The report finds that late-stage investments and AI deals dominated VC activity
Despite high borrowing costs and their implications for consumer spending and business operations, the economic outlook for 2024 has proven significantly more stable than in 2023. Late-stage investors returned to the venture capital market in this environment, seeking out established, revenue-generating companies, according to a new report on venture capital financing from Osler Hoskin & Harcourt.
The report highlights a notable increase in the number of up rounds – funding rounds where companies raise capital at higher valuations than in previous rounds – rising to 73 percent in 2024 from 58 percent in 2023. Meanwhile, flat rounds dropped from 26 percent to 12 percent, and down rounds slightly declined from 16 percent to 15 percent.
The report describes 2024 as the "year of the mega-deal," referring to financing transactions exceeding $50 million. These mega deals dominated the landscape, accounting for nearly two-thirds of the capital invested in the financings covered by the report.
Companies in the information technology and artificial intelligence sectors were leading in this trend. Together, they represented 41 percent of all financings in the report. AI companies accounted for 18.1 percent of all deals but drew 26.3 percent of total capital invested.
The largest investment rounds included those in technology companies Clio (US$900 million) and Cohere (US$500 million).
“Investments like those in Clio and Cohere were reflective of a broader trend in 2024: the welcome return of activity levels for late-stage venture financings, with approximately 75 percent of all capital invested in financing transactions captured in the Deal Points Report invested at the Series B and beyond stages,” the report reads.
According to Michael Grantmyre, a partner at Osler’s emerging and high-growth companies group, the report challenges a common perception among clients that relocating or establishing their businesses in the US may be a better strategic move.
The report also shows that Canada’s tech financing remains geographically concentrated, with Ontario, British Columbia, and Québec collectively representing 75.1 percent of all deals and 85 percent of capital invested. Alberta, however, showed notable progress, increasing its share of closed financings to 12.5 percent, up from 8.4 percent the previous year.
“You can create global businesses in Canada, get all the benefits that follow, and create jobs here… Canada is really maturing as far as the technology ecosystem goes,” Grantmyre says.
The report also highlights increased participation from women-led ventures. In 2024, 21.3 percent of the companies captured in the report were founded by women – up from 14.7 percent in 2023. However, women-founded businesses accounted for just 12 percent of the total capital raised, with most of these investments occurring at the Series Seed and Series A stages.
The lawyer says 2024 will be marked by a different kind of uncertainty – primarily political and economic developments in the United States. He points to the Q1 report by the Canadian Venture Capital and Private Equity Association (CVCA), which shows that investors are not retreating from venture capital but are taking more time to evaluate potential investments.
With uncertainty surrounding potential policy changes under the Trump administration, he says investors are grappling with more than just economic variables like interest rates. Unlike rising borrowing costs, which he says can be factored into valuations, geopolitical and trade uncertainties, especially around tariffs, are more challenging to quantify, he adds.
Ryan Unruch, a partner in Osler’s same practice group, says many companies returning to the market in 2025 will face a very different landscape than in 2021–2022.
He says it was easier to attract investors’ interest back then. Now, instead of getting five or six term sheets, companies may receive only one or two – and not necessarily at higher valuations. As a result, he says more down rounds could emerge as startups exhaust their runway extensions and are forced to raise more capital.
Despite this, Unruch says that early-stage activity remains strong.
The two lawyers say that few of the firm’s tech clients currently raise tariff concerns, mainly because many Canadian startups remain focused on software or IP-based products.
Even for hardware-heavy companies, tariff exposure is limited in the early stages of development. Many are not yet selling at scale or generating meaningful margins.
Instead, Grantmyre says these companies often provide their products to early customers at little or no cost to build trust, run pilot programs, and validate performance.
“They’re not assuming large profits at that stage.”
Despite short-term headwinds, Unruch says the Canadian venture capital landscape is maturing in step with its US counterpart. He adds that the growing presence of American investors in Canada has helped push local deal-making practices, valuations, and expectations toward convergence with Silicon Valley standards.
“We are converging over time, and I think that trend will continue.”
