Canadian VC Spending Rises as Deal Volume Continues to Slide
AI-generated image · Bay Street Wire
A 17 percent jump in capital deployment masks a five-year decline in total deal count, signaling a concentration of wealth in fewer, larger rounds.
Canadian venture capital deployment saw its first increase since 2021 during the first half of 2026, according to reporting from BetaKit. Data from the Canadian Venture Capital & Private Equity Association (CVCA) shows $2.69 billion CAD was invested across 250 deals from January to July, marking a 17 percent increase over the same period last year.
Despite the rise in dollars, the total number of deals has fallen for five consecutive years. Benjamin Bergen, CEO of the CVCA, told BetaKit that while the modest increase is encouraging, "one thaw doesn’t make a spring." The trend toward capital concentration is evident in the year's largest rounds: Beacon Software's $313-million Series C, Dominion Dynamics' $139-million Series A, and Koho's $130-million Series E in June.
Bergen noted that firms may be requiring more capital or waiting longer to raise from institutional sources, a pattern mirrored in the US. According to BetaKit, US firm Carta found that in 2025, US startup investment grew by 130 percent despite deals increasing by only three percent.
Sector-wise, information and communications technology (AI and software) dominated, accounting for 65 percent of deals, while life sciences activity plummeted 39 percent. The venture arm of the Business Development Bank of Canada (BDC) remained the most active investor with 34 deals totaling $831.5 million, more than double the activity of Inovia Capital.
Meanwhile, the federal government has pledged $1.75 billion to support domestic VC, including a $750-million early growth-stage envelope and the Venture and Growth Capital Catalyst Initiative. While the CVCA argues these funds should scale tech companies, the National Angel Capital Organization has urged the government to prioritize angel networks and seed-stage investments.