Toronto outpacing all other cities VC investments actually up after the much-criticized federal budget All dollar ($) figures in Canadian dollars unless otherwise noted. TORONTO, July 22, 2024 /CNW/ - Canadian venture capital (VC) totalled $3.87 billion* in first half (H1) of 2024, driven by strong second quarter in which $2.47 billion was raised by Canadian companies.  Q2 2024 VC investments totaled $2.47 billion, up by 76% from the $1.40 billion registered in Q1 2024. The Q2 figure is noteworthy as it directly counters all the purveyors of doom and gloom who had been predicting that tech investments in Canada would crater following the April 16 federal Budget's measures with respect to the treatment of the capital gains inclusion rate. In fact, just the reverse appears to have occurred. Granted, investments made in Q2 may have been agreed upon prior to the federal Budget in Q1 and only announced in Q2. Nevertheless, it appears that the battalions of Cassandras were quite simply wrong. Key Observations I. Ontario's share surpasses 50% for the first time since 2017 Companies from Ontario attracted $2.10 billion (54%), and, for the first time since 2017, accounting for more than half of the total disbursements. II.  Toronto VC Investments greater than those of all other cities combined Toronto VC investments dwarfed those of any other city across the country by a country mile, thus cementing Toronto's leadership in the financial services overall and in VC in particular. III. US Investment Funds, Corporate VCs and Private VCs – top three backers The top three investors were all from the United States. Together they invested $1.96 billion or 51% of the total disbursements.  US investors including US Private Investors and US family offices collectively invested $2.15 billion, accounting for 55% of the total amount. IV.  Fundraising 22 private VC funds raised $1.58 billion in the first half of 2024, almost unchanged from $1.59 billion and $1.57 billion for the same period in 2022 and 2023 respectively, but up significantly from $613 million for first half of 2023. Canadian governments continue to the backbone of many of these funds.  Without them, most of them will not be able to close.  A life science fund in Montreal and an IoT fund in Toronto could literally be classified as "government" funds as more than half of the committed capital came from federal and provincial governments, not counting quasi-government funding. V.  Canadian governments out-invests Canadian private VCs Canadian governments invested $458 million more than the $324 million invested by Canadian private VCs. The outpacing of government investments over Canadian private VCs has been the case since 2023. "The data point to the ongoing small investment market share of private Canadian VCs which has fluctuated between 7 and 10% since 2021. The market penetration by the Canadian private VC fund segment would likely be even smaller without the huge contribution of federal and provincial government backing of most recent funds.  To all intents and purposes the private VC fund industry in Canada could be regarded as a quasi-government entity in all but name. This begs the question of how much longer Ottawa, and its provincial counterparts will continue to provide this support in the forthcoming era of government retrenchment and re-prioritization that is now on the near-term horizon," commented Richard Rémillard, President of Rémillard Consulting Group (RCG). "The data starkly reveal the dominant position of Toronto as the pre-eminent venture capital investment destination in the Canadian landscape. Just as Silicon Valley venture capital has dominated the US scene, so too the increasing concentration of venture capital investing activity in Toronto appears to have reached the critical mass required to be self-sustaining and self-reinforcing thereby heralding a new development in the Canadian venture capital ecosystem. Toronto's emergence as the pre-eminent locus of Canadian venture capital investing, unlike Silicon Valley, has been facilitated by the city's leading role in financial services in everything from banking to insurance, pension funds and mutual funds. Toronto's market share of venture capital investment is likely to increase over time, despite the efforts of governments to ensure a more evenly-distributed investment scene. This new situation will possibly compel governments to re-evaluate the policy and program tools currently employed to attract venture capital investment beyond Toronto," added Rémillard. 2024 H1 Highlights Top 10 municipal cities Companies from 52 Canadian municipal cities attracted capital in the first half of 2024. Led by Toronto, the top 10 cities collectively raised $3.58 million, accounting for 92% of the total amount raised by all Canadian companies.    Municipal City Province