Deloitte Ventures unveils exclusive report on the
state of Corporate Venture Capital in Canada
TORONTO, May 14, 2024
/CNW/ - A new report released today highlights that few
Canadian corporates are capitalizing on the significant opportunity
that venture capital investing presents. Only 6 per cent of
Canadian public companies generating over $1
billion CAD in annual revenue are investing and disclosing
their venture capital investments into companies, compared to
approximately 40 per cent of their counterparts in the United States. Moreover, report data shows
that Canadian corporates actively engaged in venture investing are
directing the majority of their investments abroad, and that most
Corporate Venture Capital (CVC) participation in Canadian startups
originated from international corporates.
In this report, Deloitte Ventures - Deloitte Canada's $150
million venture capital initiative - in collaboration with
BDC Capital, provides insights into the evolving landscape of CVC –
minority venture investments by public or private companies into
early or growth-stage companies – in Canada. This inaugural report covers the
period from 2019 to 2023, offering a detailed analysis of trends,
opportunities, and challenges in the Canadian CVC market.
"More engagement from Canadian corporates in venture capital can
yield a 'triple-win' for Canada, benefiting corporations,
start-ups, and the Canadian economy at large," says Talia Abramowitz, Managing Partner, Deloitte
Ventures. "Corporates can benefit financially as well as through
strategic insight and exposure to new technologies, markets, and
customers. Start-ups gain access to the resources, market
expertise, and brand power of large corporations and
simultaneously, the economy prospers as tech clusters generate job
opportunities, enhance productivity, and foster more innovative
solutions at competitive prices."
As highlighted in the report, corporate venture investing is an
integral part of a dynamic and maturing VC ecosystem. It has the
potential to foster and expedite the development of disruptive
technologies essential for business competitiveness, such as
artificial intelligence and advanced robotics, and can serve as a
strategic tool both for corporates and technology startups.
Harnessing VC to foster collaboration between technology start-ups
and the corporate sector will not only accelerate the development
of cutting-edge innovation, but also reinforce Canada's
technological advantage and propel the country's entire economy
forward.
This missed opportunity to use corporate venturing as a
strategic tool appears even more stark in specific sectors within
Canada, including those in which the country has a competitive
advantage. The report found that the majority of active Canadian
CVC funds over the past five years have a parent company in the
finance and insurance, media and telecom, or technology sectors,
while corporates in the energy, as well as the industrial and
manufacturing sectors, have been largely absent from the CVC
space.
At the core of this new report lies a profound belief that
striving for higher CVC participation by Canadian corporates would
positively impact and grow Canada's domestic technology ecosystem
and catalyze growth in the country's economy.
"CVC's impact goes beyond just boosting profits," adds
Talia Abramowitz. "It can also bring
invaluable innovations to its parent companies. By fostering new
ideas and technologies, a robust CVC unit strengthens the core
business, ensuring long-term resilience and prosperity."
To read more, including testimonials from CVCs and
recommendations for Canadian corporations to consider the untapped
potential of CVC investments, download the full report here.
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SOURCE Deloitte Canada