OTTAWA—Gaps in the Canadian cleantech sector’s financing chain are making it tough for Canadian entrepreneurs and startups to develop and commercialize new technologies, and threatening the industry’s global competitiveness, according to a joint report from Sustainable Development Technology Canada and venture capital fund manager Cycle Capital.
Despite successes—particularly with research in an institutional lab setting and in the emergence of some specialized venture funds and accelerators across the country—the study found Canada lags other leaders in a number of key areas, including the size of financing rounds, the absence of specialized large-scale venture debt providers for early commercialization and the low rate of conversion of academic publications into academic patents.
Benchmarking the Canadian cleantech sector against the U.S., the report says that while the number of VC rounds in Canada is comparable—once the size of the countries are taken into account—the relative size of investment per round in Canada is just 56 per cent of the U.S. total. In other words, the total investment in the Canadian cleantech sector about half of “what it should be” on a per capita basis.
Startlingly, there have been just 17 VC rounds in Canada larger than $15 million since 2010, compared to 406 in the U.S.
Less capital available per round and the lack of a large specialized cleantech fund based in Canada are both hindering companies’ ability to scale up their operations and commercialize their technologies, the report said.
You can access the full report, which takes an in-depth look at the strengths and weaknesses of the Canadian cleantech landscape here.
The report’s findings complement the results of Analytica Advisors’ 2016 Canadian cleantech assessment, which found the industry is losing ground to global competitors as other countries place an increased emphasis on renewable energy and emissions-reducing technology.