Venture capital market Canada's venture capital investment has been reshaped by COVID-19, focusing in large part on biotechnology and ways to combat the virus.

"While market uncertainty has slowed overall investment in the Canadian sector, funds continue to flow to firms developing technologies to combat the impacts of the coronavirus," says Sunil Mistry, partner, Private Enterprise and Technology, Media & Telecommunications, KPMG in Canada.

Top transactions deal with pandemic

"The fact that three of the top transactions this quarter were related to the pandemic further highlights how important it is that we develop solutions to combat the virus."

These three deals include:

  • $142 million in financing for Vancouver-based Abcellera, a biotech firm that researches and develops human antibodies to address pandemics and common diseases

  • $81 million deal for Ventus Therapeutics, a Montreal-based company that develops medicines that target immune systems, and

  • $68 million offering for WorkJam, also out of Montreal, to further grow its digital platform for front-line workers.

"The reality is, developing a vaccine against COVID-19 is one of the most important business issues facing our economy so it is encouraging to see investments going to Canadian start-ups in the space," adds Mistry.

Canada needs to supply its own medical needs

He notes that the pandemic has highlighted some hard lessons on the critical need for Canada to supply its own medical needs in time of crisis and that this should spur additional private and public investment in the sector.

He notes that while the quarter has yet to close, overall investment in the sector looks to be down about 30 per cent from the first quarter, a trend seen around the world.

Foreign capital is down, but domestic investment has remained steady.

“Canadian funds continue to take an active role in the sector while global investors are finding new ways to meet virtually to complete transactions."