With Atlantic Canadian startups raising more than $237.6 million in equity funding this year, improving on last year’s total, the region’s venture capital landscape remains bifurcated between established businesses with traction and young startups still finding their feet.

Despite a headline number at least $7.6 million higher than last year, more than half of total funding went to just four companies that together raised $138.7 million. And of that half, the majority went to a single business: Dartmouth cleantech star CarbonCure when it raised US$80 million, or about C$105.7 million, setting a new record for Nova Scotia.

Entrevestor has calculated a preliminary figure for fundraising in 2023 by taking the deals anounced this quarter and adding them to the Canadian Venture Capital and Private Equity Association’s year-to-date figure from the end of the third quarter. (The organization's year-end totals will be announced early in 2024.) The final sum could prove to be higher if some deals have not been revealed to media, though history suggests it is unlikely to increase dramatically. This figure also does not include at least one round for which the company declined to reveal a dollar value.

None of the four largest raises happened in the fourth quarter. Two were also denominated in American dollars, reflecting an Atlantic Canadian fundraising landscape that has in recent years seen a growing influx of capital from elsewhere in North America and the world.

The concentration of funding among just a handful of deals from later-stage startups deepens a trend that Entrevestor first highlighted in our 2022 Atlantic Canada Startup Data Report, when we reported that growth in the ecosystem was slowing, “though a core of leading companies continued to thrive.” 

That year, our research showed slowing job and revenue growth in the region, along with a decrease in the number of new companies, but also that a handful of more mature startups had managed to raise more than $200 million of equity funding. Much like this year, that figure represented more than half of the total raised across all sizes of businesses.

Here’s a look back at the quartet of venture capital deals we believe defined East Coast fundraising in 2023:

Jan. 11 — ReelData Raises US$8 million

ReelData, a Halifax startup that makes artificial intelligence for land-based aquaculture, started the year with abandon when it closed a US$8 million (C$10.7 million) Series A funding round as it prepared to commercialize its second product.

It's first was an AI system for determining how much fish farmers should feed their animals and thereby reducing waste, dubbed ReelAppetite. Its second is software for tracking biomass — estimating the weight of fish, essentially — called ReelBiomass.

“Our industry is a new one,” said CEO Mathew Zimola at the time, referring to land-based aquaculture. “The tank is kind of a black box.

“It’s really hard to understand what’s happening under the water. So what we are doing is we’re using artificial intelligence to feed fish and weigh fish, which allows farmers to increase their production because fish are growing faster.”

Founded in 2018 by computer science grads Zimola and Hossein Salimian, ReelData had previously raised $2.5 million from Chicago-based S2G Ventures’ oceans fund.

The Series A was led by Buoyant Ventures, also Chicago-based, with billionaire Lukas Walton’s Nest Family Office also investing and S2G re-upping its stake. Walton, whose grandfather founded Walmart, has garnered himself a reputation for investing in sustainable food companies.

“Our plans are to scale and bring our solution to as many farms as possible,” said Zimola. “We’re not a cheap company to purchase software off of, and we have a backlog of people that want the software we’re developing, which we’re making more and more scaleable.”

April 14 — GIT Raises $10.2 Million

Halifax-based marine coatings maker Graphite Innovation & Technologies, or GIT, raised a $10.2 million Series A funding round led by BDC Capital’s ClimateTech Fund as it looked to ramp up its commercialization efforts.

Among the investors was U.K.-based Stolt Ventures, the investment arm of Stolt-Nielsen, which was founded in 1959 and now operates more than 150 tanker ships, as well as fish farms and shipping terminals. Earlier the same month, GIT had inked a two-year deal to apply its coating for ship propellers to 25 vessels owned by the London maritime giant.

“The Series A funds will be used to expand production capacity of GIT’s sustainable marine coatings, grow its global customer base, invest in the development of next generation coatings, and build strategic partnerships to accelerate commercialization,” said GIT at the time.

Provincial business development agency Invest Nova Scotia, which had previously invested $500,000, re-upped its stake by $2.5 million. Other investors included the France-based Seventure Partners’ Blue Forward Fund, Farvatn Ventures from Norway and Ontario’s Melancthon Capital. Seventure Partners has the equivalent of just under C$1.3 billion in assets under management.

Founded in 2017 by Chief Executive Mo AlGermozi and Marciel Gaier, GIT manufactures a suite of graphene coatings designed to prevent corrosion and improve the durability of ships' hulls, dams and other equipment subject to extreme environments.

Graphene is a carbon-based material that is 200 times stronger than steel and efficiently conducts heat and electricity. It also serves to reduce friction, in turn reducing ships’ fuel consumption and greenhouse gas emissions.

May 25 — Spellbook Raises US$10.9 Million

St. John’s-based Spellbook, the maker of artificial intelligence-enabled contract-drafting software, raised a US$10.9 million or C$14.8 million seed round from investors including Thomson Reuters, the Toronto data and publishing giant that controls a massive percentage of the legal software market.

The company originally did business as Rally, with Spellbook being one of several products in its lineup. Its success when it launched in Sept. 2022 led CEO Scott Stevenson and his team to adopt it as the name of the company. At the time of the raise, Spellbook was used by 600 law firms, with another 54,000 waitlist signups.

Other investors in the round included San Francisco’s Moxie Ventures, led by former Twitter executive Katie Stanton, as well as Montreal-based Inovia Capital, Miami specialist venture capitalists The LegalTech Fund and Bling Capital, likewise from Miami.

The company had previously closed a $750,000 funding round in 2019 with a group of investors that included Venture NL (the fund managed by Pelorus Venture Capital), St. John’s-based Killick Capital, Halifax-based Concrete Ventures and Toronto-based Good News Ventures.

Stevenson said at the time the money would go towards doubling the size of Spellbook’s team, which then stood at 17 people, scaling up across essentially all departments in an effort to capitalize on its growing traction.

“We launched the Spellbook product as an experiment around Sept. 1 — so this was before the ChatGPT craze,” said Stevenson. “And it just completely exploded in usage and revenue.

“We had 8000 lawyers sign up to our waitlist last month and we do not have a team to support that.”

July 12 — CarbonCure Raises US$80 Million

CarbonCure set a Nova Scotian record for the largest-ever single funding round when it closed its US$80 million deal led by Swiss impact investor Blue Earth Capital.

The funding syndicate also included returning investors Breakthrough Energy Ventures, backed by Bill Gates and Jeff Bezos, along with Taronga Ventures, Amazon’s Climate Pledge Fund, the Microsoft Climate Innovation Fund and 2150. New strategic backers included BH3 Growth Equity and Samsung Ventures, both of which use CarbonCure’s technology.

“Our new and returning investors participating in this round are strategically very aligned with our mission,” said CEO Robert Niven at the time. “Beyond their robust financial backing, these firms are force multipliers of innovation and sustainability, especially in the built environment.

“Many are end users of CarbonCure concrete, and they are acting as catalysts by sending strong market signals to concrete producers that lower carbon materials are a priority.”

CarbonCure, which has 100 employees and sells its technology for sequestering captured carbon dioxide in concrete in 30 countries, added that the new funding would help accelerate its mission to remove millions of metric tons of carbon dioxide emissions from the atmosphere each year. Specifically, the money was earmarked for speeding up the company’s growth plans and advancing product development.