Canada's venture capital market experienced a significant boost in the third quarter of 2025, propelled by a handful of massive deals, according to a new report from the Canadian Venture Capital and Private Equity Association (CVCA). Investment levels climbed to $1.8 billion across 123 deals, up from $1.6 billion in the second quarter and $1.4 billion in the first.
Despite this quarterly improvement, the broader picture for 2025 shows a stark decline. Venture activity so far this year has reached $4.9 billion across 386 deals. This figure pales in comparison to the $8.6 billion invested throughout all of 2024 and the $7.1 billion deployed in 2023.
Megadeals Dominate the Investment Landscape
The third quarter's performance was almost entirely driven by megadeals—transactions valued at $50 million or more. These large investments pulled in a staggering 75% of all capital deployed in Q3 and account for 60% of the total VC investment year-to-date, despite representing only 5% of the total number of deals.
The CVCA noted that this trend reflects a strategic shift in the market. "Deal volume continues to trend downward, reflecting a strategic shift toward fewer, larger and more deliberate investments," the association stated.
Leading the charge was Toronto-based artificial intelligence startup Cohere Inc., which secured the year's largest VC deal. The company raised a monumental $689 million from investors including chip giants Nvidia Corp. and AMD Ventures LLC, as well as Canadian players like Inovia Capital Inc. and the Healthcare of Ontario Pension Plan. Cohere later secured an additional $100 million in the same quarter.
Other notable megadeals included Moonvalley AI (legally ContentFly Inc.), which raised $121 million in a seed round for its AI video generator, and Blue J Legal Inc., which secured $167 million for its AI tax software. Richmond, B.C.-based delivery startup UniUni also contributed, raising $95 million.
Sector Performance: ICT Rebounds, Life Sciences Holds Steady
The internet, communications, and technology (ICT) sector saw a strong rebound in the third quarter, with investment nearly doubling to $1.2 billion across 54 deals from the previous quarter. However, when viewed annually, the sector's performance has weakened considerably. Year-to-date, ICT investments stand at nearly $2.7 billion, a significant drop from the $4.9 billion invested in all of 2024 and $6.4 billion in 2022.
The life sciences segment recorded $1 billion invested over 82 deals so far in 2025, down from 2024’s full-year total of $1.5 billion across 142 deals. The CVCA highlighted that alongside agribusiness, life sciences "stand out as areas of strength, with investment levels approaching or surpassing year-end 2024 totals."
Seed and Growth Stages Show Resilience
Despite an overall slowdown in venture activity compared to a year ago, certain investment stages demonstrated notable resilience. Seed-stage investments have totalled $579 million year-to-date, a figure that is only 12% below the full-year 2024 levels, even with fewer deals being made.
Growth-stage investing showed even more vigor, with deal volume jumping 71% year-over-year in the third quarter. This surge highlights a growing investor appetite for later-stage companies. The total amount invested in growth-stage deals so far in 2025 is $995 million, compared to $1.4 billion during the entirety of 2024.
