Canadian startup funding: boom, bust, or bounce back?

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Canadian startups raised $7.86 billion in 2024 says Canadian Venture Capital Association (CVCA) in its latest funding report. It’s slightly better than the previous year, growing by about 11%. If you take out the covid abnormal years of 2020, 2021 and 2022, the funding trend in aggregate since 2018 has been on the up and up. But that’s not the real story here.

Three Takeaways

Big round saved the year

One funding deal made up about 15% of the funds raised last year. Clio, a legal tech, pulled in $1.25 billion CAD in a Series F round, becoming the biggest round by any Canadian company since 1Password in 2022.

If you exclude the Clio raise, 2024 was actually not a great year for Canadian startups. This is also reflected in the total number of deals in 2024, which is about 14% less than the previous year and only a bit higher than 2020 (a pandemic year).

The government is 1st and 2nd most active fund

BDC (Business Development Bank of Canada), backed by the Canadian government, with more than $6 billion in assets under management, deployed almost $1.2 billion CAD and participated in 76 deals. In terms of deal count, it was roughly two-thirds more than the next biggest fund, which is also, you guessed it, another government-backed corporation — the Export Development Canada (EDC).

And the dominance will continue. BDC announced last week a new $1 billion fund targeted at later-stage companies (we can reasonably expect bigger late-stage rounds driving the most impact in 2025 as well). To learn more about BDC, check out this great opinion piece here.

Pre-seed and early-stage rounds are still lightweight

As a founder and an advisor with a pre-seed startup, I’ve seen firsthand the shortage of funding at the pre-seed stage. What you find are a lot of accelerators that provide founder and startup educational resources but without money to back founders.

“The average deal size [in pre-seed rounds]…fell to $0.86M, 36% below the five-year average of $1.34M…” according to the CVCA report. Also, the deal count for early stage investments (which means Series A & B) was 31.4% below the five-year average.

The most active pre-seed investors last year were Startup TNT, Antler and Golden Triangle Angel Network, accounting for more than half of the funding deals.

News

• Toronto Tech Week, a new initiative backed by Shopify, Google Cloud, and the City of Toronto, is set to take place from June 23-27, 2025, aiming to position the city as a global tech hub following Collision’s move to Vancouver.

• BDC Capital has committed nearly $1 billion CAD to late-stage Canadian tech companies, allocating $500 million to its Growth Venture Fund and $450 million to its Growth Equity Partners program.

• National Bank of Canada reported a first-quarter profit of C$1.05 billion, or C$2.93 per share, surpassing last year's C$922 million, driven by a 23% increase in wealth management income to C$242 million.

Resources

• Deep Dive into LLMs like ChatGPT (by Andrej Karpathy, a former member of OpenAI)

•  This Is What Young Founders Should Focus On (by Dalton & Michael, YC Partners)

• Tobi Lütke’s leadership playbook: Playing infinite games, operating from first principles, and maximizing human potential (founder and CEO of Shopify)

Deals

• Dispersa, a Canadian cleantech company specializing in waste-derived biosurfactants, secured a $5.8 million CAD seed funding round to scale its sustainable solutions for the chemical industry.

• Primus Capital, a U.S.-based private equity firm, acquired a majority stake in Reach, a Calgary-based e-commerce SaaS platform, to support its global expansion efforts.

• Opal, a Vancouver-based fintech startup, raised $1.5 million USD in pre-seed funding to develop an all-in-one expense management platform for ad agencies.

• Ottawa-based Hyperlume, a technology company focused on accelerated computing and AI data centers, raised $12.5M in Seed funding led by BDC’s Deep Tech Venture Fund and ArcTern Ventures, with participation from MUUS Climate Partners, SOSV, Intel Capital, and LG Technology Ventures.

• Vancouver-based Reverb Therapeutics has raised a $17-million CAD seed round to develop immune-based disease treatments. Round led by Amplitude Ventures and participation from Myeloma Investment Fund, KdT Ventures, Finchley Healthcare Ventures, InBC, and Seido Capital

• Vancouver-based Variational AI, a developer of a foundation model for small molecule drug discovery, raised a $5.5M Seed extension round led by Nimbus Synergies, with participation from Merck Global Health Innovation Fund, Quimby Investments, Threshold Impact, Defined Capital, and existing investors Flying Fish, A&E Investment, and Nepenthe Capital.

• Glassbox raised $1.65 million CAD in pre-seed funding for its financial modelling and analysis platform. Round was co-led by StandUp Ventures and FinTech Collective, with participation from Watertower Ventures.

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