Another megadeal gave Montréal’s tech ecosystem a solid start to 2021, but without it, venture funding would have sunk far below the worst quarter of the last year, according to the BDO-Hockeystick Montréal Tech Report.

In Q1 2021, the Montréal tech ecosystem drew in $253 million, an increase of 146 percent from last quarter, and 26 percent year-over-year. Venture funding held steady due to travel tech startup Hopper’s $213 million Series F round, which accounted for 84 percent of all dollars raised in the city.

Though Montréal venture funding caught up to Toronto in 2020, the Québec city only raised roughly one-fifth of the $1.15 billion Toronto startups raised in Q1. Without Hopper’s deal, Montréal would sit far behind Toronto, British Columbia, and Calgary in terms of overall investment. According to data provided by Hockeystick, Montréal’s Q1 performance would only lead over Waterloo Region, which saw one of its lowest quarters ever in Q1 with just $14 million raised.

“Montréal, like Waterloo, can have lumpy quarter-over-quarter performance due to each of them having a smaller number of high-growth companies,” said Rob Darling, research partner at Hockeystick. “A low quarter here or there is not a red flag. If we were seeing low numbers across two or more quarters, then there would be reason for concern.”

Montréal’s reliance on a single megadeal to drive quarterly funding growth has emerged as a key trend in the ecosystem over the last year. In 2020, deals such as Sonder’s $230.4 million Series E round and AppDirect’s $250 million investment helped the city achieve some of the strongest quarters seen in years.

The number of deals closed in Montréal over the first quarter of 2021 was down 25 percent from Q4 2020 and 31 percent year-over-year. Though deal volume has stayed relatively consistent over the last year, peaking at 35 deals in the second quarter of 2020, Q1 2021 had the lowest deal count in at least the last year.

Of the 18 deals closed in Q1, 10 were classified as either pre-seed or seed-stage deals. Significant early-stage raises included Heyday AI’s $6.5 million seed round of funding, Livescale’s $2.5 million early-stage raise, and Eli’s $1.2 million raise.

The high early-stage activity in Q1 2021 is reflected in some of the region’s most active investors during the quarter, such as Real Ventures and Panache Ventures, which both invest in the pre-seed and seed stages.

At the same time, a new accelerator, run in partnership between Highline Beta and FinTech Station, also launched in Montréal in Q1, which could bolster the city’s early-stage startups in future quarters.

“The pre-seed and seed-stage deals for Montréal are in line with previous quarters and show that the ecosystem still has a strong pipeline of early-stage companies,” Darling said.