Thomson Reuters released numbers on VC’ing in Québec

It’s good and ok. Not incredible or great.

Venture capital (VC) market activity in Québec resumed a steady course in the third quarter of 2012, with dollar flows dipping year over year, but improving relative to earlier quarters in 2012. According to Thomson Reuters, a total of $112 million was invested in this period, or a slight 2% below the $114 million invested in Q3 2011. Disbursement levels in Q3 2012 nonetheless registered growth of 9% compared to Q2 2012. However, deal-making involved fewer Québec-based firms, or 26 in total, which is down 55% from the year before.

Due to more sharply reduced VC activity in both Q1 2012 and Q2 2012, Québec-based market trends in the first nine months of the year continued to track behind market trends in 2011. As of September 30th, a total of $268 million was invested in 109 companies, down 26% from the same time last year.

Québec-based VC market activity in Q3 2012 was broadly in line with trends elsewhere in North America. Disbursement levels across Canada, totaling $363 million in this period, fell a moderate 6% from the same time in 2011, while activity in the United States declined 12%, with US$6.4 billion invested in total.

Québec accounted for 31% of all disbursements in the Canadian VC market in the third quarter of 2012. This is up from the 21% averaged in the first half of the year, and is more consistent with the share that has typically been assumed by Québec in recent years.

Several major VC deals were done in Québec between July and September, including a US$35 million financing of the Montréal headquartered biopharmaceuticals firm Thrasos Innovation, Inc. Such deals helped to raise amounts invested per firm, which averaged $4.3 million in Q3 2012, well up from $2.0 million in Q3 2011, and from $1.8 million in Q3 2010.

Deal-making in Québec’s life sciences sectors returned to the fore in the third quarter of 2012, with $51 million invested, or better than double amounts invested one year ago, and accounting for 46% of all disbursements. Information technology sectors saw $23 million invested this time around, or 21% of the total, though activity was down 42% year over year. In contrast, non-technology sectors attracted $24 million in Q3 2012, up 52%.

Foreign VC funds were more active in the Québec market in the third quarter of 2012, bringing $28 million to deals, which is up 38% from the same time last year. Locally-based investors were in this period led by private-independent funds, labour-sponsored and other retail funds, and institutional funds. However, taken together, domestic funds were less active in Q3 2012, investing a total of $83 million, or 11% below their previous deployments.

In contrast with the first and second quarters of 2012, Canadian VC fund-raising slowed to a crawl in the third quarter, with new commitments to domestic VC funds totaling $42 million, or a mere fraction of the $365 million committed in Q3 2011. However, due to more robust trends earlier in the year, fund-raising as September 30th totaled $1.5 billion, which already exceeds the $1.0 billion reported by Thomson Reuters for the entire of 2011.

VC fund managers headquartered, or with a substantial presence, in Québec remained key to increased Canadian fund-raising activity in the first nine months. Québec-based funds netted 51% of total new commitments over this period, or $766 million.

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