Canada’s tech firms drawing increasing interest from Chinese venture capital firms
Canada’s state-owned venture capital arm BDC Capital sees Chinese interest growing in the country’s AI and other sectors, driven by both technological prowess and cheaper valuations
Chinese venture capital firms and technology giants are increasingly taking note of Canada’s technology scene, with artificial intelligence as well as clean technology and life sciences some of the areas attracting interest.
As well as the research capabilities, the lower valuations of Canadian technology companies compared to their US counterparts make them attractive to Chinese investors, with the number of tech-related deals in Canada involving Chinese venture capital firms more than doubling to nine in 2017 from four in 2016.
Alison Nankivell, vice-president of global expansion at BDC Capital – the venture capital arm of the Business Development Bank of Canada (BDC), pointed to AI research at universities in Montreal and Toronto as one area of interest, and said she was “optimistic that high-net-worth investors from Greater China will be the next wave of investors looking at investing into Canadian companies.”
The Chinese government has set a goal of building a domestic artificial intelligence industry worth nearly US$150 billion in the next few years, and to make the country an “innovation centre for AI” by 2030.
Tencent Holdings, one of China’s tech “big three” along with Baidu and Alibaba Group Holding – who are all rapidly developing their AI businesses, has already dipped its feet into the Canadian AI scene, investing in Element AI, a start-up co-founded by Montreal university academic and deep learning expert Yoshua Bengio.
Separately, money is also flowing into Canadian start-ups focused on other areas, including clean technology and life sciences, Nankivell said.