2024 Canadian VC, 3rd best in history, Q4 crash points to uncertain 2025
All dollar ($) figures in Canadian dollars unless otherwise noted.
TORONTO, March 5, 2025 /CNW/ - Canadian venture capital (VC) in 2024 totalled $8.89 billion* from 739 financings.
Summary
- 2024 disbursement $8.89 billion is the third best in Canadian VC history, behind 2021's $14.2 billion and 2022's $9.71 billion.
- Q3 2024 disbursement $3.57 billion is the second best behind Q2 2021's $4.90 billion.
- Q4 2024 disbursement $1.19 billion is the second worst quarterly result since 2021 just ahead of Q3 2023's $1.17 billion.
CPE Analytics tracks capital that flows directly into the companies and excludes known secondary portions of transaction rounds, in which no money went to the companies to help them grow and scale. CPE Analytics provides Canada's only reliable benchmark on Canadian VC investment activities. With the inclusion of secondaries, substantially large sums in recent years, other providers' data are of little use and relevance to truly and accurately measure and benchmark the state of Canadian VC ecosystem.
Key Observations
I. USA, South Korea China, UK top four funding sources
USA, South Korea, China and UK are top four funding sources for Canadian companies, together accounting for 62% of capital flowing into Canadian companies.
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* * * CPE Analytics' dataset is distinguished by a rigorous application of proper methodological practice which, for instance, does not include M&A transactions completed by VC-backed portfolio companies or other secondaries transactions. For example, Clio itself did not receive US $900 million of the total funding. A substantial of the funding went to company's management and employees, and to existing investors.
II. Asian investors led by South Korea, China, Japan increased their shares of funding sources
Investors from Asia invested $842 million or 9% in Canadian companies. Top five Asian investor were from South Korea, China, Japan, Taiwan and Hong Kong. There was no investment from Indian investors. Asian investors' share could be higher if some of their investments made from the offshore locations had been disclosed. In comparison, Asian investors invested $343 million for 5% share of total Canadian disbursements in 2023.
III. Governments continue to out-invest Canadian private VCs
Canadian governments invested $941 million, our-investing Canadian private VC by $235 million. In comparison, governments and private VC invested $847 million and $496 million in 2023 respectively, for a differential of almost $351 million.
IV. Q4 crash points to an uncertain 2025
Canadian companies attracted $1.19 billion in Q4 2024, a precipitous fall of 67% from Q3 2024. Q3 being the second best quarterly Canadian results has made the matter even worse. Not considering of Q3, 2024, Q4 2024 reported the second lowest quarterly results since 2021, barely bettering Q3 2023 by $18 million. There is still plenty time to fully account the quarter, Q1, 2025 has yet to show any sight of turning round.
V. VC fund fundraising continues to lag
58 funds raised $2.64 billion, ahead the historic low of $1.72 billion in 2023, still far behind fundraising in 2022 in which 48 funds raised $4.74 billion.
" The 2024 data starkly reveal the dependence of Canada's innovation industries on foreign VC investment, particularly that originating from the US which alone accounted for 53% of all VC investment dollars in Canada. At a time of hyper-nationalism in the US federal administration today and with fears of economic warfare across multiple fronts surging in Canada and elsewhere this over-reliance on US VC constitutes a strategic weakness of Canada in the competition for scarce investment dollars. The US federal government's focus on securing American technological leadership will likely result in it actively promoting US VC investment into domestic firms while looking askance at foreign ventures. As a result, Canada will need to prepare for a material decline in US VC investment over the short to medium term and which will need to be met with increased VC supply from Canadian sources including private, corporate and government," commented Richard Rémillard, President of Rémillard Consulting Group (RCG).
" The 2024 data show the increasing proportion of investment dollars going into ICT, driven largely by AI. As Marc Andreessen famously said, "Software is eating the world", compared to 2017, the data starkly reveal how Biotech and Cleantech have reversed positions as Biotech has plummeted as a proportion of VC investments while Cleantech has reached new heights. Fintech investments, as a proportion overall, continue to stagnate," added Rémillard,
2024 Highlights
Top 10 municipal cities
The top 10 cities collectively raised $8.13 billion, accounting for 91% of the total disbursements.
