Co-investment in the Canadian venture capital landscape

Co-investment in the Canadian venture capital landscape

Networks are a hot topic these days. With new and better ways of visualizing and analyzing data, it is easier than ever to take a network view of almost any kind of activity. The MaRS Data Catalyst team is lucky enough to have some venture capital data and we thought it would be interesting to apply some analysis to see what would emerge.

Do venture capitalists co-invest regularly? What are some trends that emerge?

The data for this analysis comes from Thomson ONE, a database that tracks private equity deals. Narrowing our focus to venture capital firms that invest in Canadian-based companies, we chose to capture only seed- and early-stage investments [see note 1 below]. We began by gathering just over 10 years of data (from January 1, 2003, to February 28, 2013).

What this data gave us was a pool of 382 disclosed firms [see note 2] that had invested in 1,014 companies in 2,081 deals [see note 3] and $2.36 billion in disclosed and estimated equity [see note 4]. Other factors that came in handy included whether or not an investment made by a firm was a new or follow-on investment and the industry of the company that received the investment.

More findings to come over the next few weeks!

Over the next three weeks, we’ll be running a series of posts on the MaRS Data Catalyst website that takes an in-depth look at all of the data we were able to analyze that really examines the trends and patterns in venture capital investment in Canada.

Here are a couple of quick highlights from our analysis. If you’re interested in more visualizations and further discussion about the data and what it means, stay tuned to the MaRS Data Catalyst website.

Additionally, you can click here to view an interactive visualization developed for us by Gabe Sawhney, a local data designer, that shows all of the venture capital firms for the entire 10-year timeframe that we considered. You can click, drag and move various nodes to see which firms have co-invested with which companies and make your own analysis using the resulting data.

Who are the top co-investors?

This question can be answered by measuring the number of co-investments a venture capital firm has made. Using that yardstick, which companies do we get?

Top five active firms by number of co-investments [see note 5]

Venture capital firm name

Number of deals that are co-investments

Average total deal size ($m CAD)

Total number of deals (both co-investment and single investment)

Most recent new investment

Business Development Bank of Canada




January 2013

GrowthWorks Capital Ltd.




December 2012

Desjardins Venture Capital Inc.




November 2012

Fonds de Solidarité des Travailleurs du Quebec




November 2012

iNovia Capital Inc.




March 2013

Source: Thomson ONE: January 1, 2003 to February 28, 2013.

There is a problem, however, with this kind of ranking. The top co-investors are also the top investors over that time period. In other words, yes, the top investor is the Business Development Bank of Canada, but by the law of averages it is no surprise they are also then the top co-investor.

Digging a little deeper, we wondered which groups of firms co-invested together the most frequently. In this case, we compiled all possible combinations into a list. Once the list was generated, we obtained the top five “love affairs,” which we presume are still active.

Top number of firm pairs in Canadian-based companies [see note 6]


Firm 1


Firm 2


Number of deals together


Collective number of deals
% of deals together when compared to the collective number of deals
GrowthWorks Capital Ltd.
Business Development Bank of Canada
Desjardins Venture Capital Inc.
Business Development Bank of Canada
Desjardins Venture Capital Inc.
Fonds de Solidarité des Travailleurs du Quebec
Business Development Bank of Canada
Fonds de Solidarité des Travailleurs du Quebec
GrowthWorks Capital Ltd.
Ventures West Management Inc.
Business Development Bank of Canada
iNovia Capital Inc.
GrowthWorks Capital Ltd.
Yaletown Venture Partners Inc.
Export Development Canada
Business Development Bank of Canada
GrowthWorks Capital Ltd.
VentureLink Funds
Chrysalix Venture Capital
Business Development Bank of Canada


Out of the collective number of deals, the number of deals that any two firms actually do together are relatively small, peaking at just over 10% (GrowthWorks and Business Development Bank of Canada) to a little less than 2% (Chrysalix and—you guessed it—the Business Development Bank of Canada).

It is possible to infer from this information that Canadian venture capitalists are not “cliquey” or “clubby”—that is, they do not appear to prefer some firms over other firms when co-investing, a fact that has previously been mentioned by others.

Over the next three weeks, we’ll be discussing our rationale and methodology, as well as looking at “the loyalty score,” which we describe as the measure of repeat co-investment behaviour among venture capitalists in Canada. Be sure to check out the MaRS Data Catalyst site for more visualizations and analysis, and feel free to leave your comments or questions there as well.


[1]. Thomson ONE defines seed-stage investment as an investment strategy involving portfolio companies that have not yet fully established commercial operations and that may also involve continued research and product development. It defines early-stage investors as funds that make a majority of their investments in companies that have product development, initial marketing, manufacturing and sales activities already in testing or production. Companies use these early-stage investments to begin production and sales. In some cases, the companies’ products may have just been made commercially available. These companies may not yet be generating profits. The companies may be in the process of organizing or they may already have been in business for three years or less. Such firms will usually have completed market studies, assembled a key management team and developed a business plan, and are ready to start or have already started conducting business.

[2]. Not all firm names in venture capital deals are disclosed. In some cases, the firm names are disclosed, but the dollar amounts of the deal are not.

[3]. Venture capital firms may invest more than once in the same company (as a “new” or “follow-on” investment).

[4]. Thomson Reuters will, in some cases, estimate the amount of equity invested based on information available to them. In other cases, the amounts will be fully disclosed to Thomson Reuters.

[5]. Source: Thomson ONE: January 1, 2003, to February 28, 2013: Canadian firms, filtering on seed and early stage. Some investments were made in companies that Thomson ONE reports to have a head office in Ontario, but whose business descriptions indicate they are based in the United States.

[6]. Op. cit.