Canadian VC dollar deployment sees first early-year increase since 2021

Venture capital dollars deployed in Canada increased in the first half of 2026 compared to last year, according to a new report, but fewer rounds were funded overall.

“One thaw doesn’t make a spring.”

Benjamin Bergen, CVCA

The Canadian Venture Capital & Private Equity Association (CVCA) tracked $2.69 billion CAD in dollars invested across 250 VC deals in Canada from January until July—a 17-percent increase compared to the same period last year, and its first increase since the boom times of 2021. But the total number of deals fell for the fifth year in a row. 

Benjamin Bergen, CEO of the CVCA, told BetaKit in an interview that he was encouraged by the “modest increase” in capital deployed year over year, but noted that “one thaw doesn’t make a spring.” 

The capital concentration across fewer, larger deals continued a multi-year trend. The biggest deals of the year so far were Beacon Software’s $313-million Series C round, followed by Dominion Dynamics’ $139-million Series A and Koho’s $130-million Series E round in June.

“Firms are either waiting longer to raise from …  institutional capital, or they’re also needing more money,” Bergen said, adding that this was part of a global pattern. US firm Carta, which tracks global VC trends, found that in 2025, dollars invested into US startups had grown by 130 percent across only three percent more deals. 

This comes as the federal government has pledged $1.75 billion to boost domestic VC, and as the ecosystem waits for more details on how exactly it will be allocated. The feds have also pledged another edition of their Venture Capital Catalyst Initiative—now called the Venture and Growth Capital Catalyst Initiative—with an envelope for fund-of-funds to invest at the later stages, in addition to life sciences funding and money for emerging managers. 

The government is also expected to provide more details on a $750-million early growth-stage capital envelope. CVCA has argued that this funding should go towards scaling tech companies, while industry association the National Angel Capital Organization has urged the government to put the money into angel networks and pre-seed and seed investments. 

Across sectors, capital concentrated within information and communications technology companies (meaning software and AI), which ate up 65 percent of deals. Life sciences investments, however, have had a tough year, with activity dropping 39 percent compared to the same period last year. 

As in previous years, the venture arm of the Business Development Bank of Canada (BDC) was Canada’s most active VC investor. Across 34 deals, the Crown corporation deployed $831.5 million out of its variety of direct investment funds, more than doubling the activity of the next-most prolific investor, Montréal’s Inovia Capital. 

While Canadian investors funded roughly two-thirds of deals, foreign investors had the highest presence in the largest rounds, the report said. To Bergen, the numbers indicate a need to crowd in more growth-stage capital from domestic investors to lead rounds, as well as foreign investors from regions outside just the US.

Bergen added that his investor lobby group is hoping to engage foreign growth-stage investors at an event the association is hosting on Sept. 14 in Toronto. It takes place the same day as Prime Minister Mark Carney’s Canada Investment Summit, which has more of a focus on bringing in investors for major infrastructure projects.

Feature image courtesy Council of Canadian Innovators.