcription

1 VC & PE CANADIAN MARKET OVERVIEW // H1 2017

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 DISCLOSED CANADIAN VC DEALS...10 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 DISCLOSED CANADIAN PE DEALS PE ACTIVITY BY DEAL SIZE TOP CANADIAN CITIES // ADMINISTRATIVE CENTRES PE SECTOR BREAKDOWN PE EXITS TOP 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 // H

3 PARTICIPATING DATA CONTRIBUTORS If you would like to have your firm included in future reports, please contact either or CVCA thanks the following firms who participated in its Q survey. PARTICIPATING LIMITED PARTNERS Alberta Teachers Retirement Fund (ATRF) BDC Capital Inc Caisse de dépôt et placement du Québec (CDPQ) Capital Régional et Coopératif Desjardins Dancap Private Equity Inc Fondaction CSN Fonds de solidarité FTQ Fonds de solidarité FTQ (Regional) Investissement Quebec Kensington Capital Partners Limited Northleaf Capital Partners Ontario Teachers Pension Plan (OTPP) Teralys Capital 32 Degrees Capital Parallel 49 Equity AIP Private Capital Altas Partners LP Arc Financial ATB Capital Birch Hill Equity Partners Brookfield Asset Management Carpedia Capital Clairvest Group Inc. First West Capital Fulcrum Capital Partners Pender West Capital Partners Persistence Capital Partners PFM Capital Inc Pillarfour Capital PRIVEQ Capital Funds Regimen Equity Partners Roynat Capital Inc. Seacliff Group Seafort Capital Searchlight Capital Partners GrowthWorks Atlantic Venture Fund Ltd. Stratgem Innovative Capital Partners Growthworks Working Opportunity Fund (EVCC) Ltd. Hawthorne Capital Inc. Highland West Capital InstarAGF Asset Management Ironbridge Equity Partners Lex Capital Management m2s Capital Mink Capital Mosaic Capital Corporation Novacap Management Inc. OMERS Private Equity Inc. PARTICIPATING PRIVATE EQUITY FIRMS Swander Pace Capital Tera Capital Corporation TorQuest Partners Tricor Pacific Founders Capital TriWest Capital VERTU Capital Vistara Capital Partners Waterton Global Resource Management Inc. Westcap Mgt. Ltd XPND Capital PARTICIPATING VENTURE CAPITAL FIRMS 500 Startups Canada Mars Innovation Amorchem Venture Fund McRock Capital Arctern Ventures New Brunswick Innovation Foundation AVAC Ltd. Northhumberland CFDC Avrio Ventures Management Corp OMERS Ventures Azure Capital Partners Pangaea Ventures Brightspark Ventures Pelorus Venture Capital Ltd. Build Ventures Plaza Ventures Chrysalix Venture Capital Quark Venture CTI Life Sciences Real Ventures Cycle Capital Management Relay Ventures Difference Capital Roadmap Capital Espresso Capital ScaleUP Ventures Eventi Capital Partners Summerhill Ventures Partners Evok Innovations Tactex Asset Management Inc. Ferst Capital Tandem Expansion Fight Against Cancer Innovation Trust TandemLaunch Freycinet Ventures Top Renergy Georgian Partners Trellis Capital Green Century Investment TVM Life Science Management Inc. GreenSoil Investments Vancouver Founders Fund igan Partners Vanedge Capital Partners Impression Ventures VentureLink Funds Information Venture Partners Versant Ventures Innovacorp Wellington Financial inovia Capital White Star Capital Investeco Capital Corp Whitecap Venture Partners MaRS Catalyst Fund Yaletown MaRS IAF VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

