New Prime Minister, Acquisitions and More

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Friends,

This week — we have a new prime minister, and he plans to scrap the capital gains tax increase suggested by his own party; more tariff talks; a few startup acquisitions; and the Bank of Canada cutting interest rates to 2.75%.

Two Vancouver Startups Acquired

The dominant strategy for most startups in Canada is clear: build, prove, and exit via acquisition.

Two recent deals (with undisclosed terms) reinforce this trend: Deloitte’s acquisition of Vancouver-based Pocketed, and U.S. fintech Docupace acquiring fellow Vancouver startup Hubly. Both companies followed the typical Canadian startup playbook:

• Find a niche pain point. Pocketed tackled the messy, bureaucratic world of grants and non-dilutive funding. Hubly streamlined workflow automation for financial advisors drowning in administrative tasks.

• Build a tech-driven solution that simplifies processes. Automation, AI, and platform integrations were at the core of both companies’ value propositions.

• Gain traction with businesses. Canadian startups often prove themselves domestically before scaling into larger markets like the U.S.

• Exit via acquisition by a larger player looking to integrate the tech. Deloitte enhances its grant advisory services. US-based Docupace expands its wealth tech ecosystem.

I believe some investors actively encourage this strategy, too. One anecdote from the past week is a Canadian VC firm asking a founder, who was looking to raise a pre-seed round, if they had started speaking with potential acquirers.

It raises the same age-old question: Is it a lack of ambition or a lack of appropriate incentives to spur risk capital? It’s probably both.

Latest Deals

• Softchoice, a Toronto-based IT solutions provider, has been taken private and moved to the U.S. after World Wide Technology (WWT) completed a $1.48 billion acquisition.

• Kraken Robotics, a Canadian marine technology company, acquired 3D at Depth for $24.5 million to enhance its subsea imaging and data services.

• Nexera Robotics, a British Columbia-based industrial automation company, raised $4.5 million CAD. BDC Capital, Defined, and RiSC Capital participated in the round.

• FutureVault, a Toronto-based AI-powered digital vault provider, secured $4.3 million CAD to strengthen its Client Life Management Vault™ solution, enhance AI and workflow automation, and expand enterprise-wide connectivity.

• Avitia, a Quebec-based AI-driven cancer testing company, raised $5 million CAD in a Seed round to enhance its platform and expand into new markets.

• Augmenta, a Toronto-based provider of AI software for the architecture, engineering, and construction (AEC) industry, raised $10 million in Seed funding led by Prelude Ventures, with participation from Montage Ventures.

• Greenspace Health, a Toronto-based SaaS measurement-based care technology provider, raised an undisclosed amount in Series B funding led by ABS Capital Partners.

• Novarc Technologies, a North Vancouver-based developer of collaborative welding robots, raised $50 million in Series B funding led by Export Development Canada.

• Clio, a Vancouver-based legal tech firm, acquired UK-based Sharedo to expand into serving large law firms and accelerate global growth.

News

• Mark Carney, Canada's Prime Minister, has pledged to reverse the Liberal Party's proposed capital gains tax increase, effectively ensuring its cancellation.

• The Government of Canada has launched the AI Compute Access Fund, a $300 million initiative under its $2 billion Sovereign AI Compute Strategy, to provide SMEs with affordable high-performance computing resources.

• Deloitte Canada has acquired Pocketed, a Vancouver-based company renowned for assisting businesses in identifying and securing grant opportunities.

• Zolve, a US-based neobank, is set to launch in Canada by summer 2025, offering financial services like credit cards and chequing accounts tailored for newcomers who lack local credit history.

• Docupace, a New Jersey-based provider of back-office solutions for wealth management firms, has acquired Vancouver-based Hubly, a workflow management platform for financial advisors, to enhance operational efficiency and automation in the financial advisory sector.

Resources

• An incomplete list of Canadian tech programs and organizations supporting women’s initiatives

• Learn how this founder reached $17.5M ARR in 3 months

About That

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