Canadian venture capital retrenches in second quarter

Venture capital (VC) in Canada dropped to $1.57 billion across 116 financings in Q2 2025, down from $2.76 billion across 229 financings in Q2 2024, according to data from CPE Media.

Investment in Q2 2025 was up slightly from Q1 2025, which registered a paltry $1.33 billion.

The first half of 2025 was the second weakest period since the Covid-19 pandemic, with $2.9 billion across 272 financings – just above the $2.81 billion recorded in H1 2020.

Canadian government and private VC funds significantly reduced investment in Q2 2025. Canadian government investment dropped to $98 million from $209 million in Q1, while Canadian VC investment dropped to $84 million from $129 million in Q1.

“The Canadian contribution in H1 2025 is unchanged at 31% from what it was in 2024.  In other words, Canada’s dependence on one venture capital provider, the US, mirrors its overall economic dependence on America and similarly reveals a material vulnerability of our most advanced technology sectors,” said Richard Rémillard, president of Rémillard Consulting Group (RCG).

US investors increased their share of total disbursements to 58% in Q2 from 50% in Q1. US investors spent $905 million, with $719 million (80%) coming from US VC and hedge/investment funds.

ICT, biotech, and cleantech continued to dominate, with $1,240 million, $833 million, and $443 million of disbursements, respectively, in H1 2025. The three sectors represented 87% of disbursements in H1 2025.

Financial services sector companies raised $171 million, or 6% of disbursements, in H1 2025.