Montreal leads country in venture capital
Montreal-based companies raised US$800 million in venture capital (VC) in 2017 — more than companies based in any other Canadian city, according to a report released by PwC Canada and CB Insights, a market intelligence firm, on Tuesday.
Those investments were spread out over 63 deals. While that’s only three more deals than last year, the value of VC investments in Montreal rose 64 per cent when compared with the US$487 million invested in 2016. (The report cites figures in U.S. dollars, as most venture capital deals are denominated in that currency.)
The two largest VC investments made anywhere in Canada in 2017 went to Montreal companies, the US$166 million raised by point-ofsale software-maker Lightspeed in October and Element AI’s US$102 million raised in June.
Across Canada, investments in artificial intelligence were up, said Christine Pouliot, a deals partner at PwC. “Montreal is becoming a hub for artificial intelligence internationally. Definitely, it’s part of the reason why those investments have increased from 2016 to 2017.”
Also up were investments in data centres and financial technology, or fintech.
“Montreal has been able to position itself in those sectors that were very promising a couple of years ago and now those promises are becoming reality, and those technologies that were deadlocked a couple of years ago are now really becoming working technologies and technologies that can be commercialized,” Pouliot said.
Also pushing up the overall capital raised in Montreal is the fact that local companies that raised money a few years ago are growing and now raising bigger investment rounds, Pouliot said.
“There’s two trends that we’re seeing: we’re seeing bigger and later-stage deals being done. If you look from a distance at that $800 million, there’s a few really big deals in there, like the Element AI $100-million deal. That’s certainly a sign of maturity and progression of our ecosystem in Montreal,” said Sylvain Carle, a partner at Real Ventures, a Montreal-based venture-capital firm. He said interest in starting companies is also growing. The 2016 Montreal Startup Ecosystem Report, which Carle helped create, identified about 2,000 startups in Montreal. He said that’s approximately a tenfold increase over 10 years.
“We have depth, but we also have a much wider base of companies getting started,” Carle said. “Startups matter now in this city.”