Hinsley Ford Expect Disruptive Technologies to Get a Large Slice of the VC Pie In 2015
Canadian Venture Capital, Private Equity Activity Surged In 2014 and Looks Set to Continue in 2015 and Beyond.
- (1888PressRelease) March 12, 2015 - Hinsley Ford was approached by no fewer than 15 disruptive technology companies in 2014 but none were taken on board. However, Hensley expects at least half of them to come back in the second quarter of 2015 with better devised strategies and is confident they will partner at least 3 of them in line with the current trend in Canada.
Canada's venture capital and private equity markets surged in 2014, driven by a spate of deals in the burgeoning tech start-up sector and large investments in oil and gas companies.
In 2014, Canadian start-ups received some C$2.36 billion in funding, a 21 percent jump from a year ago and nearly double the C$1.2 billion invested in the space five years ago.
The surge was driven by large financings for companies like Kitchener, Ontario-based Desire2Learn, Vancouver's Hootsuite Media, St John's, Newfoundland-based Verafin, and Edmonton-based Aurinia Pharmaceuticals.
The deal activity still pales in comparison to the U.S. market, where early stage companies reaped a US$48 billion bonanza in investment last year. Canada's average round size of C$4.5 million also lagged far behind the average U.S. deal size of C$12.5 million.
Beneficiaries of the surge in venture capital funding in Canada include the burgeoning number of start-ups in and around BlackBerry's hometown of Waterloo, Ontario.
Meanwhile, Private equity investments more than tripled from 2013 levels to C$32.2 billion ($25.62 billion) in 2014, while venture capital funding rose 21 percent to C$2.36 billion.
The stunning jump in private equity investment was largely driven by U.S. fast food chain Burger King's C$12.64 billion takeover of Canadian coffee and donut chain Tim Horton's, a deal that created the world's third-largest fast food chain.
That acquisition was backed by investments from billionaire investor Warren Buffett's Berkshire Hathaway and Burger King's majority investor 3G Capital.
Calgary, Alberta-based Encana's sale of its Bighorn assets to Apollo Global-backed Jupiter Resources for C$2 billion and Lululemon Athletica founder Chip Wilson's sale of half his stake in the clothing company to private equity firm Advent International for C$864 million were among other marquee deals.
The number of private equity deals spiked 22 percent to 410 in 2014 from 335 the prior year, according to the data.
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