Canadian startups, one of Asia’s top choices for capital investment

Leading venture capital firms in China and Hong Kong are circling the globe to find the best investment deals. A popular stop on their tour is Canada.

Horizons Ventures, Hong Kong’s largest venture capital (VC) firm, has already invested in several Canadian startups. In fact, Canada stands third, next to United States and Israel, in terms of the number of international deals the fund has signed. Focused on the health and cleantech sectors, Horizons works with MaRS Venture Services and MaRS Investment Accelerator Fund (a seed fund managed by MaRS) to identify investment opportunities, and take advantage of the high-calibre, reputable startups based in Canada.

Horizons’ relationship with MaRS is a model for other Chinese angels and VC firms interested in the Canadian startup market. The Canadian Chinese Angel Alliance (CCAA), operated by River Capital (Beijing), comprises 28 prominent Chinese angels who invest in both Canadian and Chinese companies, with investments ranging from $50,000 to $8 million per deal. In Ontario, they have invested in 17 ventures, including Viafoura, Blitzen, ExpertFile and Arrowonics.

What’s creating the buzz?

• Asia’s slowing economy. China’s currency devaluation and economic slowdown are encouraging venture capitalists to seek investments abroad in order to diversify their portfolios.
• International product gaps. Canadian ventures are filling market gaps overseas with innovative products and services that translate globally.
• Poor environmental records. In the cleantech sector, China’s growing environmental crisis offers an opportunity for Canadian green companies.
• Toronto values diversity. Many Canadian CEOs, such as Kerry Liu of Rubikloud and Gimmy Chu of Nanoleaf, are Chinese-Canadian.
• New partnerships. In 2015, during the Ontario government’s international mission to Asia, Cyberport Hong Kong and MaRS formed a partnership to identify business acceleration opportunities for ventures from both hubs, relying on MaRS’ strong reputation for talent curation.