The number of deals to Canadian venture-backed companies increased in the second quarter of 2018 (Q2 2018), according to the MoneyTree Report from PricewaterhouseCoopers LLP (PwC Canada) and CB Insights published Thursday.
The increase occurred despite a marginal decline in investment dollars compared to the previous quarter. In Q2 2018, Canadian venture-backed companies closed 116 deals, up from 112 in Q1 2018. Meanwhile, total venture capital funding totaled US$900 million in Q2 2018, a 7% decline in investment from last quarter.
“From coast to coast, we have seen strong venture capital activity in the first half of 2018. A recent rebound in seed-stage deal activity and a lift in later-stage deals show broad levels of investment support across all stages of funding,” says Michael Dingle, national deals technology leader, PwC Canada, in a statement.
“Canadian artificial intelligence (AI) companies saw record highs in funding and deals this past quarter, as that sector attracts increasing investor interest,” says Anand Sanwal, co-founder and CEO of CB Insights, in a statement. “With funding to AI companies jumping 104% in Q2 2018, the sector is on pace for a record funding year.” Within the sector, US$169 million was invested across 13 deals.
Mobile and telecom companies saw the biggest funding increase at 167% as US$186 million was invested across 13 deals. This jump in funding was driven by large rounds to Ritual Technologies (US$70 million) and TouchBistro (US$54 million).
Funding to Canadian fintech companies was down for a second straight quarter, declining by 10% to US$79 million in Q2 2018. However, deal activity increased to 13 deals, up from eight deals in Q1 2018.