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Canadian venture industry may be over the worst, new figures suggest

Investment activity in Canada's venture capital industry increased in the third quarter of 2003 compared to the two previous quarters, according to the latest industry statistics released by Macdonald & Associates and the Canadian Venture Capital and Private Equity Association (CVCA).

Venture capital investment rose to $361m from $238m in the second quarter of the year, but investment levels remain significantly lower than in the corresponding quarter of 2002, when $563m was invested.

‘Investment activity in 2003 continues to be low compared to last year, as measured by the total amount invested and also as measured by the average deal size,' said Dr Robin Louis, president of the CVCA. ‘However, an optimistic view of the investment activity for the past three quarters is that the decline has slowed or stopped and this may indicate that we are at, or near, the trough of investment activity.'

Fundraising conditions in the Canadian venture capital industry have also been tough. Just $150m was raised in the third quarter of 2003, and only $1.3bn has been raised in 2003 to date. New commitments to Canadian venture funds remain a long way off 2002 levels of $3.2bn.

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