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Calgary Herald

Canadian venture capital deals tumble to pandemic-era lows

Article content Canadian venture capital deals have tumbled to levels not seen since the COVID-19 pandemic, according to a new report by the Canadian Venture Capital and Private Equity Association (CVCA). Article content Investors poured $2.9 billion into 254 Canadian VC deals in the first six months of 2025, marking a 26 per cent decline in dollars invested and a 22 per cent fall in deal count compared to the same period last year, the report released on Wednesday said. It was the lowest first-half total since 2020. A sharp pullback in early-stage funding was a key factor in the decline. Article content Article content Article content The information and communications technology (ICT) sector, which includes e-commerce, telecommunications, software and hardware startups, attracted the most VC investment in the first half of 2025, raising $1.39 billion across 115 deals. Article content Article content VC deployment slowed down across all sectors in the first half compared to the same period last year, with funding for the ICT and cleantech sectors reaching only 30 per cent and 17 per cent, respectively, of their total levels a year ago. Article content Investors in the United States have long been key players in Canada's venture capital and startup ecosystem. In the first six months of 2025, however, their participation in Canadian VC deals dropped by three per cent compared to last year and by eight per cent compared to the all-time high reached in 2021. Article content Article content ' Global trade tensions and similar market slowdowns in the U.S.' fueled the slump, said David Kornacki, director of data and product at the CVCA. Article content Article content Nevertheless, U.S. investors continued to dominate Canada's largest deals, participating in half of all mega-deals — those valued at $50 million and above. The most active foreign VCs in Canada in 2025 so far have been American, including the likes of Y Combinator LLC, Tidemark Management Co. LP and TCMI Inc., better known as Technology Crossover Ventures. Article content Investor exit activity remained subdued in the first half of 2025. There were zero initial public offerings, marking two years since the last IPO of a VC-backed portfolio company in Canada.