Québec’s seed-stage funding landscape is recovering from a grim 2024, with its year-over-year growth outperforming national numbers, but the province is still dealing with a downturn in venture capital (VC) activity.
According to a joint report compiled by the Canadian Venture Capital & Private Equity Association (CVCA) and Réseau Capital, the province tracked 29 seed-stage deals totalling $79 million since the beginning of 2025, a 31-percent increase in capital invested compared to this time last year. These deals made up nearly half of all VC transactions in the province.
The province tracked 29 seed-stage deals totalling $79 million since the beginning of 2025, a 31-percent increase in capital invested compared to last year.
Meanwhile, the decline in pre-seed and seed-stage deals Canada-wide continued in Q2. Seed deals in Canada totalled $256 million across 86 deals, with both deal counts and funding amounts roughly 30 percent below five-year averages.
Earlier this year, experts warned that low pre-seed and seed-stage activity in Québec could spell trouble for future deal flow, as it could indicate a “weakening pipeline” of startups graduating to the Series A stage and beyond. Réseau Capital has tracked a faltering pre-seed and seed-stage landscape for entrepreneurs in Québec since Q1 2023.
Olivier Quenneville, CEO of Réseau Capital, told BetaKit that the uptick in seed-stage activity is “encouraging,” but added that it’s still “premature” to declare this the start of a longer trend.
Quenneville expects to see activity grow at this stage as 17 seed-stage funds have closed in Québec since 2022, representing $742 million in committed capital to be deployed in the near future.
The broader picture of Québec VC was not as rosy. Sixty VC deals totalling $524 million closed in the first half of the year, the report said, as total funding declined 57 percent year over year. The second quarter ranked 40th out of the past 50 quarters since 2013 for overall VC funding in the province.
“Overall deal flow in venture capital remains relatively weak compared to historical levels,” Quenneville told BetaKit. “Persistent political and economic uncertainties continue to weigh on investment activity.”
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Québec largely dealt with similar economic headwinds as the rest of Canada this year, with economic uncertainty due to an ongoing trade war souring investor confidence. At the same time, a persistently cool exit market has limited the cash flowing up to limited partners, contributing to a difficult fundraising market for VCs closing funds. No exits of VC-backed companies were publicly disclosed in the first half of 2025, the report said.
Québec’s tech sector has long relied on public and quasi-public funds for venture funding, which makes up an average of 40 percent of money deployed into the ecosystem. That trend continued this year, the report said, as four of the top five most active investors were government-backed institutional funds.
Later-stage activity, typically beyond Series B, totalled $150 million across nine deals, a funding decrease of 35 percent compared to last year. According to the report, the first half of 2025 included just one growth-stage deal of $30 million for textile manufacturing startup SRTX, from BDC Capital, Investissement Québec, Export Development Canada, and H&M Ventures. It was the first growth-stage VC deal recorded in the province since 2022.
Funding across all sectors tracked in the report—software, life sciences, cleantech, and agribusiness (AgTech)—declined year over year in Québec. No agribusiness deals closed in the first half of 2025.
The largest deals tracked by the report included $79 million for electric vehicle charging company Dcbel, $43 million for medical device maker Puzzle Medical, and $38 million for sustainability reporting platform Novisto.
The CVCA issues quarterly reports on venture capital and private equity transactions in Canada involving its more than 300 member firms. It also pulls from public and private sources to include transactions outside of its membership. However, VCs have noted that these reports are not always a comprehensive representation of all activity in the ecosystem.
Feature image courtesy Adrien Olichon via Unsplash.