4 FOREWORD Strong VC Investment Pace Continues with Revival in Exits After Long Hiatus; Huge Quarter for PE and a Breakout Year for Exits VC investment sees $1.6B invested over 260 deals with 21 exits totaling $900M in the first half of PE investment sees $13.9B invested over 277 deals with 80 exits in H1 2017; already exceeding the number of exits in each of the last four years VENTURE CAPITAL Venture capital investment in Canada saw a huge year in 2016; particularly in the first half, when $1.7B was invested across 275 deals. VC activity in H indicates the ecosystem is on pace to see another remarkable year for VC investment. Starting off strong in Q with $713M invested, Q2 saw 28% spike in activity with $913M invested over 131 deals. With $1.6B invested over 260 deals in the first half of 2017, VC investment and activity in Canada is indicating numbers will meet or exceed last year s extraordinary performance. Of note, the VC market in Canada has seen a healthy reappearance of exits in the first two quarters of 2017 with 21 exits totaling $900M compared to 32 exits totaling $584M last year. So far, the largest exit in 2017 was the $393M acquisition of Montreal-based Luxury Retreats International by Airbnb. There were two VC-backed IPOs signalling a rebound of the IPO market through the first half of the year: Real Matters Inc. (TSE: REAL) and Zymeworks Inc. (TSE/NYSE: ZYME). Accounting for a huge 68% of all VC deals in H1 2017, the information and communications technology (ICT) sector saw the biggest share of total VC dollars with $1.1B invested across 158 deals. Life science companies received the second highest VC investment in the first half of 2017 with $344M over 52 deals (21% of total invested), while cleantech placed third with $84M over 18 deals (5% total invested). Ontario-based companies received $620M in VC dollars invested in H1, 38% of total VC investment. Quebec received roughly a third at $544M, while British Columbia investment accounted for a quarter of all dollars invested at $410M. PRIVATE EQUITY Canadian private equity has seen a major bounce-back in the first half of 2017, with $13.9B invested across 277 deals already surpassing the $13.8B invested in all of A staggering $8.9B was invested over 170 deals in the second quarter of 2017, which is 79% higher than the $5B invested in Q1, and an astounding 164% greater than Q In fact, Q investment is the highest quarter since Q when $11.4B was invested. In H1 2017, PE saw 80 exits, exceeding the number of exits in each of the last four years. There were 61 exits in 2016, 66 in 2015, 66 in 2014 and 75 in The 80 exits in H includes the $2.2B exit from Montreal-based Garda World Securities, sold to Rhone Capital by Apax Partners, and two IPOs: the $445M dual listing of the iconic Canada Goose (TSE/NYSE: GOOS) as well as the $100M debut of STEP Energy Services Ltd. (TSE: STEP). The oil, gas and power sector once a thriving sector for PE investment has seen a consistent quarter-over-quarter slowdown, capturing only a stark 9% of all PE deals in the first half of 2017 a 19% drop from Conversely, Canada is seeing a steadily increasing pick-up in PE investment in both the industrial and manufacturing sector and the information and communications technology sector (ICT). In fact, more than 23% of all PE deals in H were in the industrial and manufacturing sector, compared to only a 14% share in Additionally, ICT companies captured 17% of PE deals in H1, compared to a 10% share in VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

5 VENTURE CAPITAL CANADIAN MARKET OVERVIEW // H VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

6 VENTURE CAPITAL HIGHLIGHTS // H Key Findings: Strong pace of VC investment continues with $913M invested in 131 deals in Q a solid 28% increase in dollars invested compared to both the previous quarter ($713M) as well as the same quarter last year ($712M) This brings the total invested in the first half of 2017 to $1.6B over 260 deals which is almost equal to the $1.7B over 275 deals during the same time last year Comparatively, mega deals accounted for 31% of total dollars invested in 2016, and only 15% in 2015, 16% in 2014 and 23% in $620M or 38% of dollars invested this year were in Ontariobased companies with another third ($544M) going to Quebec-based companies and a quarter ($410M) to BCbased companies The average deal size in Q2 spiked to $7.0M, up 26% from the previous quarter ($5.5M). This is also a high-water mark compared to the average deal sizes in 2013 ($5.2M), 2014 ($4.7M), 2015 ($4.2M) and 2016 ($6.0M) ICT companies grabbed the lion s share (68%) of total dollars invested in the first half of 2017 ($1.1B over 158 deals); this compares to a 61% share in 2016, 58% in 2015, 64% in 2014 and 56% in 2013 The top 10 VC deals accounted for $540M or 59% of total dollars disbursed in Q2 just slightly higher than the 56% share of total dollars disbursed in both Q ($410M out of $713M) and Q ($400M out of $712M) Montreal-based Element AI raised a record series A round of $141M from a syndicate of investors that included CVCA members Real Ventures and BDC Capital Mega deals ($50M+ deal size) included 8 deals totaling $582M or 36% of total dollars invested in the first half of The market for exits has seen a healthy return in 2017; so far there have been 21 exits totaling $900M compared to 32 exits totaling $584M last year The largest exit was the $393M acquisition of Montrealbased Luxury Retreats International by Airbnb; investors included CVCA members inovia Capital and Teralys Capital After a long hiatus, there were 2 VC-backed IPOs: Real Matters Inc. on TSX and Zymeworks Inc. on both the TSX/NYSE VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

