Toronto attracts majority of Canadian VC in Q1 2025

Toronto companies accounted for 57% of Canadian venture capital in the first quarter of 2025, according to a report from research firm CPE Media.

Toronto companies raised $703 million of VC, which totaled $1.23 billion in Q1 2025. That figure was up slightly from Q4 2024 ($1.19 billion) but down from Q1 2024 ($1.44 billion).

Ontario companies represented 66% of total disbursements ($805 million) across 48% of financings (70).

“The weak investment data reveal what is a 'tale of two countries,' with Ontario generally and Toronto particularly showing resilience while every other city and region appears markedly weaker. So, where one stands on the issue of the weakness or underlying strength depends on where one sits - in Toronto or everywhere else,” said Richard Rémillard, president of Rémillard Consulting Group (RCG).

US investors represented $612 million or roughly half of disbursements – down slightly from 52% in 2024. Private US VCs invested $233 million, or 19% overall.

Meanwhile, other international investment fell sharply to 7% from 17% in 2024.

“The Q1 2025 data reveal a sharper drop of investment dollars from the US relative to all of 2024 than occurred from Canadian sources. Clearly, under the Trump's administration's push for business investment to re-locate into the US, that source of venture capital in Canada is at risk while Canada has failed to diversify its other foreign sources of venture capital supply,” Rémillard said.

Canadian sources of funding represented 43% or $529 million of total disbursements. Canadian governments invested $202 million, while Canadian mutual and hedge funds invested $179 million and Canadian private VCs invested $95 million.

“Q1 2025 data reveal that 86% of the capital raised in the quarter came from government funds, largely the BDC. Again, this reflects the state of private business investment in Canada which has markedly lagged in recent years,” Rémillard said.

Almost all VC disbursements went to ICT, biotech, and cleantech companies – at $666 million, $291 million, and $231 million respectively. Fintech companies attracted only $31 million in Q1 2025, down from $510 million in 2024.