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The tech sector in Calgary and across Alberta continues to draw interest, with the city now outpacing Vancouver — and the province surpassing British Columbia — in attracting venture capital investment during the first half of the year.

Those bragging rights could be short-lived, however.

A new report from the Canadian Venture Capital Association (CVCA) shows firms in Alberta raised $383 million during the first six months of the year through 41 separate deals, compared with $288 million and 43 deals in British Columbia.

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The study noted Ontario, Quebec and Alberta now make up 90 per cent of all venture capital investment raised in the country.

“In the first half of this year, it was the first time that Alberta did overtake B.C. It’s always been Ontario, Quebec, B.C. — those are always the top three,” CVCA director of data David Kornacki said in an interview Thursday.

“I’m happy to see the top three getting a little bit of a shakeup this year. I think it’s great to see investment activity spread across all of the provinces.”

Even with a 16 per cent drop nationally in venture capital funding, Calgary’s tech sector continued to fare well.

Companies based in the city raised $346 million through 33 deals, ranking third in the country, well behind Toronto and Montreal.

Vancouver dropped to fourth place, with 32 deals and $178 million. (Last month, B.C.-based legal technology firm Clio announced it raised US$900 million, at a $3 billion valuation, which will show up in the third quarter data.)

“Institutions are paying attention to us all of a sudden,” said Sandi Gilbert, managing director of Calgary-based scale-up fund InterGen and a board member of the National Angel Capital Organization.

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“To actually bypass Vancouver is pretty impressive.”

Alberta’s tech sector has been one of the key forces powering economic diversification in the past decade. A growing number of unicorn companies — firms valued at than $1 billion — have taken off in recent years, such as Benevity, Solium Capital (now Shareworks by Morgan Stanley) and Neo Financial.

And there are more large funding deals taking place. For example, Calgary-based geothermal firm Eavor Technologies completed a $182-million financing round last fall, while Edmonton-based Jobber raised US$100 million in a Series D round early last year.

The province’s tech ecosystem is also attracting more talent and experience, creating a ripple effect, said Alberta Technology Minister Nate Glubish.

“We’ve been slowly maturing over the last 10, 15 years, but in the last five years, we’ve hit it into overdrive and we’ve been outpacing the growth in every other jurisdiction,” Glubish said.

“This is a big deal. I don’t think it’s the last time that it’s going to happen, and I think that this is a sign of things to come.”

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Part of what propelled Alberta higher was one large deal in the second quarter, when Calgary-based ClearSky Global Corp. announced in June it raised US$168 million (C$230 million) from a private group of international ESG investors.

ClearSky plans to use the money to deploy its technology — converting natural gas to both low-carbon diesel and jet fuel — and build innovative facilities able to produce the transportation fuels.

Company president Clark Grue said the CVCA report highlights the potential “sweet spot” for the city to expand within the cleantech space.

“It is exciting. I think it’s showing us that Alberta is, and has become, much more than simply energy and agriculture,” Grue said Thursday.

“Our company, it’s clean tech, so we are a solution within the energy space. So from our perspective, it’s new clean technology being applied to what we require in this world, which is energy.”

The CVCA report pointed out that total venture capital investment into cleantech this year is on pace to match last year’s record of $1.2 billion.

Grue said ClearSky will develop three new commercial plants with its technology, with one to be constructed in Germany and two others in Canada, including one expected to be built in Alberta.

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“ClearSky has a very big vision for what we’re going to do in North America . . . It’ll make us a very, very large company and we’re going to be headquartered right here in Calgary,” he added.

“The management team is all Calgarians. And we’re excited about this being home for us.”

In Calgary, total venture capital investment dollars raised in the first half jumped 47 per cent from the same time last year, although it’s far off the record of $478 million set in 2022. The provincial dollar figure was down 7.4 per cent from the same period in 2023.

While Alberta’s place in the Top 3 will likely be temporary, with last month’s large deal by Clio set to boost B.C.’s figures, the first half data confirm that Alberta’s tech sector is maturing and some firms are gaining attention.

Even with the national slowdown in the tech sector, Calgary and Alberta are maintaining momentum, said Gilbert.

Companies that took years to build are finally advancing to the stage where they can attract significant investment of $50 million or more.

“We’re finally being recognized for the companies that we’re building here, and the interest of investor dollars coming into the province,” she added.

Chris Varcoe is a Calgary Herald columnist.

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