SAINT JOHN – The province’s private sector companies recorded new highs in 2016 in venture capital investment and capital raised by publicly traded companies, according to a new report issued by the Finacial and Consumer Services Commission.
Venture capital firms invested $31.04-million in local companies across 31 deals, the highest amount in any of the past five years.
Publicly traded companies raised $103-million, topping the previous high of $78-million in 2013.
Jeff Harriman, FCNB’s senior analyst of capital markets, said the numbers are a testament to growing strength of the province’s entrepreneurs.
“The amount of venture capital investments in the province is a direct indicator of the strength of our start-up entrepreneurial eco-system and the ongoing development of these companies,” said Harriman in a release. “The average size deal has continued to grow, with the average deal in 2016 at $1-million compared to $780,000 in 2015.”
The Information and Communications Technology (ICT) industry continues to attract the majority of venture capital deals, says the report, accounting for 77 per cent of the 2016 total.
The venture capital investments in later- and expansion-stage companies trend upward, accounting for 65 per cent of the total capital raised. Early stage investments from 2016 exceeded the 2015 total, reaching $9.67-million.
The province’s public companies were very active in 2016 compared to the year before, with $102.65-million in total capital raised using both the public and private markets. Of the $96.65-million raised through public markets, $73.64-million was raised by a health-care firm and $23.01-million by a real estate firm. The real estate firm raised an additional $6-million through the exempt markets.
Harriman says the ways of raising money are also changing across the province, with the opportunity to secure investment through grassroots online platforms.
“New Brunswick companies are adopting various alternative methods of financing their operations, including using platforms such as Kickstarter,” says Harriman. “We will continue to follow these new or alternative methods of financing. Future reports will also focus on equity crowdfunding and usage of the Community Economic Development Corporation program.”