Final Q4 2010 VC Data Deck - English

8/7/2019 Final Q4 2010 VC Data Deck - English

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Pre ared b Thomson Reuters for the Canadian Venture Ca ital& Private Equity Association


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ana as

ar et

n

$Investedand#CompaniesFinanced 67NorthAmericanContext 812Domesticvs.ForeignInvestment 1316

DealSizes

&

Types

of

Companies

Funded 17

21

InvestmentStages 2223Top(Disclosed)Deals 24GeographicalDistributionofInvestment 2527

VCFunds

Raised 28

31

IPOandM&AExits 32

TableofContentsTableofContents

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Despite a slow final quarter, Canadian venture capital (VC) market activity in Canada grew moderately in 2010, with$1.1 billion invested in total, or 10% more than the $1.0 billion invested the year before. Consequently, the domesticmarket experienced its first per-annum increase in disbursement levels since 2007.

This being said, VC invested in Canada in 2010 remained shy of the $1.4 billion invested in 2008.

.Companies financed totaled 354, compared to 337 companies financed in 2009.

Most of the heft behind Canadian market activity in 2010 came in the first six months, which accounted for 57% of alldisbursements. In contrast, VC activity in Q4 2010 was the slowest of the year in terms of dollar flows, with $241million invested, down 27% from $329 million invested in Q4 2009.

Despite a number of major Canadian VC deals done last year, including financings of Encelium Technologies,

Greengate Power and Peraso Technologies in Q4 2010, amounts invested per firm did not move up appreciably.Company financing sizes averaged $3.2 million in 2010, or not far above the $3.1 million average of the year before.

As a result, the competitive gap in VC financing sizes between Canada and the United States was no less wide lastyear, with Canadian innovative firms garnering only 39% of the dollars going to their American counterparts.

The international deal-making of Canadian VC funds rose considerably in 2010, with $313 million invested, up 64%rom m on e year e ore. e omes c ac v y, s s e rs year-over-year grow s own y s mar eindicator in three years.

Tr en ds in t he US VC m a rk et

Higher levels of VC market activity were also evidenced in the United States in 2010, and also for the first time since2007. A total of US$21.8 billion was invested south-of-the-border, or 19% more than the US$18.3 billion invested in2009.

CanadasVentureCapitalMarketin2010CanadasVentureCapitalMarketin2010

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Growth in Canadian market activity last year was, in dollar terms, located chiefly in Ontario, British Columbia andAlberta. In particular, Ontario bounced back from a disappointing 2009, with $424 million invested in 2010, or 37%of the national total, and 43% more than the $296 million invested previously.

VC invested in British Columbia totaled $216 million in 2010, up a sharp 35% compared to the $160 million of theyear before. Disbursement levels in Alberta climbed 8% year-over-year, with $67 million put to work this timearound.

Relative to its $429 million invested in 2009, Qubec-based VC activity decreased 9% last year, with $391 millioninvested. However, with 34% of all disbursements, the Qubec share of the domestic market remained abovehistorical levels.

Canadian VC t r ends by inv estor t ype

Both domestic and foreign investors were more active in the Canadian market in 2010. In total, Canadian VC fundsdeployed $811 million to deals, which represents an 11% improvement over the $728 million they accounted for in2009.

Locally-based private-independent funds led this trend, increasing their dollars invested to $262 million in 2010, up25% year-over-year. Not far behind were LSVCC and other retail funds, which invested $236 million last year, thoughthis la ed their activity in 2009 by 6%.

American VC funds and other foreign investors brought $331 million to Canadian deals in 2010, or 6% more than the$311 million they contributed the year before. As a result, cross-border activity accounted for 29% of total dollarsinvested, which approximates the traditional market share.

Canadian VC t r ends by sector

While communications and other IT sectors once a ain attracted the lar est ercenta e of Canadian VC activit last

CanadasVentureCapitalMarketin2010CanadasVentureCapitalMarketin2010

year, it was deal-making in clean technology and life sciences sectors that spurred overall market growth.