7 VENTURE CAPITAL HEAT MAP // H total $1.6b total # 260 deals $1M Newfoundland & Labrador $410M BC $9M Alberta $6M Saskatchewan 7 $5M Manitoba 113 $620M Ontario $544m Québec 15 8 $8M New Brunswick $23M Nova Scotia VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

8 QUARTER-OVER-QUARTER VC INVESTMENT ACTIVITY // 2013-H $ Millions Invested # Deals $ $ $800 $700 $600 $500 $400 $ $ $100 $0 $414 Q1 $339 Q2 $601 Q3 $540 Q4 $358 Q1 $414 Q2 $654 Q3 $613 Q4 $419 Q1 $665 Q2 $621 Q3 $585 Q4 $956 Q1 $712 Q2 $683 Q3 $841 Q4 $713 Q1 $913 Q TOTAL: 365 DEALS $1.9B TOTAL: 436 DEALS $2.0B TOTAL: 545 DEALS $2.3B TOTAL: 535 DEALS $3.2B TOTAL: 260 DEALS $1.6B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

9 VC ACTIVITY BY DEAL SIZE // H Mega-deals dominated by the Total Deals $ Millions ($141M) < $100K 16 $1 deal in quebec-based $100 - $500K 44 $11 element ai inc. $500K - $1M 30 $20 $1M - $5M 80 $194 $5M - $20M 50 $513 $20M - $50M 9 $304 $50M + 8 $582 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

10 TOP DISCLOSED CANADIAN VC DEALS // H COMPANY PROVINCE DISCLOSED VC FIRM(S) SECTOR STAGE $ MIL. ELEMENT AI INC. QUÉBEC BDC CAPITAL INC., DATA COLLECTIVE, FMR LLC (FIDELITY), HANWHA INVESTMENT CORP, INTEL CAPITAL, MICROSOFT VENTURES, NATIONAL BANK OF CANADA, NVIDIA CORPORATION, REAL VENTURES ICT EARLY STAGE VC $141 REPARE THERAPEUTICS INC. QUÉBEC VERSANT VENTURE MANAGEMENT, LLC, MPM CAPITAL, BDC CAPITAL INC., CELGENE EUROPEAN INVESTMENT CO. LLC, FONDS DE SOLIDARITÉ FTQ, FONDS RÉGIONAUX DE SOLIDARITÉ FTQ LIFE SCIENCES EARLY STAGE VC $91 VISION CRITICAL COMMUNICATIONS INC. BC GEORGIAN PARTNERS INC., W CAPITAL PARTNERS ICT SECONDARY VC $76 VISIER INC. BC ADAMS STREET PARTNERS, LLC, FOUNDATION CAPITAL, SORENSON CAPITAL PARTNERS, SUMMIT PARTNERS ICT LATER STAGE VC $61 FRESHBOOKS ONTARIO ACCOMPLICE, LLC, GEORGIAN PARTNERS INC., OAK INVESTMENT PARTNERS ICT EARLY STAGE VC $57 AURINIA PHARMACEUTICALS INC. BC ILJIN LIFE SCIENCE CO. LTD., LUMIRA CAPITAL INVESTMENT MANAGEMENT INC. LIFE SCIENCES PIPE $53* BREATHER PRODUCTS INC. QUÉBEC MENLO VENTURES, RRE VENTURES, SLOW VENTURES, VALAR VENTURES MANAGEMENT LLC ICT LATER STAGE VC $53 WEALTHSIMPLE FINANCIAL INC. ONTARIO POWER FINANCIAL CORPORATION ICT EARLY STAGE VC $50 D-WAVE SYSTEMS INC. BC PUBLIC SECTOR PENSION INVESTMENT BOARD ICT VENTURE DEBT VC $41 INOCUCOR TECHNOLOGIES INC. QUÉBEC CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS, CLOSED LOOP CAPITAL, CYCLE CAPITAL MANAGEMENT (CCM), TPG CAPITAL LP AGRIBUSINESS EARLY STAGE VC $39 * RESTATED FROM Q1 TO REFLECT ONLY THE VC PARTICIPATION IN THE PIPE NOTE: THERE WERE 2 H1 DEALS THAT WERE EXCLUDED FROM THIS LIST BECAUSE THEY WERE UNDISCLOSED VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

