Canada Tech Startup Ecosystem Continues to Attract Substantial Funding, Despite Recent Decline – Report

Tracxn, a global SaaS-based market intelligence platform, has released its Geo Quarterly Report: Canada Tech – Q3 2023.

The report, based on Tracxn’s extensive database, “provides insights into the Canada Tech space.”

The Canada Tech startup ecosystem “received its highest-ever funding of $5.12 billion in Q2 2021 with May 2021 being the highest-funded month recorded to date.” The second quarter of 2022 is the highest funded quarter of 2023 “with $1.96 billion funding after which a 57% decline can be observed in Q3 2023”

Similar to other major economies, the Canadian tech startup ecosystem is also “facing the effects of funding winter caused by global macroeconomic uncertainties.” Funding into the Canada Tech space slid “to $808 million, a 57% fall from $1.9 billion raised in Q2 2023, and a 27% decline from $1.1 billion raised in Q3 2022.”

Late-stage investments worth $464 million “were recorded in the third quarter of 2023, a huge jump from $152 million in Q3 2022, but a 51% fall from $946 million in Q2 2023.”

No new Unicorns emerged “in Q3 2023, as against one new Unicorn in Q3 2022. No IPOs took place in the third quarter of 2023, similar to the two preceding quarters.”

However, 35 acquisitions took place, “significantly lower than 44 acquisitions each in Q2 2023 and Q3 2022.”

Among Canadian cities, Toronto took the lead “in terms of total funding. Startups based in Canada’s financial capital raised $239 million in Q3 2023, followed by companies headquartered in Montreal ($215 million) and Ottawa ($132 million).”

BDC, Export Development Canada, and Invest Quebec are “the most active investors in this space. Accelerate Fund, Techstars, and Digital Currency Group emerged as the top seed-stage investors in Q3 2023, while Craft Ventures, Comcast Ventures, and OpenView were the top early-stage investors. Sapphire Ventures, PSG, and Epiq Capital Advisors were the most active late-stage investors in Q3 2023.”

As covered, Tracxn Technologies Ltd. is “a data intelligence platform for private market research, tracking 2 million entities through 1800+ feeds categorized across industries, sub-sectors, geographies, and networks globally.”

It claims to have “become one of the leading providers of private company data and ranks among the top five players globally in terms of the number of companies and web domains profiled.”

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