Canadian VC investment drops to $8.19 billion in 2022

Canadian venture capital investment fell to $8.19 billion in 2022, down from a record $14.16 billion in 2021, according to preliminary results from research firm CPE Media.

Though a retreat from the pandemic recovery-fueled highs of the 2021 VC market, 2022’s results still represent the second-highest amount ever raised in Canada.

CPE’s figures include equity and quasi-equity investments in companies directly, but exclude private equity transactions, secondary transactions in which companies received no money, and financing by foreign companies with Canadian subsidiaries.

US investors continued drive the Canadian VC market, investing approximately $4 billion and accounting for nearly half (49%) of overall disbursements in 2022.

Canadian investors accounted for $2.78 billion (34%) in 2022, while non-US foreign investors distributed $1.47 billion (18%) of capital.

Canadian investors accounted for nearly half (48%) of VC disbursements in 2020 as US investors recoiled due to the pandemic; American investors returned in 2021 to drive that year’s record financing.

"The preliminary VC investing data point to the continued availability of risk capital for higher-growth firms in Canada given the substantial contribution of foreign investment from both the US and international sources. The diversity of VC supply is testament to the resilience of the risk capital market in Canada and underpins a 2022 investment level that is second only to the record-breaking level of 2021," said Richard Rémillard, president of Rémillard Consulting Group.