[Editor's note: This is the latest in a series of articles highlighting segments of our Atlantic Canada Startup Data Report.]

The event that set the tone for 2025 in Nova Scotia’s innovation community was an announcement that came out of the blue in January. Two-year-old Sound Blade Medical said it had closed a US$16.5 million Series A funding round, which will help fund development and clinical trials of its product, an “advanced hand-held histotripsy technology.” In the simplest terms, the company has developed a compact tool that uses sound waves to cut tissue, including tumors.

The company was co-founded by CEO Jeremy Brown, who had previously co-founded Halifax-based Daxsonics, another company working with ultrasound technologies. This group is beginning to have the kind of impact that ABK Biomedical has had, creating a cluster of medical device entrepreneurs collaborating on new products. One member of the Daxsonics group, Dr. Annika Benson, won the Falling Walls competition in September for a hand-held ultrasound device that can detect tumor tissue during brain surgery.

The Sound Blade funding also reflected a broader trend: medtech companies dominated fundraising in the province in 2025. The good news is that life sciences and medtech companies are attracting significant investment.

In total, Nova Scotian companies raised $145.2 million in equity funding in 2025, up from $88.7 million the previous year. Though it fell short of the record funding years earlier in the decade, it was still a strong performance, especially considering that Nova Scotia had never raised more than $100 million in a single year before 2021.

According to our databank, 40 Nova Scotian companies raised capital in 2025, though six of these startups received investments only from their founders.

Hub for AI

Alongside its emergence as a medtech hub, Halifax is becoming a centre for artificial intelligence. While St. John’s remains the undisputed leader in producing AI success stories, Halifax has built a strong ecosystem around the technology. Organizations such as Collect, Volta and Deepsense are helping AI developers and software engineers build a growing community in the Nova Scotian capital. In addition, a range of programs is helping traditional SMEs adopt AI to improve productivity.

While life sciences and medtech are driving fundraising, AI companies are fueling growth in the number of startups in the city. Some of these companies are generating revenue almost immediately and scaling quickly. We identified 62 new companies in Halifax, up from 38 the previous year. The growing number of solopreneurs makes it harder to track new companies, and we believe there are several AI-driven enterprises that we have not yet identified.

The bad news continues to be the paucity of mid-sized deals. In our 2024 report, we examined Nova Scotian startups that raised between $100,000 and $999,999. We found that 30 companies raised a total of $9.8 million, and 27 percent of that total came from founders. In 2025, only 11 companies reported rounds in the $100,000-to-$999,999 range, raising a combined $3.7 million, one-fifth of which came from founders.

It is possible that we are seeing fewer of these mid-sized deals because fewer founders are completing our survey. It is also apparent that AI-driven companies are not courting investors in the same way SaaS companies did in the past. However, both the data and anecdotal evidence suggest that the shortage of mid-sized funding remains a persistent problem.

Employment and revenue growth, by contrast, are improving. Nova Scotia has the largest innovation workforce in the region, and after recent declines it posted an 8.6 percent increase in 2025. The gains were broad-based, with particularly strong growth in the AI and IT segment, where employment increased by about 11 percent.

Revenue Growth

Revenue growth was especially surprising, coming in at almost double the regional figure. Nova Scotian companies reported a 51 percent increase in revenue, compared with 31 percent across Atlantic Canada. We believe the Nova Scotia data is more accurate than that of the other three provinces because of the high response rate to our survey. Thirty-five Nova Scotian companies, representing all stages of the startup lifecycle, provided full revenue data, and the results showed strong growth. This reinforces our belief that revenue growth among Atlantic Canadian startups is stronger than the headline numbers suggest.

We had been concerned that Nova Scotia’s oceantech sector was lagging, given that the region’s most prominent player, Kraken Robotics, is based in Newfoundland and Labrador. However, there was considerable activity in the sector during 2025. Mara Renewables, which produces omega-3 products from algae, raised US$9.1 million from S2G Investments, a Chicago-based fund that also invests in Halifax’s ReelData. Other notable raises came from companies such as Freshr and Voltai.

Dartmouth-based Planetary Technologies signed a US$31.3 million agreement with Frontier to remove 115,211 tonnes of carbon dioxide from the atmosphere between 2026 and 2030. The oceantech ecosystem also benefited from the opening of DIANA’s North American base at COVE in Dartmouth.

One area of concern is the loss of momentum in Cape Breton over the past few years. In 2022, our databank included 55 companies based in Sydney, but that number has fallen to 30. There are still standout companies in the community, including cybersecurity company Carbide and materials company AlterBiota. Dispersa, which is based in Laval, Que., and Sydney, closed a $5.8 million funding round early in 2025. Overall, however, there has been less news emerging from the Cape Breton startup community than there was earlier in the decade.