Exchange Insights from TSX and TSXV

Venture capital returns

Investment in Canada’s venture capital industry has reached its HIGHEST LEVEL since 2006

Venture capital returns

According to Canada’s Venture Capital & Private Equity Association (CVCA), investment activity in Canada’s venture capital (VC) industry has accelerated since 2011, reaching its highest level since 2006. And in a reversal of a five-year trend, venture capital investment in the information technology sector increased by 6% in 2012. Six Canadian deals were among the top 30 VC deals in North America.

“During the past 10 years, the domestic venture capital industry has been going through a significant transformation,” says Peter van der Velden, CVCA President. “This has led to the engagement of significant corporate and strategic investors in the Canadian market,” he says, “and to more experienced general partners.”

These developments correspond with the objectives of Toronto Stock Exchange (TSX) and TSXV and, in particular, TSXV’s CPC program, which encourages experienced corporate investors and managers to raise capital and provide expertise for emerging businesses. Over 30% of the companies listed on TSX in the Innovation sectors (Technology, Clean Technology and Life Sciences) are also graduates of TSXV. Of the 40 new issuers listed on TSXV in the first quarter of 2013, 30 emerged from the CPC program.

“TMX Group has a strong history of supporting and partnering with the leading VCs in Canada and the U.S. to enhance funding and incubation for Canadian start-ups,” says Tom Kloet, CEO of TMX Group, “And TSXV is the only public venture capital exchange of this size and scope in the world.”

To encourage interaction between the capital markets, the venture capital, and private equity communities, TMX Group co-hosts an annual Toronto Stock Exchange/CVCA Technology Investor Day. With presentations from five private companies and five public companies in the technology sector, this event attracts Canadian and U.S. investors with the goal of raising institutional and VC investment dollars, and enhancing the capital ecosystem for technology companies in Canada.

These events serve to build bridges between entrepreneurs and the capital markets,” says Kloet, “so they’ll better understand our platform, and how and when to use it for growth.

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