Venture capital investors in Canada finished 2025 with a surge of deal-making, with a record amount of money deployed in a fourth quarter since at least 2013. 

Startups and scaleups raised $3.8 billion across 165 deals in the last three months of the year, accounting for nearly half of all capital invested in 2025 according to data from the Canadian Venture Capital and Private Equity Association.

For the full year, investors allocated $8 billion in 571 deals. That’s down six per cent from 2024, while deal count fell 12 per cent. 

The late-year spike in investments does not necessarily signal a broad reopening of the VC market, which slowed drastically after 2021. Rather, according to David Kornacki, director of data and product at CVCA, the numbers reflect a trend towards fewer deals. 

The average size of a funding round in 2025 was about $14 million, climbing to over $23 million in the fourth quarter, the highest quarterly average since CVCA began tracking data in 2013. Megadeals—those worth $50 million or more—accounted for roughly two-thirds of total capital raised last year, with a $1-billion investment in autonomous vehicle startup Waabi attracting more than a quarter of all venture capital in Q4.

The concentration of money in fewer deals shows up clearly across different stages of fundraising. Pre-seed and seed investments declined slightly compared to 2024 levels, while Series A and B deals dropped sharply. Investments at these stages fell to just two-thirds of 2024 levels, with the deal count falling 28 per cent year-over-year. Meanwhile, later-stage and growth rounds increased dollars invested 25 per cent and 60 per cent, respectively, compared to 2024. 

The data also shows a steep drop in U.S. participation in Canada’s venture capital market. Americans invested in 25 per cent of deals last year, down from 32 per cent in 2024, and their involvement in megadeals declined 13 per cent year over year. 

By sector, information and communication technology startups, which would include most AI companies, dominated fundraising in 2025, pulling in about $5 billion, or nearly two-thirds of all venture investment. Life-sciences funding dropped 47 per cent year over year to $837 million. The number of cleantech deals was fairly stable, though funding dropped from nearly $1.2 billion in 2024 to $660 million last year, while startups in the agriculture space saw a 78 per cent jump in VC financing, with $251 million over 39 deals. 

More companies raised venture debt to fuel their business without giving away equity. There were 69 such transactions worth a combined $1.4 billion in 2025, including 19 deals worth nearly $679 million in the last three months of the year, another quarterly record.

The exit market, meanwhile, was slow in 2025. Venture-backed companies recorded just 29 exits worth $358 million, and no IPOs. Instead, investors increasingly relied on secondary transactions to generate cash returns. Those deals—which the CVCA counts separately from overall exit or deal activity—reached $1.3 billion in 2025, up 56 per cent year over year but down 20 per cent from the 2023 peak. 

Kornacki said the tight exit market has a ripple effect on Canada’s entire venture capital market. “That shows up as slower progression from company formation to scale and liquidity,” he said, “even when quarterly figures improve.”