11 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES //H #1 toronto $415M 74 DEALS Total Deals $ Millions 1. Toronto 2. Montréal 3. Vancouver $323 $356 $ Kitchener, Waterloo, Cambridge 5. Ottawa $49 $64 6. Fredericton 11 $5 7. Saskatoon 8. Halifax 9. Estrie 10. Laval $6 $15 $17 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

12 VC SECTOR BREAKDOWN // 2013-H $ Millions Invested # Deals $2,000 $1, $1,800 $1,600 $1,400 $1,200 $1, $1, $1,335 $1, $1, $ $721 $ $600 $400 $200 $0 $ $ $ $394 $177 $138 $ $ $14 14 $27 20 $42 $185 $ H H H H ICT Life Sciences CleanTech AgriBusiness VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

13 VC STAGE BREAKDOWN // 2013-H $ Millions Invested # Deals $1,600 $1,440 $1, $1, $ $800 $640 $480 $ $160 $85 $135 $159 $214 $91 $657 $824 $1,210 $1,558 $955 $1,139 $1,068 $893 $1,411 $ $ H H H Seed Early Stage Later Stage VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

14 VC EXITS * // 2013-H $ Millions Invested # Deals $1, $1,440 $1,280 $1, $960 $ $ $480 $320 $160 $0 $665 $503 $1,392 $584 $ $129 6 $346 4 $ H H H $244 $117 $ $ M&A IPO** RTO * ** INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES; IPO VALUATION VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

15 TOP DISCLOSED VC EXITS // H VC INVESTORS COMPANY SECTOR EXIT TRANSACTION ACQUIRED BY $ MIL. INOVIA CAPITAL, TERALYS CAPITAL, CLARIDGE, INTERMEDIA PARTNERS, GROUPE DYNAMITE LUXURY RETREATS INTERNATIONAL INC. ICT M&A AIRBNB $393 KENSINGTON CAPITAL, WHITECAP VENTURE PARTNERS, RADAR CAPITAL, WELLINGTON FINANCIAL REAL MATTERS INC. ICT IPO NA $157 FONDS DE SOLIDARITÉ FTQ, RHO CANADA VENTURES, SUMMIT PARTNERS, SKYPOINT CAPITAL CORPORATION ACCEDIAN NETWORKS INC. ICT M&A BRIDGE GROWTH PARTNERS $133 BDC CAPITAL, LUMIRA CAPITAL, CTI CAPITAL ZYMEWORKS INC. LIFE SCIENCES IPO NA $87 KENSINGTON CAPITAL, NORTHLEAF CAPITAL, RECAPHEALTH VENTURES, DIFFERENCE CAPITAL, OMERS VENTURES, TELUS VENTURES, WELLINGTON FINANCIAL VISION CRITICAL COMMUNICATIONS INC. ICT SECONDARY SALE GEORGIAN PARTNERS, W CAPITAL $76 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

16 MOST ACTIVE VC FIRMS // FUNDS // H ** BDC HEALTHCARE FUND - 5 DEALS TOTALING $188M*; BDC IT VENTURE FUND - 5 DEALS TOTALING $90M*; BDC ICE FUND - 4 DEALS TOTALING $61M* Total Deals $ Millions* Espresso Capital Partners 500 Startups Real Ventures Capital Régional et Coopératif Desjardins BDC Capital BDC Sector Funds** New Brunswick Innovation Foundation (NBIF) MaRS IAF Fonds de solidarité FTQ inovia Capital Inc. Cycle Capital Management (CCM) $19 $11 $30 $7 $21 $81 $110 $98 $216 $312 $340 * MOST ACTIVE PRIVATE INDEPENDENT FIRMS # DEALS $ MIL.* ESPRESSO CAPITAL PARTNERS 31 $ STARTUPS 26 $11 REAL VENTURES 21 $312 INOVIA CAPITAL INC. 8 $110 CYCLE CAPITAL MANAGEMENT (CCM) 8 $98 RELAY VENTURES 7 $57 IGAN PARTNERS INC. 7 $22 TOTAL DEAL VALUES - INCLUDES ALL PARTICIPATING INVESTORS MOST ACTIVE PENSION, RETAIL, CORPORATE & OTHER PUBLIC FUNDS # DEALS $ MIL.* CAPITAL RÉGIONAL ET COOPÉRATIF DESJARDINS 21 $81 FONDS DE SOLIDARITÉ FTQ 9 $216 OMERS VENTURES MANAGEMENT INC. 6 $151 SCALEUP VENTURES 3 $15 FONDACTION CSN 3 $1 MOST ACTIVE GOVERNMENT FUNDS # DEALS $ MIL.* BDC CAPITAL 17 $30 NEW BRUNSWICK INNOVATION FOUNDATION (NBIF) 14 $7 MARS IAF 10 $21 BDC HEALTHCARE FUND 5 $188 BDC IT VENTURE FUND 5 $90 BDC INDUSTRIAL, CLEAN AND ENERGY TECHNOLOGY (ICE) VENTURE FUND 4 $61 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

