About 8.5 per cent of startup funding rounds in 2024 were at a lower valuation than the  previous one, down from 13.3 per cent in 2023 and nine per cent in 2022, according to a report from law firm Torys. (The Logic)

Talking point: The study of 148 venture financings in 2024 found “a gradual return to a more balanced financing environment,” compared to tough times for venture capital fundraising the two previous years. While rising valuations are good news for Canada’s tech sector as a whole, the report cautioned that big fundraises by AI startups—which may be “less grounded in fundamental metrics”—could be skewing the numbers. The report also found 2024 deals were less likely to include the favourable terms startups used to incentivize reluctant investors in 2023 and 2022, such as senior liquidation preferences. Seed and Series A financing accounted for 76.4 per cent of deals in the sample, indicating “a large opportunity in the Canadian market for the development of later-stage startups,” according to the report.