(July 7 – 09:20 ET) – Canada’s venture capital industry reached record investment highs in the first quarter of 2000, continuing its momentum from late 1999.

By the end of the first quarter of 2000, total disbursements reached $1.1 billion, up 88% from the first quarter of 1999, and surpassing the fourth quarter record high by 12%.

Follow-on financings accounted for 68% of the deals done and 76% of the total disbursements. The average size of financing has climbed to $3.1 million from $2.7 million in 1999.

Technology deals led the way. Tech deals accounted for more than 83% of all investments and over 89% of the total disbursements in the first quarter.

By comparision the U.S. venture capital industry is running even stronger. According to Venture Economics, U.S. investments are up 266% over the first quarter of 1999, with US$22.7 billion disbursed. The average size of financing in the U.S. has more than doubled to US$14.57 million as compared to the first quarter of 1999.

“Venture capital investing in Canada has grown at a remarkable rate, but this growth is nowhere near its potential and is far eclipsed by our neighbours to the south,” says Ron Begg, president, Canadian Venture Capital Association.

“Canada’s venture funds must accelerate the rate at which new capital is raised in order to deploy the funds to our entrepreneurs. This will give them the edge they need to compete toe-to-toe with their U.S. counterparts that are backed by huge U.S. venture funds.”
-IE Staff