17 PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

18 PRIVATE EQUITY HIGHLIGHTS // H A staggering $8.9B was invested across 170 PE deals in Q2, 79% higher than the $5.0B in the previous quarter and 164% more than in the same quarter last year ($3.4B) Q was a peak quarter for PE investment with the most dollars invested since Q3 2015, which saw $11.4B disbursed This brings the total YTD PE investment to $13.9B over 277 deals, already surpassing the $13.8B in 2016 Key Findings: Two $1B+ mega deals accounted for 50% of dollars invested: the $4.8B privatization of Toronto-based DH Corporation and the $2.2B acquisition of Montreal-based Garda World Security Corp. Activity in the $25-$100M small-market segment is on pace for a record year 31 YTD deals compared to 48 in 2016 and 56 in 2015 Similarly, in the $100-$500M mid-market segment, there have been 15 YTD deals, already exceeding the 14 in 2016 and on pace to reach the 31 deal-mark in 2015 One quarter of all PE deals in H (42) were disbursed to Montreal-based companies, with 15% (27) going to Calgarybased companies and Montérégie-based companies receiving a 13% share (23) More than a fifth (23%) of PE deals this year have been closed in the industrial & manufacturing sector with ICT companies receiving the second largest share (17%). Both these sectors have been receiving a steadily increasing share of PE deal flow since 2013 when industrial & manufacturing captured only a 14% share and ICT a 10% share. Inversely, the oil and gas sector deal flow share has dropped from 19% in 2013 to a mere 9% in H There have been 80 YTD exits in the first half of 2017, already exceeding the number of exits in each of the last four years This includes the $2.2B exit from Montreal-based Garda World Securities, sold to Rhone Capital by Apax Partners Two IPOs included the $445M dual listing of the iconic Canada Goose on TSX/NYSE and the $100M TSX-debut of STEP Energy Services Ltd. VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

19 PRIVATE EQUITY HEAT MAP // BUYOUT & ADD-ON DEALS ONLY // H total # 92 deals total$7.6b $584m BC $813m Alberta $3m Saskatchewan 5 2 $723M Manitoba 26 $2.9b Ontario 25 $2.6b Québec 1 3 na Nova Scotia na Prince Edward Island VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

20 PRIVATE EQUITY HEAT MAP // ALL PE DEALS // H total $13.9b total # 277 deals $1.3b BC $1.4b Alberta $9m Saskatchewan 12 3 $723M Manitoba 46 $6.3b Ontario 156 $4.2b Québec 1 4 NA Nova Scotia NA Prince Edward Island VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

21 QUARTER-OVER-QUARTER PE INVESTMENT ACTIVITY // 2013-H $30,000 $ Millions Invested # Deals 200 $25,000 $20,000 $15,000 $10,000 $5,000 $0 57 $2,530 Q1 81 $2,933 Q2 $1,846 Q $3,963 Q4 64 $6,277 Q1 88 $5,250 Q2 81 $7,804 Q3 102 $22,852 Q4 $7,053 Q $1,869 Q2 117 $11,367 Q3 113 $2,600 Q4 $3, Q1 147 $3,372 Q2 131 $3,038 Q3 138 $4,142 Q4 $4,976 Q $8,915 Q TOTAL: 269 DEALS $11.3B TOTAL: 335 DEALS $42.2B TOTAL: 425 DEALS $22.9B TOTAL: 539 DEALS $13.8B TOTAL: 277 DEALS $13.9B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

