Réseau de capital de risque du Québec
“2007 Venture Capital Market Activity in Québec, Canada & the United States”
Kirk Falconer, Director of Research Thomson Financial Canada, February 12, 2008
2007 Venture Capital Market Activity in Québec, Canada & the United States
Across North America, venture capital (VC) deal activity grew appreciably in 2007 In the United States (US), 2007 activity hit a 6-year high In Canada, 2007 activity hit a 5-year high Québec based activity increased for 3rd year in a row, at highest level since 2002 However, fund-raising was up in the US, down north-of the border
2
Thomson Financial Canada for Réseau capital
Thomson’s Final Venture Capital Market Tally in North America in 2007
In the US: US$29.7 billion invested, +12% In Canada: CDN$2.1 billion invested, +21% In Québec: CDN$648 million invested, +8% In the US: $US34.7 billion in new funds raised, +9% Across Canada: CDN$1.2 billion in new funds raised, -27%
3
Thomson Financial Canada for Réseau capital
2007 VC Disbursements in the US Market Highest Since 2001
Dollars Invested in the United States, 2001-2007 (US$ BIL)
$45.0 $40.0
US$29.7 BIL BIL US$29.7 BIL US$29.7
$35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $2001 2002 2003 2004 2005 2006 2007
VC Disbursements
4
Thomson Financial Canada for Réseau capital
2007 VC Invested in Canada & Québec Last Seen in 2002
Dollars Invested in Canada & Québec, 2001-2007 (CDN$ BIL)
$4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $2001 2002 2003 2004 2005 Quebec 2006 2007
$648 MIL $2.1 BIL
Canada-W ide
5
Thomson Financial Canada for Réseau capital
Post-2004 Canada-US Market Trends Remain in Sync
Dollars Invested in Canada & the United States, 2001-2007 (CDN$, BIL)
$70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $2001 2002 2003 2004 2005 United States 2006 2007
Canada X 10
6
Thomson Financial Canada for Réseau capital
Steady Québec Increases Ensure Major Share of Canadian VC Activity
Dollars Invested in Québec & Rest of Canada, 2001-2007 (CDN$ BIL)
$4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $2001 2002 2003 2004 2005 Quebec 2006 2007
27% 31%
Rest of Canada
Thomson Financial Canada for Réseau capital
7
More Canadian VC Invested Spread Across Tech & Non-Tech Sectors
Dollars Invested in Canada, by Sector, 2004-2007 (CDN$ MIL)
$1,200
+20%
$1,000 $800
+23%
$600 $400
+11%
$200 $2004 IT 2005 Life Sciences Other Technology 2006 Non-Technology 2007
+25%
8
Thomson Financial Canada for Réseau capital
Québec Life Sciences, IT Drive 2007 Activity, Clean-Tech Makes Gains
Dollars Invested in Québec by Sector, 2004-2007 (CDN$ MIL)
$300
-3%
$250 $200 $150
+33% -1%
$100
+100%
$50 $2004 IT 2005 Life Sciences 2006 Non-Technology 2007
Other Technology
9
Thomson Financial Canada for Réseau capital
Top VC Deals Apply Upward Pressure on Québec Financing Sizes
Company
City
$CDN MIL Invested
Targanta Therapeutics Inc. Enobia Pharma Inc. Topigen Pharmaceuticals Inc. PainCeptor Pharma Corporation Vaperma Inc. BlueStreak Technology Inc. Tranzyme Pharma Inc. Coradiant Inc. Vantrix Corporation MOBIVOX Corporation
Saint-Laurent Montréal Montréal Saint-Laurent Saint-Romuald Montréal Sherbrooke Montréal Montréal Montréal
$82.2 $40.1 $26.0 $24.4 $21.5 $20.9 $19.0 $16.1 $13.0 $11.0 10
Thomson Financial Canada for Réseau capital
Expansions Key to Québec Trends, Seed & Startup Activity Drops Sharply
Dollars Invested in Québec, by Stage, 2001-2007 (CDN$ MIL)
$450 $400 $350 $300 $250 $200 $150 $100 $50 $2001 Seed 2002 Startup 2003 2004 2005 Expansion 2006 2007
Other Early-Stage
Other Late-Stage
11
Thomson Financial Canada for Réseau capital
Foreign Activity in Québec at New High, LSVCC-Retail, Private Fund Activity Also Up
Dollars Invested in Québec, by Investor Type, 2001-2007 (CDN$ MIL)
$300 $250 $200
25% 25%
32% 32%
$150
15%
$100 $50 $2001 Corporate 2002 Institutional 2003 Government 2004 Private 2005 Retail 2006 Foreign
15%
2007 Other
12
Thomson Financial Canada for Réseau capital
5th Year of Growth in US VC Fund-Raising, Canadian Pace Continues to Slow
New Capital Commitments, Canada & the United States 2001-2007 (CDN$, BIL)
$70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $2001 2002 2003 2004 2005 United States 2006 2007
Canada X 10
13
Thomson Financial Canada for Réseau capital
Québec Takes Lion’s Share of New Commitments, But Activity Also Dips
New Capital Commitments, Québec & Rest of Canada 2001-2007 (CDN$, BIL)
$5.00 $4.50 $4.00 $3.50 $3.00 $2.50
69% 49%
$2.00 $1.50 $1.00 $0.50 $2001 2002 2003 2004 2005 Quebec 2006 2007
Rest of Canada
14
Thomson Financial Canada for Réseau capital
Canadian VC-Backed Acquisitions & IPOs Up in 2007
VC-Backed IPO & M&A Exit Trends in Canada, 2001-2007
50 45 40
#37
35 30 25 20 15 10 5 0 2001 2002 2003 IPOs 2004 2005 2006 2007
#12
Acquisitions
15
Thomson Financial Canada for Réseau capital
2007 Venture Capital Market Activity in Québec, Canada & the United States
The data show North America-wide growth in VC deal activity in 2007 This points to a more integrated, cross-border market In Canada & Québec, domestic activity rose in 2007, but foreign activity key to VC flows Canada & Québec must address “Achilles’ Heel” in fund-raising Even foreign investors need sizeable VC funds at local level
16
Thomson Financial Canada for Réseau capital
17