According to the Osler Deal Points Report, Canada’s venture capital landscape in 2024 was marked by recalibration rather than recovery.
While total venture funding rose to $3.73 billion USD from $2.2 billion in 2023, the mood of investors shifted toward caution and extended diligence. Deals took longer to close, especially in later-stage rounds, and capital became increasingly concentrated in a handful of high-performing startups.
Shifting investor mindset
The Osler Deal Points Report, based on one of the most comprehensive private datasets of Canadian financings, shows that while seed and Series A rounds still attracted interest, late-stage investors focused on proven, revenue-generating businesses. Co-author and Osler partner Michael Grantmyre said, “The calculus that a lot of investors use to think about their decisions started to change.”
Fellow Osler partner and co-author Ryan Unruch added that the firm’s report aims to shed light on real-time trends, including new data points like pre- and post-money valuations, dilution, and option pool sizes.
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Standard terms prevail amid uncertainty
Despite evolving market conditions, standard venture terms remained intact, such as 1x non-participating liquidation preferences and broad-based anti-dilution rights. The report also noted a rise in late-stage secondaries, a renewed concentration on AI investments at premium valuations, and regional growth in the Prairies and Atlantic Canada.
Consumer and retail companies, however, faced headwinds. Not a single company in that sector advanced beyond Series B, and it saw the highest rate of down rounds, foreshadowing future challenges as companies revisit earlier bridge rounds and less favourable note terms.
Outlook for 2025
Looking ahead, Osler predicts that IPO activity may stay muted, but M&A and secondaries will play a more prominent role in startup exits. Mega rounds are expected to continue for strong performers, while other startups may face more constrained options—including recapitalizations and consolidations.
“Other market participants will continue to navigate a more challenging fundraising environment in 2025,” Grantmyre concluded.
Read the full Osler Deal Points Report for 2024 here.
