3 Reasons to be Optimistic about Canadian Tech 📈🚀
A recap of Tech Thursday with Canada’s top VCs from across the country!
A couple of weeks ago, we brought together 3 venture investors from across Canada. They spoke only a day after the BDC’s latest State of Canadian Venture Capital Report. Here is a recap of the top ideas from the panel, and why they remain optimistic about the state of Canadian Venture Capital. 👇
First, what did the BDC report say? Well, it paints a pretty bleak picture, there’s no sugarcoating it:
Key Statistics:
Returns are slipping, with the 10-year Internal Rate of Return (IRR) down to 10% in 2024
Seed-stage funding has dropped by nearly 50%
Many startups are running on much shorter financial runways
But despite the report, last week’s Tech Thursday session, ‘Investing in Canada: Capital in a Time of Building’, brought together investors who had a much more hopeful and forward-looking take on where Canadian tech is headed next.
The panel featured:
Eileen Li (Vice President, Vertu Capital)
Roland Boram (Senior Associate, Kensington Capital Partners Limited)
Prashant Matta (Managing Partner, Panache Ventures)
Moderated by Thomas Farran (Associate, Longbow Capital)
From Left: Thomas Farran, Prashant Matta, Eileen Li, and Roland Boram
3 Reasons for Optimism about the Canadian Ecosystem 📈:
1. Founders are Building Global Companies from Right Here at Home
Despite the BDC’s relatively bleak report, each of the panelists shared optimism for the future of Canadian companies, from American investor interest, to increased global ambition from Canadian founders.
Why this is important: Canadian founders are no longer just building for local markets, rather they’re creating globally competitive companies with roots in Canada. Despite Canada’s smaller size, its ecosystems in Toronto, Calgary, and Vancouver offer strong talent, community support, and a cost advantage, serving as powerful launchpads to international markets.
2. Canadian Founders are using AI to radically improve efficiency
The panel agreed on the transformative benefits that AI can provide, emphasizing the need for a strategic plan to utilize it.
Why this is important: Canada’s VC ecosystem isn’t just chasing AI hype; it’s backing startups using AI to radically improve efficiency, enable smaller teams, and unlock overlooked opportunities. AI levels the playing field, and Canada’s technical talent is well-positioned to capitalize.
3. Canada’s Capital Gaps Are a Weakness… And a Massive Opportunity
“What ends up happening a lot is that founders get to $5, $10, maybe $15 million ARR, and when they finally look up, there’s no local option to support them. So they end up selling early...” - Eileen Li
Why this is important: Yes, Canada’s venture funding has gaps, especially in the later stages, but that gap between early-stage companies and late-stage scale is now being targeted by funds like Vertu. These investors see the opportunity to anchor Canadian growth stories at home, rather than letting them exit early to foreign buyers.
Hot Take:
Canada’s Risk Profile, from Our Investors and Our Founders, Needs Change
The panel echoed the BDC’s point that Canada’s risk profile is relatively conservative with a focus on safer, later-stage investments, while U.S. investors are more open to risk, and US clients are more open to tech solutions (but will drop solutions that don’t work faster).
Why does this need change? It is vital that Canada continues to support early-stage Canadian ventures to build a more robust VC ecosystem, and continue to grow the success of Canadian tech companies.
Parting Thoughts
“The last couple of years have been difficult, but I also think it’s a fantastic opportunity. A lot of the noise has been cleared out.” - Roland Boram
TL;DR
Canada is building global winners: Founders are launching from Canadian cities with global ambition, and succeeding.
AI is Canada’s unfair advantage: Lean, focused applications of AI are giving smaller startups a serious edge.
The ‘missing middle’ is being filled: Investors are stepping in to keep scaling Canadian companies here, not abroad.
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Don’t Miss the Next Tech Thursday!!
June 12: ‘How to Oversubscribe your Funding Round’, co-hosted by Intergen
Including:
Moderator: Khalid Hansraj, Program Director at InterGen
Jenn Hunter, Director of Operations and Co-Founder at PayShephard
Omar Sabbagh, Founder at Bidaya AI
Prateek Sodhi, Co-Founder and CEO at Finofo
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