Canadian venture capital remained sluggish in third quarter
Canadian venture capital disbursements remained sluggish in the third quarter of 2025, down 58% from the $3.27 billion recorded in Q3 24, according to a CPE Media report.
In Q3 25, there was $1.38 billion in disbursements and 117 financings – also down from the $1.63 billion and 134 financings registered in Q2 24.
In the first nine months of 2025, there were 414 financings across $4.43 billion, down 41% and 30% respectively from the first nine months of 2024.
"The Q3, 2025 and year-to-date data point to an ongoing slowdown in venture capital activity across different metrics as well as a continuation of observed patterns. With respect to the former, the sluggishness appears particularly in investing volumes and exits, the latter of which have been virtually non-existent,” said Richard Rémillard, president of Rémillard Consulting Group (RCG).
US investors continued to lead investments in Canadian firms, accounting for 54% of capital in the first nine months of 2025, up from 52% in 2024.
Ontario continued to attract the most investment, with $2.33 billion raised in the first nine months of 2025, accounting for over half of capital flow.
US investments comprised 66% of capital flow to Ontario but only 19% of financing dollars to Quebec. This relates to factors such as language, tax, and regulatory differences. As such, Quebec firms must rely more on government dollars.
“As for the established contours of venture capital in Canada, the long-noted dominant roles played by US investors nationwide and the unchallenged leading, position of Ontario, especially of Toronto, remain distinguishing features of the Canadian venture scene,” Rémillard added. “Of note is what has not been happening - from the significant lack of US investment in Quebec companies to the striking underinvestment in defense and aerospace firms so far in 2025.”
ICT, biotech, and cleantech companies raised $2.34 billion, $969 million, and $708 million respectively for a combined $4.02 billion – or 91% of total disbursement in the first nine months of 2025.
Of the ICT companies, internet software and AI companies attracted and $1.17 billion and $586 million, respectively.
There have been no venture-backed IPOs since Coveo Solutions Inc. in November 2021 – and there will probably be no VC-backed IPO in 2025.
“With nine months of data in hand, and absent a significant course correction, 2025 looks set to be a morose year for venture capital activity," Rémillard concluded.
