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The slowdown in U.S. venture capital funding seems to be stuck at the border – at least for now.Hemera Technologies

The slowdown in U.S. venture capital funding seems to be stuck at the border – at least for now.

The Canadian Venture Capital & Private Equity Association says the pace of investment, which hit a record in the first quarter of 2016, remains resilient, and fund closings are also helping buoy industry activity.

"We're not seeing what you see in the States – at least not yet," said Mike Woollatt, chief executive officer of the CVCA. "People are talking about the softening in the States – I don't see it."

That softening he's referring to is the pullback in VC deals and new investments in the U.S., where activity has fallen in the last two quarters. There are a few factors behind this slowdown including global economic concerns, a slight reduction in lofty startup valuations and an initial public offering market that has all but dried up. The herd of unicorns (companies with billion dollar valuations) has thinned.

But the Canadian VC community seems to be floating above that investor skepticism. The CVCA said Wednesday that venture capital investments hit a record $838-million in the first three months of the year – nearly double the amount in the same quarter of 2015.

The uptick in later-stage financing rounds helped buoy those numbers. Real estate information provider Real Matters Corp. raised $100-million in the first quarter, and Zymeworks Inc., a health and life-science company specializing in biotherapeutics, raked in $87-million. The momentum seems to have continued into the second quarter with companies such as DalCor Pharmaceuticals, which develops cardiovascular disease treatments, raising $100-million in April.

Mr. Woollatt also hasn't seen too many "down rounds," which are share sales that value a business at a lower level than its previous fundraising rounds, diluting ownership for investors who came in earlier. More down rounds have cropped up in the U.S. in recent months.

But if there's one glaring similarity between the U.S. and Canadian VC markets, its the dearth of IPOs. The Toronto Stock Exchange has been void of new issuances so far. The U.S. market made it all the way through January with no IPOs, and showings have been meagre since then.

IPO activity in June could indicate how long that slowdown will last, the Wall Street Journal recently declared, since that month is typically busy for new offerings. A quiet June could signal more months of muted activity ahead.

Mr. Woollatt doesn't see a turnaround happening until the public markets stabilize. He also thinks the $120-billion in available investment capital "just sitting out there" would make many businesses reconsider the cost and hassle of the public markets. "If there's so much money from alternatives coming, still, and you're seeing it, then maybe you don't need to go public just yet," he said.

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