B.C. venture capital takes a hit as investments drop by $1B since start of 2022

Market volatility, inflation and interest rate pressures taking toll, says report

Intelligent City's robotics systems at work at its plant in Delta, B.C. The construction firm was responsible for B.C.'s biggest cleantech venture capital deal during the first half of this year, according to a new CVCA report | submitted

Venture capitalists appear to be losing interesting in B.C. as new data shows investments in the province have dropped by $1 billion over the past year.

West Coast firms managed to draw $807 million in venture capital during the first six months (H1) of 2022 — down from $1.83 billion during the same period in 2021, according to a report released Thursday by the Canadian Venture Capital and Private Equity Association (CVCA).

Despite the big drop in dollar amounts, the province was home to 58 venture capital deals during H1 of 2022 compared with 66 in H1 of 2021.

Those venture capital deals were substantially larger last year, averaging $27.7 million compared with $13.9 million in 2022.

B.C. isn’t alone, though.

The CVCA report reveals venture capital investments across Canada dropped from $8.3 billion in H1 2021 to $6.2 billion during the same period this year.

“[General partners] are taking a cautious approach, deploying dollars more slowly and rethinking strategy,” Kim Furlong, CEO of the CVCA, said in the report. 

“The fundraising environment has shifted slightly. While institutional investors are staying the course, family offices, high-net-worth individuals, who have seen their public portfolio value decrease, are treading lightly.”

She said those same trends are occurring globally as market volatility, inflation and interest rate pressures take their toll on investments.

Meanwhile, the report notes that Vancouver-based crypto firm Layerzero Labs Ltd. was responsible for the biggest venture capital deal so far this year in B.C., raising $135 million in in March to reach unicorn status (a valuation of $1 billion or more).

B.C. was also home to the largest investment in cleantech in Canada, with robot-powered construction firm Intelligent City Inc. closing a $22 million seed round.

Fintech MeetAmi Innovations Inc. was responsible for B.C.’s biggest seed round, raising $36.5 million back in April.