Last week, Doug Schweitzer—Alberta’s minister of jobs, economy, and innovation—released a statement about record-breaking venture capital investments in Alberta in 2021.
Venture capital investment in Alberta continues to break records. Our province’s venture capital industry has had 3 straight years of incredible growth, with 2021 far outpacing 2019 and 2020 with a total of $561 million in deals. Compared with last year, overall venture capital investment into Alberta was up by 15.7% and the number of deals increased by 64.2%.
Now, none of this information is wrong, but there is some context, which when revealed makes Schweitzer’s announcement far less impressive.
Schweitzer’s information is based on Canadian Venture Capital and Private Equity Association’s annual report for 2021, which you can find here.
And while it’s true that Alberta saw $561 million in venture capital investment deals last year, let’s look at that number in comparison to the other provinces.
Canada, as a whole, saw $14.2 billion in venture capital investments in 2021, spread out among 751 deals. That means that Alberta accounted for 3.95% of the total value and 11.58% of the total number of deals.
Here’s how all the provinces fared:
|Province||Total value||Deals||Avg per deal|
|ON||$7.400 B||290||$25.5 M|
|BC||$2.900 B||105||$27.6 M|
|QC||$2.800 B||189||$14.8 M|
|AB||$0.561 B||87||$6.4 M|
|SK||$0.210 B||17||$12.4 M|
|NB||$0.126 B||20||$6.3 M|
|NL||$0.077 B||7||$11.0 M|
|MB||$0.057 B||8||$7.1 M|
|NS||$0.053 B||26||$2.0 M|
This table lists the provinces by total value, from highest to lowest. We see that Alberta had the 4th highest value of total venture capital investments in 2021. And that isn’t surprising. After all, it is the 4th most populous province.
What is surprising is that while their total value is the 4th highest, there’s a huge spread between Alberta and Québec, the third highest. Québec’s total value is 5 times greater than that of Alberta. And Ontario, which has the greatest total value, is more than 13 times higher than Alberta.
Alberta also ranks 4th for total number of venture capital deals, finishing 2021 with just under 90 deals. BC came in 3rd place, with 105. Québec had 189 deals and Ontario had 290, which is more than 3 times as many as Alberta had.
Even more striking than these gaps, however, is how Alberta ranks when we compare the average value per deal.
Last year, Alberta saw an average value of $6.4 million per deal. That puts them at 4th last among the provinces. Of the 6 provinces that had higher averages than Alberta, 5 of them saw averages above $10 million per deal. And two of them—Ontario and BC—saw averages greater than $25 million per deal.
That’s more than 4 times larger than what Alberta saw.
It gets worse.
Canada had a total of $4.4 billion in venture capital investments in 2020. Alberta saw $455 million of it. That’s about 10.3%.
So, while Alberta saw $106 million more in capital investments in 2021 than in 2020, they dropped from 10.3% of total investments within Canada to only 3.95%.
Not only that but in 2020, Alberta had an average of $8.9 million per deal, putting it in 3rd place, behind Ontario at $9.4 million and BC at $12.9 million. We dropped 4 spots last year.
And that’s not all.
Alberta’s jump from $455 million to $561 million was a 23.3% increase. However, that was the 3rd smallest increase.
Saskatchewan, the top ranked for size of increase, saw a 1300% increase in the total value of venture capitalist investment in 221.
Manitoba was the province just higher than Alberta, and they saw a 54.05% increase, which is more than double what we saw here in Alberta last year.
So, while it is true that venture capital investment did indeed increase in Alberta last year, they also increased across the country as a whole. I think the UCP government should maybe tone down the rhetoric that this increase was a result of UCP policies, rather than part of a general trend across the country.
In his statement last week, Schweitzer said the following:
“Alberta’s Recovery Plan has helped put our province back on a path to growth. I’m confident that we will continue to see even more private investment coming into the province this year.”
He should be really careful about taking responsibility for the growth in venture capital investments. Because if he takes responsibility for the extra $106 million in investments, he has to take responsibility for the 3rd slowest growth rate, too.