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6/33

180$700

131

110

122

108115

120

140

160

$500

$600

nso

f$CAD

snso

f$CAD

s

60

80

100

$300

$400

alues:M

illio

#

ofD

ea

l

alues:M

illio

#

ofD

ea

l

0

20

40

$0

$100Dea

l

Dea

l

Q1'07

Q2'07

Q3'07

Q4'07

Q1'08

Q2'08

Q3'08

Q4'08

Q1'09

Q2'09

Q3'09

Q4'09

Q1'10

Q2'10

Q3'10

Q4'10

Total Deal Values # of Deals

$241MillionofVentureCapitalInvestedinQ42010$241MillionofVentureCapitalInvestedinQ42010DOLLARSINVESTEDANDCOMPANIESFINANCEDDOLLARSINVESTEDANDCOMPANIESFINANCED

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180$1,000

120

140

160

$700

$800

nso

f$CAD

snso

f$CAD

s

60

80

100

300

$400

$500

alues:M

illio

#

ofD

ea

l

alues:M

illio

#

ofD

ea

l

0

20

40

$0

$100

$200Dea

l

Dea

l

Q1'07

Q2'07

Q3'07

Q4'07

Q1'08

Q2'08

Q3'08

Q4'08

Q1'09

Q2'09

Q3'09

Q4'09

Q1'10

Q2'10

Q3'10

Q4'10


$241MillionofVentureCapitalInvestedinQ42010$241MillionofVentureCapitalInvestedinQ42010DOLLARSINVESTEDANDCOMPANIESFINANCEDDOLLARSINVESTEDANDCOMPANIESFINANCEDFOURQUARTERROLLINGFOURQUARTERROLLING AVERAGESAVERAGES

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$635

$927

$1,349

$2,446

$10,398

Washington

Texas

New York

Massachusetts

California

$686

$780

$1,067

$2,337

$11,313

Washington

Texas

New York

Massachusetts

California

$424

$466

$471$478

$524

Ontario

New Jersey

North CarolinaColorado

Pennsylvania

$332

$345

$429$475

$524

Florida

Georgia

QubecPennsylvania

Colorado

$216

$342

$371

$386

$391

British Columbia

Georgia

Maryland

Virginia

Qubec

$279

$283

$296

$300

$329

North Carolina

Virginia

Ontario

Minnsota

Maryland

$162

$179

$198

Ohio

Oregon

Florida

$178

$181

$183

Indiana

Utah

Connecticut

2010 2009

NorthAmericanRankingsNorthAmericanRankingsVENTURECAPITALDISBURSEMENTSBYPROVINCEVENTURECAPITALDISBURSEMENTSBYPROVINCE ANDSTATEANDSTATEONTARIO,QUBEC,BRITISHCOLUMBIAONTARIO,QUBEC,BRITISHCOLUMBIA FINISH2010INFINISH2010IN 1111thth,12,12thth,and16,and16thth PlacePlace

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$35

$25

$30

$Billions

)

$15

$20

ves

ted(

CA

$5

$10

A

moun

tI

$0

2005 2006 2007 2008 2009 2010

USA Canada X 10

CanadaandU.S.InvestmentLevelsIncreasingOver2009LowsCanadaandU.S.InvestmentLevelsIncreasingOver2009LowsVENTURECAPITALDISBURSEMENTS:VENTURECAPITALDISBURSEMENTS: CANADA&THEUNITEDSTATESCANADA&THEUNITEDSTATES

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6,000

4,000

5,000

nance

d

3,000

ompanie

sFi

1,000

,

#

of

0

2005 2006 2007 2008 2009 2010

USA Canada X 10

CanadaContinuesToFundComparativelyMoreCompaniesCanadaContinuesToFundComparativelyMoreCompaniesNUMBEROFCOMPANIESFUNDED:CANADA&UNITEDSTATESNUMBEROFCOMPANIESFUNDED:CANADA&UNITEDSTATES

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$12.0s)