22 TOP DISCLOSED CANADIAN PE DEALS // H COMPANY PROVINCE FIRMS INVOLVED IN TRANSACTION SECTOR $ MIL. DH CORPORATION (D+H) ONTARIO VISTA EQUITY PARTNERS BUSINESS PRODUCTS & SERVICES $4,800 GARDA WORLD SECURITY CORP. QUÉBEC APAX PARTNERS LLP, RHÔNE GROUP LLC OTHERS $2,200 ARCTIC GLACIER HOLDINGS INC. MANITOBA H.I.G. CAPITAL, LLC, THE CARLYLE GROUP CONSUMER & RETAIL $723 OLD PSG WIND-DOWN LTD. BC ANTARAS CAPITAL, L.P., FAIRFAX FINANCIAL HOLDINGS LIMITED CONSUMER & RETAIL $575 LUNDIN GOLD INC. BC BLACKSTONE GROUP L.P., ORION RESOURCE PARTNERS (USA) LP MINING & RESOURCES $572 XPLORNET COMMUNICATIONS INC. ONTARIO SEARCHLIGHT CAPITAL PARTNERS, LLC ICT $405 VESTA ENERGY CORP ALBERTA JOG CAPITAL CORP., RIVERSTONE HOLDINGS LLC OIL & GAS, POWER $305 HALOGEN SOFTWARE INC. ONTARIO SABA SOFTWARE, VECTOR CAPITAL CORP. ICT $293 CANADIAN SOLAR ONTARIO SOLAR PROJECT - SAULT STE. MARIE ONTARIO CANADIAN SOLAR INC., FENGATE CAPITAL MANAGEMENT LTD. CLEANTECH $262 NORTHERN BLIZZARD RESOURCES INC. ALBERTA NGP ENERGY CAPITAL MANAGEMENT, LLC, RIVERSTONE HOLDINGS LLC, WATEROUS ENERGY FUND, WEF OIL & GAS, POWER $244 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

23 PE ACTIVITY BY DEAL SIZE // H $ Millions Invested # Deals $16,000 $14, $14, $12,800 $11,200 $9,600 $8,000 $6,400 $4,800 $3,200 $1,600 $0 86 $631 $ $ $1,265 $ $1, $2,804 $2, $2,157 $1, H H H $4,858 $6,093 $6,320 $3,212 $2, $975 1 $6,601 $4,797 $3, $1,870 H $3, $10,910 $4,782 $4,034 $2,200 $3, H $4, H < $25M $25M-$100M $100M-$500M $500M-$1B $1B-$2.5B $2.5B+ TOTAL: 903 DEALS $4.4B TOTAL: 221 DEALS $10.6B TOTAL: 110 DEALS $23.4B TOTAL: 25 DEALS $17.4B TOTAL: 17 DEALS $25.3B TOTAL: 4 DEALS $23.0B VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

24 TOP 10 CANADIAN CITIES // ADMINISTRATIVE CENTRES //H #1 montréal $2.9B 42 DEALS Total Deals $ Millions 1. Montréal 42 $2, Calgary 27 $1, Montérégie 23 $ Toronto 22 $5, Nord-du-Québec / Abitibi-Témis 18 $ Vancouver 12 $1, Saguenay-Lac-St-Jean/Côte-Nord 10 $12 8. Bas-Saint-Laurent 8 $33 9. Québec 10. Saskatoon 8 7 $68 $ VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

25 PE SECTOR BREAKDOWN // H # Deals $ Millions Industrial & Manufacturing 62 $382 ICT Mining & Resources Consumer & Retail Agri-Forestry Oil & Gas, Power $1,084 $959 $1,438 $965 $1,148 Business Products & Services 15 $5,061 Life Sciences 13 $123 Others 9 $2,230 CleanTech 9 $433 Automotive & Transportation 9 $32 most active sector Financial Real Estate 5 2 $26 $9 industrial & manufacturing 62 deals VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

26 PE EXITS * // 2013-H $ Millions Invested # Deals $12, $10,000 $10,851 $11,437 $11, $8,000 $6,000 $4,000 $2,000 0 $2,932 3 $8,243 5 $2,888 6 $306 $ $6,476 $4, $657 $1, H H H $3, $2,155 NA 11 NA IPO** M&A Secondary * ** INCLUDES TRANSACTIONS WITH UNDISCLOSED VALUES; IPO VALUATION VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

