Three of the four Atlantic provinces continued a trend of weak fundraising performance in the second quarter, new data from the Canadian Venture Capital and Private Equity Association shows, but Newfoundland and Labrador helped salvage a comparatively robust $77 million total for the three months ended June 30.

Newfoundland raised more than the other three provinces combined at $56 million from four deals, though some of that total is tied to a $27 million raise by St. John's-based Spellbook that has its roots in the first quarter. Nova Scotia companies raised $13 million from six deals, New Brunswick startups $7 million from eight deals and P.E.I. $1 million from a single deal.

The CVCA figures, published in its H1 Venture Capital Market Overview, include only year-to-date totals, not quarterly numbers. Entrevestor has calculated the funding raised in the second quarter by subtracting the CVCA’s first quarter figures. The totals do not generally include angel funding.

“Investment activity in Atlantic Canada saw an uptick, with Newfoundland and Labrador leading the region by securing $56 million across four deals, primarily driven by a $27 million Series A round for St. John's-based Spellbook,” says the CVCA in the report.

Thanks to Newfoundland’s overperformance, the second quarter funding total represents an improvement over the first quarter’s $35 million figure, as well as the same period a year ago, when East Coast companies raised just $16 million.

The Newfoundland deals were split evenly between information technology and life sciences companies, while in Nova Scotia, life sciences was more dominant, accounting for four out of six funding deals in a departure from historical trends that have positioned the IT sector as the fundraising leader.

Nationally, startups raised $2.3 billion in the second quarter, up from $1.3 billion in the first quarter. The VC market continues to suffer the effects of high interest rates, with global totals having broken a seven-year low earlier this year, according to business intelligence provider CB Insights.

“Key sectors like life sciences and information and communication technologies continue to draw substantial investment, underscoring their importance in fostering innovation,” wrote CVCA Chief Executive Kim Furlong.

“However, the decrease in seed deals raises concerns. Early-stage investments have returned to 2020 levels, presenting obstacles for new entrepreneurs and potentially affecting the development of future high-growth companies necessary for the industry's long-term well-being.”