8.0

$10.0

CAD

$Millio

$6.0

ntInvest

ed(

$2.0

.

era

ge

Amou

$0.0

2005 2006 2007 2008 2009 2010

USA Canada

A

AverageCanadianCompanySecuresLessThanItsU.S.CounterpartAverageCanadianCompanySecuresLessThanItsU.S.CounterpartAMOUNTSINVESTEDPERCOMPANY,AMOUNTSINVESTEDPERCOMPANY, CANADA&UNITEDSTATESCANADA&UNITEDSTATES

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$6.0s)

4.0

$5.0

CAD

$Millio

$3.0

ntInvest

ed(

$1.0

.

era

ge

Amou

$0.0

2005 2006 2007 2008 2009 2010

Foreign Investors Domestic Investors

A

U.S.FundsStillMakingLargerInvestmentsThanDomesticFundsU.S.FundsStillMakingLargerInvestmentsThanDomesticFundsAVERAGEINVESTMENTSIZESINCANADIANCOMPANIESAVERAGEINVESTMENTSIZESINCANADIANCOMPANIESDOMESTICINVESTORSVS.FOREIGNINVESTORSDOMESTICINVESTORSVS.FOREIGNINVESTORS

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100%

70%

80%

90%

40%50%

0%

10%

20%

2005 2006 2007 2008 2009 2010

Private Independent Retail Government Foreign Other

AngelInvestors,ManagementTeams,ContributingMoreToDealsAngelInvestors,ManagementTeams,ContributingMoreToDealsSHAREOFDOLLARSINVESTEDBYINVESTORTYPESHAREOFDOLLARSINVESTEDBYINVESTORTYPE

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90$900

60

70

80

$600

$700

$800

of$CAD

40

50

$400

$500

lues:

Million

#

ofDe

als

10

20

30

$100

$200

$300

Dea

lVa

0$0

2005 2006 2007 2008 2009 2010


ForeignInvestorsIncreaseCanadianInvestmentBy6%Over2009ForeignInvestorsIncreaseCanadianInvestmentBy6%Over2009FOREIGNINVESTORS,CANADIANPORTFOLIOCOMPANIESFOREIGNINVESTORS,CANADIANPORTFOLIOCOMPANIESDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS

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15/33

90$400

60

70

80

$300

$350

of$CAD

40

50

$150

$200

lues:

Millions

#

ofDe

als

10

20

$50

$100

Dea

lVa

0$0

2005 2006 2007 2008 2009 2010


CanadiansParticipatein43%MoreForeignDealsin2010Over2009CanadiansParticipatein43%MoreForeignDealsin2010Over2009CANADIANINVESTORS,FOREIGNPORTFOLIOCOMPANIESCANADIANINVESTORS,FOREIGNPORTFOLIOCOMPANIESDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS

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16/33

$1,400

$1,000

$1,200

$Millions

)

$600

$800

ves

ted(

CA

$200

$400

A

moun

tI

$0

2005 2006 2007 2008 2009 2010

Investment Abroad Domestic Investment

CanadianFundsInvestingMorein2010,DomesticallyandAbroadCanadianFundsInvestingMorein2010,DomesticallyandAbroadCANADIANINVESTMENTWITHINCANADAVS.CANADIANINVESTMENTOUTSIDECANADACANADIANINVESTMENTWITHINCANADAVS.CANADIANINVESTMENTOUTSIDECANADADOLLARSINVESTEDDOLLARSINVESTED



17/33

300$1,200

200

250

$800

$1,000

so

f$CAD

150$600

lues:

Million

#

ofDea

ls

50$200Dea

lV

0$0

2005 2006 2007 2008 2009 2010


InformationTechnologyInvestmentHoldsSteadyin2010InformationTechnologyInvestmentHoldsSteadyin2010INFORMATIONTECHNOLOGYSECTORINFORMATIONTECHNOLOGYSECTORDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS

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120$700

80

100

$500

$600

so

f$CAD

60$300

$400

lues:

Million

#

ofDea

ls

20$100

$200

Dea

lV

0$0

2005 2006 2007 2008 2009 2010


LifeSciencesAttract38%MoreDollarsin2010,YearLifeSciencesAttract38%MoreDollarsin2010,YearOverOverYearYearLIFESCIENCESSECTORLIFESCIENCESSECTORDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS



19/33

50$250

35

40

45

$200

so

f$CAD

20

25

30

$100

$150

lues:

Million

#

ofD

ea

ls

5

10

15

$50Dea

lV

0$0

2005 2006 2007 2008 2009 2010


2010Investment InCleantechSectorIncreases58%Over20092010Investment InCleantechSectorIncreases58%Over2009CLEANTECHNOLOGIESSECTORCLEANTECHNOLOGIESSECTORDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS

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250$300

200

$200

$250

so

f$CAD

100

150

$150

lues:

Million

#

ofD

ea

ls

50$50D

ea

lV

0$0

2005 2006 2007 2008 2009 2010


MoreTraditionalSectorCompaniesFinancedThanAnyOtherSectorMoreTraditionalSectorCompaniesFinancedThanAnyOtherSectorTRADITIONALSECTORTRADITIONALSECTORDOLLARSINVESTEDANDNUMBEROFFINANCINGSDOLLARSINVESTEDANDNUMBEROFFINANCINGS



21/33

$10ns

)

$7

$8

$9

(CAD

$Millio

$4

$5

$6

ntInves

ted

$1

$2

$3

ver

age

Amo

$0

2005 2006 2007 2008 2009 2010

Information Technology Life Sciences Cleantech Traditional

A

LifeSciences,CleantechDealSizesGrowingLifeSciences,CleantechDealSizesGrowingAVERAGEAMOUNTINVESTEDPERCOMPANY,BYSECTORAVERAGEAMOUNTINVESTEDPERCOMPANY,BYSECTOR



22/33

1,200

800

1,000

men

ts

600

Fun

dIn

ves

t

200

#

of

0

2005 2006 2007 2008 2009 2010

New Follow-On

NumberofFollowNumberofFollowOnInvestmentsReaches5OnInvestmentsReaches5YearLowYearLow#OFFUNDINVESTMENTS,NEWVS.FOLLOW#OFFUNDINVESTMENTS,NEWVS.FOLLOWONON



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1,000

700

800

900

men

ts

400

500

600

Fun

dIn

ves

t

100

200

300#

of

0

2005 2006 2007 2008 2009 2010

Early Stage Late Stage

LateStageInvestmentsOutpaceEarlyLateStageInvestmentsOutpaceEarlyStagein2010Stagein2010#OFFUNDINVESTMENTS,EARLYVS.LATESTAGES#OFFUNDINVESTMENTS,EARLYVS.LATESTAGES

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Company P rov. Value Disclosed Investors

Enerkem Technologies, Inc. QC $53.8 Rho Ventures, Braemar Energy Ventures,BDR Capital, Cycle Capital Management

CellFor, Inc. BC $36.4 Capricorn Investment Group, CSFB EquityPartners, GrowthWorks Capital

Protox Therapeutics, Inc. BC $35.0 Warburg Pincus

Adenyo ON $27.7 Genuity Capital Markets

Aquinox Pharmaceuticals,Inc.

BC $25.7 Ventures West, Pfizer VentureInvestments, Johnson & JohnsonDevelopment Corporation, Baker BrothersInvestments, BC Advantage Funds

INVIDI Technology AB $23.6 EnerTech Capital, InterWest Partners,Goo le Motorola Ventures Menloorpora on

Ventures, Westbury Partners

Sprott Power Corporation ON $23.0 VentureLink

NexJ Systems, Inc. ON $22.5 None Disclosed

TopCanadianVCDeals(Disclosed)in2010TopCanadianVCDeals(Disclosed)in2010DEALVALUESINMILLIONSOFCANADIANDOLLARSDEALVALUESINMILLIONSOFCANADIANDOLLARS