27 TOP CANADIAN PE EXITS // H Apax Partners LLC #1 bought by $2,200m RHONE CAPITAL SELLER COMPANY BUYER $ MIL. APAX PARTNERS LLC GARDA WORLD SECURITY CORP. RHONE CAPITAL $2,200 H.I.G. CAPITAL, LLC ARCTIC GLACIER HOLDINGS INC. CARLYLE PARTNERS LP $723 BAIN CAPITAL CANADA GOOSE, INC. NA - IPO ON TSX & NYSE $445 EDGESTONE CAPITAL PARTNERS, BREGAL CAPITAL, PINE BROOK PARTNERS, SOROS STRATEGIC PARTNERS AURIGEN CAPITAL LIMITED PARTNERRE $375 RIVERSTONE HOLDINGS AND NGP ENERGY CAPITAL MANAGEMENT NORTHERN BLIZZARD RESOURCES INC. WATEROUS ENERGY FUND (WEF) $244 ARC FINANCIAL CORP. UGR BLAIR CREEK LTD. PAINTED PONY PETROLEUM LTD. $224 SWANDER PACE KICKING HORSE COFFEE LAVAZZA $172 ARC FINANCIAL CORP. STEP ENERGY SERVICES LTD. NA - IPO ON TSX $100 SASKWORKS VENTURE FUND SPUR RESOURCES TAMARACK VALLEY ENERGY LTD. $57 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

28 MOST ACTIVE PE INVESTORS // H # Deals $ Millions* Fonds de solidarité FTQ 66 $437 $937 Capital Régional et Coopératif Desjardins 49 $533 Fondaction CSN 18 $305 Investissement Québec 14 $240 Caisse de dépôt et placement du Québec 11 $294 PFM Capital Inc. 9 $61 BDC Capital Inc. 7 $90 Lex Capital Management Inc. ARC Financial Corp. Clairvest Group Inc XPND Capital $12 $12 $314 $294 most active PE FIRM Fonds de solidarité FTQ * TOTAL DEAL VALUES INCLUDES ALL PARTICIPATING INVESTORS 66 DEALS VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

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 COMPUTER HARDWARE AND SOFTWARE AND SERVICES, INTERNET SOFTWARE OR SERVICES, ECOMMERCE, ELECTRONIC & SEMICONDUCTOR, MOBILE AND TELECOM TECHNOLOGIES AND SERVICES BIOTECH, MEDICAL DEVICES, PHARMACEUTICALS, EHEALTH, HEALTHCARE PRODUCTS AND SERVICES, AND OTHER MEDICAL RELATED PRODUCTS AND SERVICES ENERGY AND FUEL TECHNOLOGIES, EFFICIENCY AND CONSERVATION, RENEWAL ENERGY, ENVIRONMENTAL TECHNOLOGIES AND OTHER ENERGY AND ENVIRONMENTAL PRODUCTS AND SERVICES TRADITIONAL AND ADVANCED AGRICULTURAL TECHNOLOGIES AND SERVICES VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

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 continued VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H

31 CVCA METHODOLOGY //PRIVATE EQUITY 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 // H

32 CVCA ABOUT & CONTACT To obtain estimates for additional custom InfoBase data reports please contact Authors DARRELL PINTO Research Director 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 nonprofit 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 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 DAVID KORNACKI Research Analyst dpinto@cvca.ca ext. 208 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. CAROLYN GOARD Senior Manager, Communications cgoard@cvca.ca ext. 204 About CVCA The Canadian Venture Capital and Private Equity Association is the voice of Canada s venture capital and private equity industry. We are focused on improving the private capital ecosystem by broadening industry awareness and providing market research, networking, and professional development opportunities. We also advocate on behalf of the industry to ensure sound public policy that encourages a favourable investment environment. The CVCA works alongside its members, who represent the vast majority of private capital firms in Canada, to improve the industry and drive innovation and growth. For more information, visit /CVCACanada CVCA - Canadian Venture Capital and Private Equity Association 372 Bay St., Suite 1201 Toronto, ON M5H 2W9 VENTURE CAPITAL & PRIVATE EQUITY CANADIAN MARKET OVERVIEW // H