Startups in Atlantic Canada raised $176 million in venture capital in 2024, their weakest performance in four years, according to new data from the Canadian Venture Capital and Private Equity Association.
On Wednesday, the organization known as the CVCA released its VC data for 2024 showing the funding for the four East Coast provinces fell 15 percent from the previous year. The one bright spot for the region was that Newfoundland and Labrador booked $81 million in VC funding on nine investment rounds.
Nova Scotia was a close second with $79 million on 18 deals. New Brunswick booked $15 million on 15 deals, and Prince Edward Island logged a single VC investment worth $1 million.
Source: CVCA
“Atlantic Canada saw a decline in total investment, with every province except Newfoundland and Labrador experiencing a reduction of half of the levels observed in 2023,” said the CVCA in the report. “Newfoundland and Labrador was the standout, with investment nearly tripling from 2023, reaching $81M across nine deals, mirroring the levels set in 2021.”
The financing deals on The Rock were led by St. John’s-based CoLab Software’s $28 million funding round and a raise of $11 million by Mysa Smart Thermostats.
The Atlantic Canadian VC total for the fourth quarter was $23 million. By province, this broke down as two deals worth $12 million in Newfoundland and Labrador; three deals worth $10 million in Nova Scotia, and three deals worth $1 million in New Brunswick.
The CVCA figures, published in 2024 Venture Capital Market Overview, include only year-to-date totals, not quarterly numbers. Entrevestor has calculated the funding raised in the fourth quarter by subtracting the CVCA’s third-quarter figures. The totals do not generally include angel funding.
Though the 2024 total is weak by the standards of recent years, it’s worth remembering that there has been a strong flow of investment capital into the innovation sector in the first half of the decade. In spite of the pandemic and recent high interest rates, Atlantic Canadian startups in 2020-2024 raised $950 million in venture capital, an average of $190 million a year.
For the years 2015-18, the average VC total for the region was about $107 million. (We excluded the year 2019 because it was distorted by the huge $515 funding round by St. John’s-based Verafin, an undisclosed portion of which was debt.)
The Atlantic Canadian VC funding in 2024 took place against a backdrop of relatively strong investment for the country as a whole. The CVCA said Canadian innovation-driven companies received total investment of $7.9 billion across 592 deals, which it described as “a solid performance”. The overall funding total for 2024 was in between the $6.9 billion total of 2023 and $10 billion in 2022.
“There’s no question that capital is available for later-stage companies, and we continue to see investors backing more mature companies and proven Canadian innovators,” said Association CEO Kim Furlong in a statement. “However, we are seeing ongoing constraints at the pre-seed and seed stages. This decrease is significant for future rounds of financing, ensuring a healthy pipeline of early-stage companies is critical to long-term ecosystem strength.”