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2009: 1 039 Million2010: 1 142 Million

British Columbia AlbertaManitoba-Saskatchewan OntarioQubec Atlantic Canada

Qubec,OntarioContinuetoAttractBulkOfVCDollarsQubec,OntarioContinuetoAttractBulkOfVCDollarsVCDOLLARSINVESTEDBYREGION,2009&2010VCDOLLARSINVESTEDBYREGION,2009&2010

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2009: 1 039 Million2010: 1 142 Million

Toronto Montreal Vancouver Ottawa

Quebec City Calgary Other

Toronto&VancouverSeeBiggestGainsYearToronto&VancouverSeeBiggestGainsYearOverOverYearYearVCDOLLARSINVESTEDBYMAJORURBANCENTRE,2009&2010VCDOLLARSINVESTEDBYMAJORURBANCENTRE,2009&2010



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1,000

700

800

900

of$CAD

400

500

600

ues:

Millions

100

200

300

Dea

lVa

l

0

2005 2006 2007 2008 2009 2010

Ontario Quebec Rest of Canada

InvestmentInOntarioEdgesOutQubecin2010InvestmentInOntarioEdgesOutQubecin2010DOLLARSINVESTEDINONTARIO,DOLLARSINVESTEDINONTARIO,QUBECQUBEC

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Q3 2010

Q1 2010

Q2 2010

$0 $100 $200 $300 $400 $500

Q4 2009

Individuals Corporations Foreign

Fund of Funds Government Other

2010FundraisingLedbyIndividuals,Governments,ForeignGroups2010FundraisingLedbyIndividuals,Governments,ForeignGroupsFUNDRAISINGBYQUARTER,BYSOURCEFUNDRAISINGBYQUARTER,BYSOURCE

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$4,000

$3,000

$3,500

so

f$CAD

$1,500

$2,000

,

ise

d:M

illion

$500

$1,000

Fun

ds

R

2005 2006 2007 2008 2009 2010

Canada USA X 0.10

U.S.Fundraising StillOutpacesCanadianFundraising,DespiteDeclineU.S.Fundraising StillOutpacesCanadianFundraising,DespiteDeclineNEWCAPITALCOMMITMENTSBYNEWCAPITALCOMMITMENTSBYNATIONNATIONCANADIANFUNDRAISINGHITSNEW16CANADIANFUNDRAISINGHITSNEW16YEARYEARLOWLOW

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30/33

$900

$600

$700

$800

so

f$CAD

$400

$500

ise

d:M

illion

$100

$200

Fun

ds

R

2005 2006 2007 2008 2009 2010

Private Independent Funds Retail Funds

RetailFundsOutpacePrivateFundsForFirstTimein5YearsRetailFundsOutpacePrivateFundsForFirstTimein5YearsNEWCAPITALCOMMITMENTSBYFUNDTYPENEWCAPITALCOMMITMENTSBYFUNDTYPE

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$900

$600

$700

$800

of$CAD

$400

$500

ise

d:

M

illion

$100

$200

Fun

ds

R

2005 2006 2007 2008 2009 2010

Ontario Quebec Rest of Canada

QubecLeadsCanadianFundraisingIn2010QubecLeadsCanadianFundraisingIn2010NEWCAPITALCOMMITMENTSBYPROVINCENEWCAPITALCOMMITMENTSBYPROVINCE

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40 $695$160

25

30

35

$100

$120

$140

10

15

20

$40

$60

$80

0

5

2006 2007 2008 2009 2010

$0

$20

2006 2007 2008 2009 2010

# of IPO Exits

# of M&A Exits

Average IPO Offering Size

Average M&A Transaction Size

StrategicSalesIncreasinginQuantityandValueStrategicSalesIncreasinginQuantityandValueEXITSOFCANADIANVCEXITSOFCANADIANVCBACKEDPORTFOLIOCOMPANIESBACKEDPORTFOLIOCOMPANIES

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Final Q4 2010 VC Data Deck - English

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