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Average deal size hit $19 million, nearly triple what it was during the same quarter last year, according to data compiled by the Canadian Venture Capital and Private Equity Association. There was $1.8 billion in private equity investment in the quarter, an eight per cent decline compared to the same quarter last year. (The Logic)

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Talking point: Canadian private equity and venture capital have been going in opposite directions all year. In the first half of 2019, private equity investment hit $4.9 billion, its lowest number since 2013. Today, venture capital investing hit a high—$2.4 billion invested in a single quarter—not reached since 2013. Private equity deal size is 46 per cent lower this quarter compared to the past three years’ average. Venture capital deal size is up 215 per cent compared to the average over the past five years. Most of the private equity strength is in Quebec, where three out of every five disclosed deals took place. For venture capital, the strongest areas are Vancouver, Montreal and Toronto, where 64 per cent of all dollars were disbursed.

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The fund has secured over $100 million from the Business Development Bank of Canada, Fonds de solidarité FTQ, Teralys, Investissement Québec and the Caisse de dépôt et placement du Québec. (The Logic)

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Talking point: With the backing of some of the country’s largest institutional investors, Amplitude is looking to capitalize on Canada’s booming biotech sector. It’s led by two former BDC fund managers—Jean-François Pariseau and Dion Madsen—and will manage BDC’s current biotech venture portfolio, as well. If Amplitude succeeds, more of the economic benefit will stay in Canada. It isn’t the only institution working on this: in February, The Logic reported that MaRS Innovation had hired three lobbyists to ask for “tens of millions” to help Canadian biotech startups stay in the country. International investors are increasingly interested in Canadian biotech startups, too. In April, Waltham, Mass.-based healthtech firm PerkinElmer gave up to $2 million for a lab in Waterloo.

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The fund’s largest investor is Conexus Credit Union itself; the Regina-based credit union contributed $15 million. Five other local credit unions and about a dozen local businesses collectively supplied $7.5 million; SaskWorks Venture Fund contributed $6.5 million; and the remaining $1.5 million came from undisclosed individuals and credit unions. (BetaKit)

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Talking point: Saskatchewan had a massive influx of VC capital in 2019—deals totalled $80 million in the first half of the year, compared to $16 million in all of 2018 and $14 million the year prior. That’s due in part to a 45 per cent tax credit for tech startup investors, introduced in late 2018. Conexus fund manager Sean O’Connor said he made a point of working with local investors, and the focus on local capital is a departure from how large VC deals typically play out in the province, which are usually furnished by U.S. investors. The fund will focus on early-stage Saskatchewan tech startups.

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The Canadian Venture Capital and Private Equity Association (CVCA) released an open letter to party leaders Wednesday outlining what it wants from the next federal government. It recommended the government increase its VC investments, focusing on long-term funding for sectors like biotech and cleantech; prioritize foreign talent acquisition through avenues like the Global Talent Stream; make corporate and personal tax rates more competitive; and review the interest deductibility rules to encourage business creation and foreign direct investment. (The Logic)

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Talking point: Many of the CVCA’s requests focus on maintaining or building on programs launched or made permanent by the current Liberal government. The letter also lauds the party for its plan to crack down on corporate tax loopholes. “The CVCA is already mobilizing on this issue,” it reads. The CVCA’s requests on tax competitiveness, however, diverge from existing Liberal policy. If elected to lead the next government, both Liberal and Conservative leaders have vowed to cut personal taxes, either for low-income earners (Liberals) or more broadly (Conservatives). And while the Conservatives have yet to release their full platform, leader Andrew Scheer said he would reverse the Liberals’ small-business tax changes made in 2018 and lower the rate for small-business investments.

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American growth equity firms TCV and JMI Equity will invest a combined US$250 million in equity for a minority stake in Clio, which provides cloud-based software for about 150,000 lawyers in small- and medium-sized firms. Clio—which doesn’t disclose financial information—will use the money to enhance the scope of its software offerings to help lawyers attract clients. (The Logic)

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Talking point: It’s been a record year for VC activity in Canada, which saw $2.15 billion in VC investment in the first half of 2019. This deal—the country’s biggest since 2000—exceeds 2019’s next largest investment into Hamilton, Ont.-based Fusion Pharmaceuticals by almost US$150 million. It also surpasses the combined total for VC investments in Vancouver-based companies this year by nearly US$130 million. It’s in line with the trend for VC deals in the country, which have been getting bigger and leaning toward later-stage companies. This year, deal size is up 26 per cent, compared to the average from the past five years.

