Yesterday, Danielle Smith—Alberta’s newest premier—sent out the following tweet regarding venture capital investments in Alberta in the second quarter of 2022.
That tweet was then retweeted by Tyler Shandro, Alberta’s minister of justice; Becca Polak, Smith’s press secretary; Pat Rehn, UCP MLA for Lesser Slave Lake; and Roy Dallmann, a policy advisor for the minister of jobs, economy, and northern development.
Similar tweets were sent out earlier in the week by Brian Jean, minister of jobs, economy, and northern development . . .
. . . Michael Kwas, communications officer for the UCP caucus.
Plus, the UCP government posted an update on their website bragging about Alberta’s record-breaking year in venture capital investments, saying stuff like
Alberta had its best fourth quarter on record with $220 million invested into tech companies across 85 deals.
and
The 30% increase in year-over-year values is in stark contrast to Canada as a whole, which saw a decline in venture capital dollars invested of nearly 30 per cent.
and
Due to the rapid year-over-year growth, Alberta is now capturing 12% of the venture capital invested in Canada.
And none of it’s wrong. But it’s missing some important context.
For example, it’s not that surprising that we have record-breaking investments. We just went through skyrocketing inflation last year. Everything costs more, which means you’re going to have to invest more now than you had to a year ago just to get the exact same return.
Also, Alberta’s population of 4.6 million people accounts for 11.7% of the country’s population of 39.3 million people (or 12% if you want to round up). So, I would really hope that they’d be capturing at least 12% of the venture capital market.
All the information the UCP are sharing and celebrating is based on Canadian Venture Capital and Private Equity Association’s fourth quarter report for 2022, which you can find here.
Let’s take a look at how Alberta’s deals compare to the rest of the country.
| Total investment | Total deals | Avg invest. per deal | |
|---|---|---|---|
| ON | $4.700 | 293 | $0.016 |
| QC | $2.500 | 153 | $0.016 |
| BC | $1.600 | 106 | $0.015 |
| AB | $0.729 | 85 | $0.009 |
| NS | $0.149 | 23 | $0.006 |
| SK | $0.136 | 18 | $0.008 |
| MB | $0.101 | 4 | $0.025 |
| NB | $0.066 | 14 | $0.005 |
| NL | $0.011 | 8 | $0.001 |
| PEI | $0.004 | 2 | $0.002 |
Alberta had the fourth highest total in venture capital investment last year, which shouldn’t be that surprising, given that we also have the fourth largest population in the country.
The only provinces with more investment are the 3 provinces with larger populations—Ontario, Québec, and British Columbia—and in order of population size.
However, when we look at the average investment per deal, Alberta drops to fifth place. Their average of just $9 million per investment falls behind Manitoba’s $25 million; Québec and Ontario, which are both tied at $16 million per deal; and BC, which came in at a $15 million average.
Oh, and that “12% of the venture capital invested in Canada” figure? That’s only partially true. You see, it refers to the number of deals, not the total amount invested.
There were 706 venture capitalist deals made in Canada last year, as you can see above, Alberta took in 85 of them. That’s 12.04%.
However, Alberta’s total investment of $729 million is only 7.29% of the nearly $10 billion invested across the country.
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