There are many reasons to be excited about the Canadian venture capital market
The Canadian venture capital market is not immune to the global market downturn, but unlike the United States, where everything is looking increasingly bleak, there are quite a few bright spots in the Canadian ecosystem this year.
Data from the Canadian Venture Capital and Private Equity Association (CVCA) revealed that C$7.2 billion ($5.28 billion) was invested in 520 deals in the country during the third quarter of this year. This compares to C$15 billion deployed in 786 deals in 2021 (more on Canada’s last year here). In the third quarter, the Canadian market had already exceeded its 2020 figures. It should also be noted that, unlike the United States, the fourth quarter is not the slowest period of investment each year in Canada.
Much of recent Canadian venture capital investment has focused on the early stages. So far this year, 88% of known venture capital deals in Canada have been seed or early-stage projects, compared to 67% in the United States, according to PitchBook.
CVCA’s director of research and products, David Kornacki, said that despite lower total investments than last year, there have been many signs this year that the Canadian venture capital market is approaching maturity. On the one hand, he thinks the proliferation of seed deals will create a good pipeline of later-stage opportunities in the region in a few years, something Canada has struggled with.