All dollar ($) figures in Canadian dollars unless otherwise noted.
TORONTO, Aug. 24, 2026 /CNW/ — Canadian venture capital (VC) investment totalled $2.481 billion across 248 financings in the first half of 2026, representing a 12% decline from $3.215 billion and a 19% decrease from 306 financings in H1 2025, according to the H1 2026 Canadian Venture Capital Report – Summary Report released by CPE Analytics.
International investor participation continued to soften through the first half of 2026, while U.S. investors increased their activity in Q2, with their share of Canadian VC investment rising to 56% from 40% in Q1 2026—nearly matching the 2025 high of 58%.
On the VC fundraising front, 29 Canadian VC funds secured $917 million in capital commitments. Excluding BDC’s $450 million in allocations, Lumira Ventures and Version One Ventures each held closings for two funds, together accounting for 66% of private VC fundraising and 33% of total VC fundraising during the period.
On the exit front, GSK plc’s (LSE/NYSE: GSK) US$950 million acquisition of 35Pharma—primarily backed by U.S. venture capital investors—provided a notable bright spot in an otherwise subdued liquidity environment.
H1 2026 Key Observations
Venture Capital Disbursements in Canada: Where Capital Flowed
-
Early-stage companies raised $1.616 billion, capturing 57% of total capital deployed, up from 45% in 2025. Growth- and later-stage companies attracted $327 million, representing a 12% share, down sharply from 37% in 2025.
-
British Columbia regained second place among Canadian VC destinations, attracting $508 million, narrowly ahead of Quebec companies, which raised $491 million. Ontario remained the dominant destination, with $1.609 billion flowing to companies in the province, representing 57% of total capital deployed.
-
Toronto-based companies raised $1.41 billion. Montreal, Vancouver, Ottawa and Calgary were the only other Canadian cities to attract $100 million or more, ranking second, third, fourth and fifth, respectively.
-
ICT companies attracted $1.566 billion, representing 55% of total funding, down from 59% in 2025. Cleantech companies raised $365 million, maintaining a 13% share, compared with 14% in 2025. Life sciences companies raised $273 million, representing 10% of total funding, down from 16% in 2025. Aerospace and defence companies recorded a significant increase, raising $159 million, or 6% of total funding, compared with $7 million and less than 1% in 2025.
Venture Capital Funding Sources and Investors in Canada: Where Capital Came From
-
U.S. investors—historically among the most reliable sources of capital for Canadian startups—increased their activity in Q2 2026, raising their share of total funding to 56% from 40% in Q1 2026. International investor participation remained subdued.
-
Investors from 25 non-U.S. countries or regions participated in financings involving Canadian companies, down from 55 in 2025.
-
U.S. private VC funds regained their position as the leading investor type in Canadian companies in H1 2026, investing $808 million. U.S. mutual and hedge funds ranked second with $404 million. Canadian private VC firms, government funds and corporate funds rounded out the top five investor categories, investing a combined $776 million—still below the total invested by U.S. private VC funds.
-
Among Canadian investors, Ontario led with $523 million, followed by Quebec at $423 million. British Columbia, Alberta and Saskatchewan investors invested $89 million, $44 million and $12 million, respectively.
Venture Capital Fundraising in Canada
-
Twenty-nine Canadian VC funds raised $917 million during the period.
-
BDC Capital, Lumira Ventures and Version One Ventures each held closings for two funds, leading Canadian VC fundraising activity in H1 2026.
-
If H1 2026 fundraising continues at the same pace through the second half of the year, 2026 would rank as the second-lowest VC fundraising year on record, with an annualized total of $1.834 billion—just ahead of $1.717 billion in 2023.
Venture Capital Exits in Canada
-
Canada has not recorded a venture-backed initial public offering (IPO) since 2021.
-
No notable secondary transactions were reported during the period.
-
Xanadu Quantum Technologies and General Fusion (in Q3 2026) attracted measured investor interest.
-
35Pharma’s acquisition by GSK plc stood out as a positive liquidity event in an otherwise muted exit environment.
” H1, 2026 was mostly a down period for venture capital in Canada. The number of financings and dollar amounts declined from 2025 levels. Venture capital funds’ own fundraising efforts were on track to becoming the second lowest on record. Venture capital fundraising has been concentrated in a relatively small number of funds, led by BDC vehicles, leaving only crumbs of the bulk of the 29 funds that raised capital. And, Canada continues to not have any venture-backed Initial Public Offerings (IPOs) – a drought that has lasted since 2021. And, importantly, US investors have increased their share of the market in Q2, 2026 to 56 per cent, marginally below the 2025 high of 58 per cent. Historically, US investors have been amongst the most reliable contributors to the Canadian venture scene. As recent events on the trade negotiations front have shown, this reliability cannot be taken for granted going forward and attracting alternative sources of international capital to fuel Canadian companies appears increasingly imperative,” commented Richard Rémillard, President, Rémillard Consulting Group (RCG).
“On this latter score, Canada’s record continues to be abysmal. Other international investors accounted for a mere five per cent of the market in Q2, 2026 up infinitesimally from four per cent in Q1, 2026. This constitutes the lowest level of non-US international funding since 2020. There were only 25 non-US international investors that took part in financings of Canadian firms in H1, 2026, down from 40 in H1, 2025 and 55 for all of 2025. This continuing relative inattention of international investors to the Canadian venture capital landscape runs counter to the strong influx of overall incoming foreign direct investment that has been recorded as well as to the priority attached to attracting such investors by the Canadian government.”
Summary report The full summary report is available on the financings.ca website: https://www.financings.ca/reports/
Methodology
Included
-
Equity and quasi-equity investments made directly into companies.
Excluded
-
Secondary transactions or investor/shareholder exit events in which no capital flowed to the company.
-
Acquisitions undertaken for expansion purposes (M&As).
-
Financings involving foreign-headquartered or foreign-domiciled companies with Canadian subsidiaries.
Rémillard Consulting Group (RCG) Rémillard Consulting Group (RCG) is an Ottawa-based bilingual consulting firm that provides private-sector, government, and trade association clients with research-grounded advice on business issues and public policy matters related to the Canadian financial services industry. For more information: rremillard@bellnet.ca
CPE Analytics CPE Analytics is a leading Canadian source of financing intelligence, providing comprehensive, verified, and unbiased insights into private and public financings, initial public offerings (IPOs), M&A activity, and fundraising by professional investment firms. Its venture capital coverage includes detailed intelligence on the source of funding by country and investor type. CPE Analytics is the data analytics division of CPE Media & Data Company. More information: https://cpeanalytics.ca, https://financings.ca
CPE Media & Data Company Founded by some of Canada’s most experienced private capital and financing research professionals, CPE Media & Data Company is a leading provider of financing news and intelligence in Canada. More information: https://cpecompany.ca/
SOURCE CPE Media & Data Company