If you looked at this week’s news, you might think that the acronym for Canada’s biggest VC stood for the Bank of Defence Cash.
BDC Capital revealed two new VC funds this week: a defence-focused successor to the Deep Tech Venture Fund, and another to advise and support businesses selling to the defence industry for the first time.
BDC also signalled that it’s open to alleviating restrictions in the fund documents of the VCs it backs, allowing them to fund companies that make or sell military-related products.
This comes after Québec government agency Investissement Québec lifted its own restrictions on defence funding, and some defence tech founders spoke in Parliament about the issue. Sentinel R&D CEO Katheron Intson called out publicly backed funds for “arbitrarily” blocking defence companies, arguing it only encourages firms to leave Canada.
With new powers come more responsibility. General partners are expected to conduct “enhanced due diligence” to make sure these companies comply with laws and regulations. It’s not just GPs with new tasks. Canadian companies pivoting into selling dual-use tech face their own challenges. “We’re really going to hold their hands,” BDC Capital executive VP Geneviève Bouthillier told me on Thursday.
Lifting investment restrictions was a matter of being “consistent,” Bouthillier said. If BDC can directly invest in such companies, then why shouldn’t the GPs it funds?
Madison McLauchlan
Reporter, Montréal
From Growth to IPO: Having an AI product strategy isn’t enough, your finance operations need one too.
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Queen’s University recruits Ian Karlin from Nvidia in bid to build Canadian supercomputer
Karlin, who most recently served as a principal engineer at chip giant Nvidia, joins a growing list of talented researchers who have moved to Canada amid research funding cuts and attacks on post-secondary institutions in the US.
He also has experience working on El Capitan, the world’s most powerful supercomputer.
Canada launches its own quantum research program to rival DARPA initiative
The federal government has unveiled the Canadian Quantum Champions Program as part of a push to keep promising quantum firms in Canada.
Xanadu, Nord Quantique, Photonic, and Anyon Systems are developing “scalable and useful” quantum computers with up to $23 million each in initial funding through the first of three planned phases.
Canadian payments companies’ “sugar high” ended in 2022. VCs say a new spike is coming
While growth in the payments sector has dropped since 2022, a new report suggests a fresh wave of companies could be on the horizon thanks to the rise of AI tools and long-awaited payments modernization in Canada.
Amiral Ventures holds $40-million first close to address “lack of leadership” in Canadian VC
Amiral held the first close of a targeted $75-million fund this week, after nearly three years of fundraising.
Managing partner Frédéric Bastien told BetaKit he was consistently “disappointed by the lack of leadership in the VC ecosystem in Canada,” and aims to fill that gap by almost exclusively leading rounds.
Shopify alumni updates
- Glen Coates, the former head of Shopify’s core product, has been tapped to lead app development at OpenAI.
- After three years as CEO of Coinbase Canada, Lucas Matheson is the latest former Shopify employee to join Kaz Nejatian at San Francisco-based Opendoor.
- Ex-Shopify engineers have raised fresh financing to scale Turbopuffer’s AI search.
Startup investigation reveals 50 peer-reviewed papers contained hallucinated citations
GPTZero’s Hallucination Check found that 50 papers submitted to a conference included at least one “obvious” hallucination dreamed up by AI.
Each submission had been reviewed by three to five peer experts, “most of whom missed the fake citations.” Some of the citations were written by non-existent authors, incorrectly attributed to journals, or had no equivalent match at all.
Canadian Space Mining Corporation plans for “rapid expansion” in 2026 under new name
The Canadian Strategic Missions Corporation’s rebrand reflects a broader focus on critical technologies, as the startup incorporates two subsidiaries to continue its work in nuclear energy and research and development.
Canada’s Defence Industrial Strategy must include procurement pathways for tech
In an op-ed for BetaKit, Matthew Lombardi, the co-founder of Canadian defence innovation network The Icebreaker, argues the federal defence strategy being drafted in Ottawa must treat Canadian technology firms as core partners.
🇨🇦 Weekly Canadian Deals, Dollars & More
- CAN – Scale AI unveils $129M for 44 new AI projects across Canada
- CGY – GeologicAI acquires Finnish competitor Lumo Analytics
- CGY – Tetra Trust completes test of CAD-backed stablecoin
- TOR – Tuhk raises $6M USD for financial crime-fighting platform
- MTL – National Bank sues Flinks co-founders
- QCY – Coveo strikes AI partnership with the federal government
- STJ – CoLab Software joins the Nvidia Inception Program
The BetaKit Podcast — Canada’s job market sucks for Gen Z
“Can you imagine a quarter—25 percent—of Canada isn’t sure if they’ll be employed next year? That is a wild statistic.”
Kevin Kliman, president of Canadian business at Employment Hero, joins to explain why Canada’s workforce is underemployed and anxious about 2026. He also shares data indicating things are particularly bad for Gen Z, before offering tips on how they can make their mark in the modern workforce—with AI.
Take The BetaKit Quiz – Canada’s quantum dark horse, DoorDash gets Zesty, and Queen’s Nvidia recruit
Think you’re on top of Canadian tech and innovation news? Time to prove it. Test your knowledge of Canadian tech news with The BetaKit Quiz for December 19, 2025.
Feature image courtesy BDC.