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Venture capital investing—which consisted of 42 per cent “megadeals” (those worth more than $50 million) totalling $895 million—beat last year’s H1 record of $1.7 billion, according to a report from the Canadian Venture Capital and Private Equity Association. Average deal size was $9 million, up 22 per cent from the second quarter of 2018. Private equity investment fell to $4.9 billion, the lowest number since the first half of 2013, which is when the CVCA started collecting data. (The Logic)

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Talking point: The increase in deal size, including the growing number of megadeals, could indicate a new stage of maturity for VC investing in Canada: deal size is up 26 per cent compared with the average over the last five years, and investments are shifting toward later-stage companies. Megadeals have made up a growing portion of total VC investment in Canada since 2016—H1 2018 saw seven megadeals totalling $493 million. The increasing size of transactions is in line with trends in larger, more established markets like the U.S., where deals worth more than US$50 million made up more than half of VC investment in H1 2019.

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Nudge said it will put the money toward growing its data-science team and expanding its growth over the past year, which includes a 200 per cent revenue jump and a 40 per cent headcount increase. Nudge is a tool employers use to communicate with employees, who get points for using the app. This round brings its total funding to over $19 million; it was led by Chicago-based Jump Capital. (The Logic)

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Talking point: Nudge is one of the few women-led or -co-founded Canadian tech firms to get eight-figure private funding. Its founding team is two-thirds women, and the majority of its executive team is made up of women. Women-led companies still receive the minority of investments made in the country. In March, my colleague Catherine reported that nearly 90 per cent of Canadian venture capital deals since 2014 went to companies founded exclusively by men. Jump Capital typically invests in U.S. companies (all but one of its other 2019 investments were in America). Several Canadian investors also participated in this round, including Montreal-based Brightspark Ventures, which led the company’s seed round, and the Business Development Bank of Canada.

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The Regina-based credit union is contributing $15 million itself, and has raised $7.5 million from other undisclosed investors so far. (BetaKit)

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Talking point: Saskatchewan tech firms saw an average growth of 100 per cent in the first nine months of 2018, according to SaskTech, an advocacy group that represents technology companies in the province; firms also said they planned to double their hires, on average, in 2019 compared to the year before. However, firms in the province received less than 0.5 per cent—about $16 million—of all VC invested in Canada in 2018, according to the Canadian Venture Capital and Private Equity Association’s last annual report. Sean O’Connor, Conexus’ venture capital (VC) fund manager, said “startups are starved” for investments. Conexus’ fund is meant to address that dearth of VC funding, and provide more local capital—some of the biggest deals in local companies are coming from U.S. investors. The new fund alone will nearly double the amount of VC investment the province saw last year.

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Vancouver-based Raven Indigenous Capital Partners will use the money to invest in companies working in four areas: media, tourism, cleantech and natural products. Raven is looking to make investments of between $250,000 to $1 million, and hopes to raise a total of $5 million for the fund by October. (Globe and Mail)

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Talking point: Raven, which is targeting six to eight per cent returns, bills itself as the first Indigenous investment fund of its kind. In April, Toronto-based Bridging Finance also launched a new fund, which it billed as the first Indigenous-focused fund to project eight per cent returns. Both firms’ claim to being first are reasonable, since Raven is a VC firm, and Bridging provides debt financing. The two will be competing for similar business, though, and they may not be the only ones in the space for long. There’s a pipeline of deals worth between $400 million and $500 million in this kind of ethical investing. And, the federal government is trying to draw more interest in the space via grants for Indigenous people looking to patent their intellectual property, and $100 million to help Indigenous-led small businesses attract more investments.

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The winners include Vancouver-based Renewal Funds—which invests in companies with positive social and environmental impact—and cleantech firms Cycle Capital Management and ArcTern Ventures, headquartered in Montreal and Toronto, respectively. Cycle Capital and Renewal Funds will receive $20 million, while ArcTern will receive $10 million. (The Logic)

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Talking point: Small Business Minister Mary Ng told The Logic that the government sought funds with a proven track record of investing in cleantech companies, which is why funds like Cycle Capital—which is trying to raise between $150 million to $250 million in a new fund—received the money, even though it’s Canada’s largest cleantech fund. At least two of the funds, including Cycle Capital, said they didn’t particularly need the money, however. Tom Rand, ArcTern managing partner, told The Globe and Mail that the fund didn’t need the money, but called it a seal of approval. Andrée-Lise Méthot, Cycle Capital founder and managing partner, also said it would be possible to hit its target without federal money. “The environmental impact is what we’re looking for. For [Cycle Capital], it’s to help them expand their fund size, and when they expand this fund size, it’s giving them greater capability to invest particularly in Canadian companies,” Ng told The Logic.