The recent difficulties in pre-seed and seed funding have continued into 2025 in both Atlantic Canada and the country as a whole, new data from the Canadian Venture Capital and Private Equity Association (CVCA) indicates.

The national organization on Wednesday issued its statistics for the first quarter of 2025, and the report shows that Atlantic Canadian startups raised a total of $36 million via seven venture capital deals in the first quarter. The total funding is down slightly from a quarterly average of $44 million in 2024, but the concerning part of the report comes when we dive into the numbers.

The CVCA reported there were four deals worth $29 million in Nova Scotia, one deal worth $6 million on Prince Edward Island, and two rounds worth $1 million in New Brunswick. Though it had been the region’s hottest VC market in 2024, Newfoundland and Labrador reported no deals in the first quarter of 2025.

The numbers jive with two substantial fundings that we reported on in the first three months of the year. In January, Halifax-based medtech company Sound Blade Medical, which uses sonic energy to cut tissue, said it had closed a US$16.5 million (C$23.8 million) Series A funding round. Then in late March, Charlottetown’s PayTic, which modernizes payment operations for financial companies, closed a US$4 million ($5.7 million) extension of its seed round, backed by such investors as Build Ventures, Concrete Ventures and Island Capital Partners.

If we strip out these two multi-million-dollar deals, we’re left with just five deals worth a bit more than $6 million. There were two in New Brunswick averaging $500,000 each, and three in Nova Scotia worth an average of about $1.7 million each.

For a year or more, there have been concerns in the East Coast startup community that early-stage financing has been drying up. It will be one of the main themes in Entrevestor’s 2024 Atlantic Canada Startup Data report, which we will launch Tuesday morning at an event in Fredericton. In fact, the CVCA noted that pre-seed and seed funding are down across the country.

“Pre-seed activity declined quarter-over-quarter, reaching the lowest level of dollars invested in a single quarter since 2021,” said the report, which found $12 million of pre-seed funding. “Seed investment activity in Q1 2025 recorded the lowest number of deals closed in a quarter since 2020 and the third-lowest level of dollars invested since 2021.” The total seed investment for the quarter was $128 million.

For funding rounds of all sizes across Canada, the CVCA reported $1.26 billion being raised across 116 deals, matching the dollars invested in the first quarters of 2023 and 2024, but with fewer deals closed. It said five mega-deals accounted for $576 million or 46 percent of the total.

Portions of the report that pertained to Atlantic Canada included the observation that Halifax was the eighth most-active city in the country for VC, with three deals worth $25 million. Among the government VC funds, Invest Nova Scotia ranked No. 5 with three deals worth $1 million, while the New Brunswick Innovation Foundation was No. 6 with two deals worth $1 million.