What happened: Dollars raised by B.C. tech companies plunges during the third quarter
Why it matters: This comes after much of the economy ground to a halt in the second quarter as the pandemic’s impacts took hold
With much of the economy in limbo this past spring, the cascading effect of the pandemic appears to have walloped venture capital activity in B.C.
A new report from Hockeystick.co Inc., commissioned by SVB Financial Group, reveals West Coast companies raised $287 million during the third quarter of 2020.
That’s down 59% compared with the same period a year earlier when $696 million was raised.
Meanwhile, the number of funding rounds plummeted 72% to 23 rounds during the third quarter.
The province had tallied 82 rounds during the same period a year earlier.
Despite the significant dip in both dollars raised and funding rounds completed, the report authors conclude “the overall trend shows robust activity with no discernable impact of COVID-19.”
The Hockeystick.co Inc. data, released November 30, shows a consistent decline in funding rounds stretching back a year, when the aforementioned 82 rounds were completed.
That was followed by 64 rounds in Q4 of 2019, 50 rounds in Q1 of 2020, 40 rounds in Q2 of 2020 and 23 rounds during the latest quarter.
Fundraising appears to be more stable over the past year.
After $696 million was raised in Q3 of 2019, that was followed up by raises of $260 million and $246 million in Q4 2019 and Q1 2020, respectively.
During the second quarter of 2020, at the very outset of the pandemic, B.C. companies raised $390 million.
“COVID-19 has not slowed down deal activity in the region, but its impact can be seen in the types of companies raising funds,” the report states.
One such example is Vancouver-based Thinkific Labs Inc., which helps businesses and individuals create and distribute online courses, locking up $22 million in funding back in September.
Since the outset of the pandemic, course creation on Thinkific’s platform has surged 200%, and the company is tripling its headcount over the next 18 months by hiring 350 more tech workers to meet the demand.
The largest raise in B.C. last quarter came courtesy of Chinook Therapeutics Inc.
The life sciences company specializing in kidney disease brought in US$104m ($135 million) — accounting for nearly half the total deal value of the third quarter.
Altogether, the life sciences sector led fundraising with $150m, followed by fintech with $69 million and education technology with $29 million.
