Q-News
February 2010
Posted in Mike's Commentary
We ended 2009 with another disappointing month and
January’s results were basically flat year-over-year, which is not a good thing
when we reflect on the state of the market 12 months ago. Nonetheless, we do see positive signs in the
fact that so many different VC investors took part in transactions. In December, we saw investments from BDC,
Propulsion Ventures, The Solidarity Fund QFL, Yaletown Venture Partners and the
New Brunswick Innovation Foundation while January saw announcements from
Wellington Financial, JLA Ventures, Tech Capital Partners, Ontario Emerging
Technologies Fund, BDC, Growthworks (Atlantic Venture Fund and Canadian Fund),
Ventures West, Pangaea Ventures, First Leaside and Ontario’s Investment Accelerator Fund.
What continues to be of great concern is the number of
Canadian VCs that are investing in US companies while Canadian technology
companies continue to face so many challenges when trying to attract capital. I still have trouble believing that there are
not enough good Canadian companies looking for capital. During December, we saw iNovia Capital make
two investments in US companies, MMV made one, and Celtic House Venture
Partners and Edgestone Capital Partners made a follow-on investment in Ireland-based
RedeMere. January also saw Wellington
Financial make one investment in a US company while MMV Financial made
two.
M&A activity appears to be picking up and we would
expect 2010 to be a strong year with ongoing industry consolidation, a level of
stability around valuations, and generally a more positive attitude in the
markets about the future. During the
past two months, a number of interesting M&A transactions were reported,
particularly cross-border transactions in which Canadian companies were
acquired by companies from the US, Sweden and Australia while Canadian
technology companies acquired companies in the UK, Hong Kong and the
Netherlands.
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