Backgrounder
In 2013, the Government of Canada announced the Venture Capital Action Plan (VCAP), a market-oriented approach to putting Canada's venture capital industry on the path to sustainability and increasing the availability of financing for innovative Canadian firms.
Through VCAP, the Government has invested:
- $340 million to establish four large, private sector-led funds-of-funds (Northleaf Venture Catalyst Fund, Teralys Capital Innovation Fund, Kensington Venture Fund and HarbourVest Canada Growth Fund)
- $50 million directly in four existing high-performing Canadian venture capital funds
(Lumira Capital II, Real Ventures III, CTI Life Sciences II and Relay Ventures III)
Under VCAP, the Government's investment of $390 million has attracted significant investments in the venture capital industry in Canada. In particular, the four VCAP funds-of-funds attracted investments from a diverse set of investors that included pension funds, high-net-worth individuals, corporations, banks, and the governments of Ontario and Quebec. Including the federal government investment, the four funds-of-funds raised $1.356 billion. Of that total, $904 million came from private sector investors. Canadian-based sources account for 95 percent of the capital, while 5 percent was from American and European investors.
In total, investments under VCAP have to date translated into $993 million committed to 33 Canadian fundsFootnote 1. Further, the 310 Canadian companies that the VCAP program has invested in have received a combined $1.65 billion in capital.
VCAP aims to make Canada's venture capital industry more globally competitive, while ensuring that Canada's high-potential firms have the resources they need to grow and create jobs.
Key VCAP Metrics
Section 1: VCAP Funds-of-Funds Program Overview
Metrics in this section relate to the activities associated with the four VCAP funds-of-funds.
VCAP Funds-of-Funds Fundraising
Fund-of-Fund | Raised Capital |
---|---|
Northleaf Venture Catalyst Fund | $300 million |
Teralys Capital Innovation Fund | $375 million |
Kensington Venture Fund | $306 million |
HarbourVest Canada Growth Fund | $375 million |
The four funds-of-funds raised $1.356 billion from public and private sector investors, including approximately $340 million from the Government of Canada.
Chart 1: Type of Investors Participating in VCAP
NumberFootnote 2 of Investors | Total Commitments (C$M) | % of Total | |
---|---|---|---|
Canada (private sector) | 24 | 838.5 | 62% |
Canada (public sector) | 3 | 452.0 | 33% |
Europe | 2 | 18.0 | 1% |
U.S. | 1 | 47.5 | 4% |
Grand Total | 30 | 1,356.0 | 100% |
Portfolio Allocation Across the Four Funds-of-Funds
Total Commitments (C$M) | % of Total | |
---|---|---|
Direct Investments in Canadian Companies | 171 | 85.1% |
Direct Investments in non-Canadian Companies | 30 | 14.9% |
Total Direct Investments in Companies | 201 | 100.0% |
Commitments to Canadian FundsFootnote 3 | 943 | 84.5% |
Commitments to non-Canadian Funds | 173 | 15.5% |
Total Fund Commitments | 1,116 | 100.0% |
Funds-of-Funds Commitments to Canadian VC Funds
Location of Fund Manager HQ | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Total | C$M | % of Total | |
BC | 8 | 27% | 167.0 | 18% |
AB | 2 | 7% | 20.1 | 2% |
SK | 0 | 0% | 0.0 | 0% |
MB | 0 | 0% | 0.0 | 0% |
ON | 14 | 47% | 554.2 | 59% |
QC | 6 | 20% | 201.9 | 21% |
NL | 0 | 0% | 0.0 | 0% |
NB | 0 | 0% | 0.0 | 0% |
NS | 0 | 0% | 0.0 | 0% |
Total | 30 | 100% | 943.2 | 100% |
Primary Stage Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Total | C$M | % of Total | |
Seed | 4 | 13% | 61.6 | 7% |
Early Venture | 15 | 50% | 462.2 | 49% |
Late Venture | 3 | 10% | 89.8 | 10% |
Growth Equity | 8 | 27% | 329.6 | 35% |
Total | 30 | 100% | 943.2 | 100% |
Primary Sector Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Grand Total | C$M | % of Grand Total | |
Energy & Cleantech | 5 | 17% | 89.8 | 10% |
ICT | 19 | 63% | 676.9 | 72% |
Life Sciences | 6 | 20% | 176.5 | 19% |
Grand Total | 30 | 100% | 943.2 | 100% |
Financial Returns
(C$, 000s) | Amount Committed to VCAP Funds-of-funds | Capital CalledFootnote 4 | % Called | Cash DistributedFootnote 5 | Fair ValueFootnote 6 | Total ValueFootnote 7 | Total Value To Paid-InFootnote 8 |
---|---|---|---|---|---|---|---|
Funds-of-funds | 1,356,000 | 829,614 | 61.2% | 105,732 | 962,030 | 1,067,762 | 1.29x |
Section 2: VCAP High-Performing Venture Capital Funds Program Overview
Metrics in this section relate to the activities associated with the four high-performing venture capital funds, which together received a commitment of $50 million under VCAP.
