MoneyTree-PwC report: VC-backed deals up in Q2 as interest in AI soars

The venture capital community in Canada was upbeat in the second quarter of the year, investing in 116 deals from 112 in the first quarter. But the value of investments dropped by 7% to only US$900 million compared to the first quarter. Still, the latest MoneyTree report by PwC Canada and CB Insights noted a strong first half as VC investors showed keen interest in artificial intelligence (AI), and mobile and telecom companies. Investments in AI companies jumped 104% in the second quarter involving 13 deals valued at $169 million, for an all-time high, setting the pace for a record year, the report said. But mobile and telecom companies saw the biggest funding increase at 167% at $186 million for 13 deals. Fintech companies saw a 10% decline in funding -- the second quarter of decline -- attracting only $79 million. But deals were up to 13 compared to only eight in the first quarter. As to deal stages, the quarter also saw an increase in both seed-stage and later-stage funding. Investment activities in companies in Quebec and Calgary were “dramatically” up. Quebec saw an increase in funding to $147 million for five deals compared to only one deal in the first quarter valued at $8 million. Eight deals in Calgary attracted $99 million compared to only $900,000 across three deals in the first quarter. But Toronto remains the leader in attracting VCs, which invested $290 million across 33 deals. This, however, was a decline of 11% from the previous quarter.  Vancouver and Montreal were the other notable cities that were interesting to VCs. VC  investments in Vancouver reached an eight-quarter high with 28 deals valued at $126 million for a 21% increase. Montreal saw 16 deals, from 17 last quarter, and a decline in value by 74% to $103 million from $389 million. Among Canadian companies, the most active investors during the quarter were BDC, Real Ventures, Export Development Canada, and 500 Startups.