Last year was tough for domestic VC fundraising. Data show 2026 is off to a rough start.<\/p>\n
<\/p>\n
New data from RBCx<\/a> indicates that Canada has seen a \u201csustained decline\u201d in early-stage technology startup funding since the start of 2025, including a particularly rough Q1.<\/p>\n RBCx recently tracked the fundraising activity of over 700 Canadian-headquartered pre-seed and seed companies across a two-year period. It found that 61 startups closed nearly $190 million CAD during the first quarter of 2026\u2014a 40 percent drop year-over-year by both metrics. Despite this decline, the average seed round size has held steady at $3 million, suggesting that companies\u2019 capital needs have remained the same.<\/p>\n \u201cIf this trendline continues, that\u2019s not great [for] the Canadian market.\u201d<\/p>\n Matt Roberts, RBCx<\/p>\n That analysis comes in the wake of a January RBCx report<\/a> that found 2025 was an especially poor year for Canadian venture capital (VC) fundraising, with the smallest amount of total dollars raised since 2016 and the fewest funds closed since 2018. Those fundraising challenges\u2014which have been particularly pronounced among emerging managers\u2014may have begun to filter down to early-stage investment activity.<\/p>\n In an interview with BetaKit, Matt Roberts, managing director of RBCx\u2019s VC coverage, said it is tough to attribute this decline in pre-seed and seed investment to any single factor. He said fewer entrepreneurs starting businesses, and more founders deciding not to raise as early since they can build more with AI, or turning to the US for capital or as a place to establish a company, were possible contributors.<\/p>\n \u201cIt\u2019s something to flag and it\u2019s something to be concerned about,\u201d Roberts told BetaKit in an interview. \u201cIf this trendline continues, that\u2019s not great [for] the Canadian market.\u201d<\/p>\n For his part, Roberts isn\u2019t sure whether we have yet hit the bottom of the market.<\/p>\n RELATED: \u201cA perfect storm\u201d: 2025 was the worst year for Canadian VC fundraising since 2016<\/a><\/p>\n Canada\u2019s five largest VCs swallowed up approximately 80 percent of all the capital raised in 2025. But they are also feeling the crunch: fundraising among this group has fallen 50 percent since 2021. The rest of the market is just feeling it more acutely: RBCx found that fundraising outside this top five has dropped 90 percent over the past five years, and emerging managers, who typically invest in early-stage startups, have gotten the brunt of that stick.<\/p>\n Growth is also an issue: the Canadian Venture Capital & Private Equity Association (CVCA) recently charted a lack of growth-stage activity<\/a> during the first quarter.<\/p>\n As the CVCA<\/a>, National Angel Capital Organization<\/a>, and Canadian Startup Capital Association<\/a> present competing visions for where the federal government should deploy the $750 million CAD<\/a> it pledged towards \u201cearly growth-stage funding gaps,\u201d Roberts said there are presently issues \u201cat every stage of the capital stack\u201d in Canada\u2019s innovation market.<\/p>\n Feature image courtesy RBCx.<\/p>\n","protected":false},"excerpt":{"rendered":"Last year was tough for domestic VC fundraising. Data show 2026 is off to a rough start.
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