Canada Venture Capital sector shows signs of recovery

Investment in venture capital jumped 57 percent in Canada in the second quarter of 2010, the first substantial increase in funds allocated to the struggling sector in over two years.

According to a press release from the Canadian Venture Capital and Private Equity Association (CVCA) and data compiled by Thomson Reuters, $334 Million was invested in the quarter, up from $213 Million a year earlier.

So-called “exits,” where investors exit from investments through a sale to another company or by going public, showed strength in mergers and acquisitions but relative weakness in initial public offerings. The CVCA said 21 Canadian companies were acquired for an average disclosed deal size of $116 Million in the first half of the year.

That puts Canadian companies on pace for 42 M&A exits this year, exceeding the 24 M&A exits which occurred in each of 2008 and 2009.