Commitments to High-Performing Funds
Fund | Committed Capital |
---|---|
Lumira Capital II | $10 million |
Real Ventures III | $10 million |
CTI Life Sciences II | $15 million |
Relay Ventures III | $15 million |
Primary Stage Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Total | C$M | % of Total | |
Seed | 1 | 25% | 10 | 20% |
Early Venture | 2 | 50% | 30 | 60% |
Late Venture | 1 | 25% | 10 | 20% |
Growth Equity | 0 | 0% | 0 | 0% |
Total | 4 | 100% | 50 | 100% |
Primary Sector Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Grand Total | C$M | % of Grand Total | |
Energy & Cleantech | 0 | 0% | 0 | 0% |
ICT | 2 | 50% | 25 | 50% |
Life Sciences | 2 | 50% | 25 | 50% |
Grand Total | 4 | 100% | 50 | 100% |
Note: One of the high-performing funds was also supported by a fund-of-funds; therefore, a total of 33 funds have received funding under VCAP. |
Financial Returns
(C$, 000s) | Amount Committed | Capital CalledFootnote 4 | % Called | Cash DistributedFootnote 5 | Fair ValueFootnote 6 | Total ValueFootnote 7 | Total Value To Paid-InFootnote 8 |
---|---|---|---|---|---|---|---|
High performing funds | 50,000 | 35,674 | 71.3% | 3,968 | 46,736 | 50,704 | 1.42x |
Section 3: Overall VCAP Program Overview
Metrics in this section relate to the overall activities associated with the four VCAP funds-of-funds and the four high-performing venture capital funds that received VCAP investment.
Commitments to Canadian Venture Capital Funds
Primary Stage Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Total | C$M | % of Total | |
Seed | 5 | 15% | 71.6 | 7% |
Early venture | 16 | 48% | 482.2 | 49% |
Late venture | 4 | 12% | 109.8 | 11% |
Growth equity | 8 | 24% | 329.6 | 33% |
Total | 33Footnote 1 | 100% | 993.2 | 100% |
Primary Sector Focus | Number of Funds | Total Commitments | ||
---|---|---|---|---|
# | % of Grand Total | C$M | % of Grand Total | |
Energy & Cleantech | 5 | 15% | 89.8 | 9% |
ICT | 20 | 61% | 701.9 | 71% |
Life Sciences | 8 | 24% | 201.5 | 20% |
Grand total | 33Footnote 1 | 100% | 993.2 | 100% |
Investments in Canadian Companies
Total invested in Canadian companies up to December 31, 2018 was $1.65 billion. This includes investments by High-Performing Funds, Funds-of-funds, and underlying funds.
Location of Company HQ | Number of Companies | |
---|---|---|
# | % of Total | |
BC | 33 | 11% |
AB | 16 | 5% |
SK | 5 | 2% |
MB | 3 | 1% |
ON | 150 | 48% |
QC | 92 | 30% |
NL | 0 | 0% |
NB | 2 | 1% |
NS | 9 | 3% |
Total | 310 | 100% |