Quebec Accounts for Half of All Venture Capital Investments in Canada This Year

Founded in 1989, Réseau Capital has more than 425 members representing private equity, tax-advantaged and public investment companies as well as banks and insurance companies, accounting and law firms, and professionals working in the field.

Réseau Capital has released a new report from Thomson Reuters on the situation of venture capital in Quebec for the second quarter of 2012.

According to Thomson Reuters, venture capitalists raised around $683 millions in Q2, up from $154 million in the same quarter last year.  That's an increase of 344%. Quebec funding represented 52% of all funding in Canada for the first six months of 2012.

However, the level of investments remains weak according to the report.  Thus, the value of transactions shrank by 25%. In total, just 49 firms obtained funding, 23% less than in the second quarter of 2011.

For Geneviève Morin, copresident of Réseau Capital and Chief of Investments at Fondaction CSN, “It is more difficult to raise more money when investors are more risk averse.  Since the 2008 crisis, investors want more liquid assets.  With venture capital one has to make commitments for five to seven years.  We will have to make more efforts to increase our new funding from private investors.  VC have focus recently on raising new funds since they had few reserves. New investments should increase later on.”

Pension plans and companies tend to hesitate to invest in venture capital and the uncertainties with the economy don’t help, according to Mrs. Morin. Liquid assets seem more popular these days.

Photo: Flickr

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Louis Rheaume

Louis Rheaume

Mr. Rhéaume has the scholarity of a doctorate in business administration, concentration in strategic management, innovation management and corporate finance. He holds a Master’s degree in finance. He has numerous years of experience in consulting, strategy, financial analysis and business intelligence, mainly in the telecommunications and computing industries. He has also been a researcher in... more

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