Canada’s largest venture capital (VC) investor is trying to get the nation’s tech funding back on track.
What happened: BDC’s VC arm, BDC Capital, is setting aside a fresh $950 million for two of its VC funds in an effort to give late-stage Canadian tech startups a much-needed shot in the arm. The move comes amid a prolonged funding slump and tariff-driven economic uncertainties.
Why it’s happening: If a Canadian tech startup isn’t in fintech or AI, chances are it hasn’t gotten much VC attention as of late. Those two fields have attracted the lion’s share of VC funding, which has remained sluggish since 2022 when inflation and ensuing interest rates choked investments.
- While VC funding increased to ~US$7 billion in 2024 from US$6.6 billion in 2023, it’s a far cry from the record US$13.7 billion raised in 2021.
- The problem is especially pronounced for late-stage startups, which raised half as much money in 2023 as they did in 2022, per recent BDC data.
Why it matters: If promising companies can’t get funding at home, they’ll continue to search for it abroad. As BDC Capital’s executive vice-president, Geneviève Bouthillier, told The Logic, “We want Canadian funding to Canadian companies to keep our great businesses in Canada.”
Yes, but: BDC Capital has struggled to generate returns recently. It reported a $220 million loss in the 2024 fiscal year that shaved its balance down to $2.86 billion of assets — and raises questions about whether it can find profitable investment opportunities.—QH