While seed-stage investment continues to struggle in Canada, late-stage investments were in the driver’s seat for this year’s venture capital (VC) deals.
According to the Canadian Venture Capital and Private Equity Association’s (CVCA) 2024 VC market overview, investments reached $7.86 billion across 592 deals — $1.4 billion of this taking place in the final quarter of the year.
Later-stage investments drive market activity
A handful of large-scale deals had an outsized influence on the year’s total investment. In fact, mega-deals (i.e., $50M and above) accounted for 62% of all dollars invested in 2024.
Clio’s $1.24 billion CAD growth-stage round was one of the biggest — not just of the year, but the largest round ever closed in Canada — highlighting the ongoing trend of investors favouring more mature companies with established track records.
The largest Q4 deal was from Montreal’s Blockstream, raising $290 million via convertible note.
Meanwhile, early-stage funding showed signs of strain. Seed-stage startups raised just $510 million across 201 deals, down nearly half from $958 million in 2023. The decline underscores the challenges newer companies face in attracting capital amid a shifting investment landscape.
“There’s no question that capital is available for later-stage companies, and we continue to see investors backing more mature companies and proven Canadian innovators,” Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association (CVCA), said in a statement.
“However, we are seeing ongoing constraints at the pre-seed and seed stages. This decrease is significant for future rounds of financing, ensuring a healthy pipeline of early-stage companies is critical to long-term ecosystem strength.”
The breakdown
The information and communications technology (ICT) sector dominated, drawing $4.49 billion across 285 deals. Life sciences followed with $1.38 billion, while cleantech secured $1.07 billion. These three sectors accounted for the bulk of total venture capital deployed in Canada over the year.
Bringing geography into the mix, Ontario, Quebec, and British Columbia accounted for 88% of all dollars invested and 76% of all deals closed in 2024. This translates into nearly $7 billion across 448 deals. Here’s how that looks for each province:
- Ontario ($2.5B, 252 deals)
- Quebec ($2B, 108 deals)
- BC ($2.5B, 88 deals)
Not far behind BC’s 88 deals is Alberta, which saw $698 million invested across 84 deals. How did the rest of Canada fare? Here’s a breakdown:
- Nova Scotia ($79M, 18 deals)
- New Brunswick ($15M, 15 deals)
- Saskatchewan ($31M, 13 deals)
- Newfoundland and Labrador ($81M, 9 deals)
- Manitoba ($2M, 4 deals)
- Prince Edward Island ($1M, 1 deal)
On the exit front, Canadian companies saw $5.17 billion across 40 deals. Mergers and acquisitions made up the majority of exits, with the $3.26 billion acquisition of Fusion Pharmaceuticals by AstraZeneca standing out as the largest disclosed deal of the year.
What’s next for Canadian startups?
While later-stage companies continued to attract funding and exit opportunities, the slowdown in early-stage investment remains a concern for the long-term strength of Canada’s innovation pipeline.
Canada’s political and economic future is in a very headline-grabbing shift, and with a federal election most likely on the horizon, the question of how to increase and support innovation and high-growth companies has become an important policy debate.
As Furlong writes in her letter prefacing the overview, “We can no longer afford to stumble through conflicting policies and short-term fixes. It’s time to unleash Canada’s ambition with a bold, strategic plan, a concrete industrial policy that clears the path for private investment, empowers pension funds to grow the economy at home, and ensures Canada’s industries lead on the global stage.”