Municipal City | Province | # Fin's | $ Millions |
Toronto | Ontario | 201 | 3,345 |
Montreal | Quebec | 66 | 1,159 |
Vancouver | British Colombia | 118 | 1080 |
Burnaby | British Columbia | 9 | 906 |
Calgary | Alberta | 79 | 765 |
Quebec City | Quebec | 19 | 286 |
Kitchener | Ontario | 14 | 197 |
Mississauga | Ontario | 13 | 159 |
Ottawa | Ontario | 31 | 128 |
Richmond | British Columbia | 6 | 102 |
556 | 8,128 |
Top 10 foreign funding sources
Investors from the top 10 countries accounted 66% of total capital flow into Canadian companies.
Country | $ Millions |
United States | 4,693 |
South Korea | 454 |
China | 168 |
United Kingdom | 164 |
Japan | 123 |
Switzerland | 100 |
Netherlands | 64 |
Sweden | 57 |
Germany | 51 |
France | 42 |
Top 10 Investor types
Top 10 types of investors accounted of 91% of the total disbursements into Canadian companies.
Investor Type | $ Millions |
Private VC - US | 2,091 |
Mutual/Hedge Fund - US | 1,327 |
Corporate - Foreign | 962 |
Government - CDN | 941 |
Corporate - US | 836 |
Private VC - CDN | 706 |
Private VC - Foreign | 352 |
Corporate - CDN | 301 |
Private Investors - CDN | 261 |
Family Office - CDN | 249 |
Top 10 VC law firms
48 law firms were tracked or reported to participate in Canadian VC financings in the first nine months of 2024.
Law Firm | # Companies | # Financings | $ Millions |
Osler, Hoskin & Harcourt LLP | 28 | 59 | 2,201 |
Fasken Martineau DuMoulin LLP | 19 | 70 | 450 |
LaBarge Weinstein LLP | 14 | 32 | 196 |
Blake, Cassels & Graydon LLP | 8 | 13 | 475 |
Dentons Canada LLP | 8 | 15 | 49 |
McCarthy Tétrault LLP | 6 | 15 | 107 |
Mintz LLP | 5 | 22 | 50 |
McInnes Cooper | 5 | 16 | 33 |
Borden Ladner Gervais LLP | 5 | 23 | 28 |
Norton Rose Fulbright Canada LLP | 4 | 8 | 13 |
Summary report
Summary report can be downloaded from financings.ca website: https://www.financings.ca/reports/
Methodology
Included
- Equity and quasi-equity investments in companies directly.
Excluded
- Secondary transactions (investor/shareholder exit events) in which companies received no money.
- Acquisition for expansions (M&As)
- PE transactions
- Financing by foreign headquartered/domiciled companies with Canadian subsidiaries.
Rémillard Consulting Group (RCG)
Rémillard Consulting Group (RCG) is a unique, Ottawa-based, bilingual consulting firm specializing in providing private sector, government & trade association clients with creative, research-grounded solutions to business issues and public policies involving the Canadian financial services industry. For more information: [email protected]
CPE Analytics
With 108,900 financing transactions, and growing continuously and rapidly to its all Canadian Financings database, CPE Analytics is Canada's undisputed leader in financing intelligence. We provide comprehensive, verified, unbiased and unmatched insights and intelligence on private and public financings, initial public offerings (IPOs), M&As, professional investment firm fundraising activities.
We cover all aspects of VC information, not limited to but including Canada's only information on VC firm fundraising, VC funding sources (where all the VC came from and from which types of investors).
CPE Analytics is the data analytics division of CPE Media & Data Company. More Info: https://cpeanalytics.ca, https://financings.ca
CPE Media & Data Company
Founded by Canada's the most experienced private capital and financing research experts, CPE Media & Data Company is Canada's leading all financing news and intelligence provider. More information: https://cpecompany.ca/
SOURCE CPE Media & Data Company
Contacts: Ted Liu, CPE Media & Data Company, 647-782-8818, [email protected]; Richard Rémillard, Rémillard Consulting Group (RCG), 613-715-3055, [email protected]
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