Last week, Doug Schweitzer—Alberta’s minister of jobs, economy, and innovation—tweeted about record-breaking venture capital investments in Alberta in the first quarter of 2022.
Now, none of this information is wrong, but there is some context, which when revealed makes Schweitzer’s tweet far less impressive.
Schweitzer’s information is based on Canadian Venture Capital and Private Equity Association’s first quarter report for 2022, which you can find here.
And while it’s true that Alberta saw record venture capital investment during the first quarter of this year, let’s look at that number in comparison to the other provinces.
Canada, as a whole, saw $4.5 billion in venture capital investments in the first quarter of 2022, spread out among 196 deals. That means that Alberta accounted for 10.3% of the total value and 13.3% of the total number of deals.
Here’s how all the provinces fared:
| Total value | Deals | Avg per deal | |
|---|---|---|---|
| ON | $2,300 M | 86 | $26.7 M |
| QC | $1,100 M | 39 | $28.2 M |
| BC | $485 M | 25 | $19.4 M |
| AB | $466 M | 26 | $17.9 M |
| SK | $107 M | 6 | $17.8 M |
| NS | $42 M | 6 | $7.0 M |
| NB | $19 M | 4 | $4.8 M |
| NL | $3 M | 2 | $1.5 M |
| MB | $1 M | 2 | $0.5 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 second highest. Québec’s total value is more than double that of Alberta. And Ontario, which has the greatest total value, is more than 5 times higher than Alberta.
Alberta, however, ranks 3rd for total number of venture capital deals, finishing the first quarter with 26 deals, just one more than BC. Québec had 39 deals and Ontario had 86, 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 quarter, Alberta saw an average value of $17.9 million per deal. That puts them at 4th among the provinces. BC was in third place, with a per deal average that was $1.5 million higher than Alberta’s, despite seeing fewer deals.
Québec had the highest per deal average, at $28.2 million, which was more than $10 million higher than Alberta’s. Ontario was in second place with a $26.7 million average.
And while it’s true that Alberta saw record investment, they weren’t the only province with increased investments. Here are the first quarter investments for each province in both 2021 and 2022
| Q1 2022 | Q1 2021 | Change | |
|---|---|---|---|
| ON | $2,300 | $1,185 | $1,115 |
| QC | $1,100 | $468 | $632 |
| AB | $466 | $218 | $248 |
| SK | $107 | $11 | $96 |
| NS | $42 | $19 | $23 |
| NB | $19 | $14 | $5 |
| NL | $3 | $2 | $1 |
| MB | $1 | $44 | -$43 |
| BC | $485 | $709 | -$224 |
Alberta saw the third largest increase in absolute dollars when comparing the first quarters of 2021 and 2022, with an extra $248 million this year. Ontario was highest, at $1.115 billion, followed by Québec at $632.
Now, those provinces are larger than Alberta, so it makes sense that those investments would be larger. So let’s look at the increase as a percentage to get a fairer picture of those increases.
| Q1 2022 | Q1 2021 | ||
|---|---|---|---|
| SK | $107 | $11 | 872.7% |
| QC | $1,100 | $468 | 135.0% |
| NS | $42 | $19 | 121.1% |
| AB | $466 | $218 | 113.8% |
| ON | $2,300 | $1,185 | 94.1% |
| NL | $3 | $2 | 50.0% |
| NB | $19 | $14 | 35.7% |
| BC | $485 | $709 | -31.6% |
| MB | $1 | $44 | -97.7% |
Here, Alberta drops to 4th place and Ontario drops to 5th place. Now, Alberta’s 113.8% increase is pretty impressive, but it pales in comparison to the 872.5% increase that Saskatchewan saw, and is notably smaller than the increases in Québec and Nova Scotia.
So, while it is true that venture capital investment did indeed increase in Alberta in the first quarter of 2022, they also increased in 6 other provinces, 3 of which saw larger increases.
Schweitzer should be really careful about taking responsibility for the growth in venture capital investments. Because if he takes responsibility for the extra $248 million in investments, he has to take responsibility for the 4th slowest growth rate, too.
