Canadian VC normalizes
Canada’s venture capital activity slowed to $9.13 billion across 598 financings in 2025, signaling a normalization after the 2021–2023 boom even as innovation incentives stay in place. (cantechletter.com)
Industry trackers diverged on 2025 totals: the Canadian Venture Capital & Private Equity Association (CVCA) recorded CAD 8.0 billion deployed across 571 venture-capital deals and reported a 6% decline in capital deployed versus 2024 and a 12% fall in deal count year-over-year. (cvca.ca) CVCA flagged a fourth-quarter pickup of CAD 3.8 billion across 165 deals, with the quarter’s average deal size rising to CAD 23.06 million and the full-year average deal size at CAD 14.07 million. (cvca.ca) The information and communications technology (ICT) sector absorbed CAD 5.06 billion across 269 deals in 2025, and Ontario captured just over half of total venture dollars deployed that year. (cvca.ca) BDC’s 2025 market study estimates roughly CAD 11.5 billion of “dry powder” remains with Canadian investors available for deployment, while BDC has previously noted an elevated role for foreign capital in Canadian VC activity. (bdc.ca) CVCA reported that Series A–D capital deployment was down relative to 2024 and that exit conditions remained tight in 2025, a pattern CVCA linked to slower progression from formation to scale and liquidity. (cvca.ca) Federal policy adjustments continued to backstop innovation: Budget 2025 advanced enhancements to the enhanced 35% refundable SR&ED investment tax credit and related expenditure limits for qualifying corporations, and the Canada Growth Fund operates as an independent CAD 15 billion vehicle to support strategic innovation investments. (pwc.com)
