Q1 2025 VC & PE Canadian Market Overview

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CVCA’s public quarterly market overview reports provide a deep analysis of the Canadian market, offering a panoramic view of private capital trends and investments. These comprehensive reports utilize data from the CVCA Intelligence platform, Canada’s foremost private capital database. They highlight performance indicators, emerging sectors, and strategic shifts, empowering stakeholders with crucial insights for informed decision-making.

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While overall investment levels remain consistent with historical Q1 activity, the number of completed deals fell well below quarterly averages, reflecting a recalibration across the ecosystem. 

In Q1, the average deal size continues to climb which reached CAD $10.89 million this quarter, compared to CAD $8.94 million a year ago. This reflects a continued focus on fewer, higher-value deals. Later-stage companies continue to attract the majority of capital, while early-stage deal flow, particularly at the pre-seed and seed levels, remains subdued. 

“There is still capital available for strong companies, but deal volume is slowing,” said Kim Furlong, CEO of CVCA. ​“We are also seeing a continuation of a concerning trend of lower investment at the earlier stages. With exits on pause and a complex macroeconomic environment, investors are exercising more caution. That said, Canada’s maturing ecosystem continues to offer compelling long-term opportunities.” 

The ICT sector led all sectors in Q12025, attracting over half of total VC investment with CAD $807 million across 58 deals. Life sciences followed with CAD $218 million across 23 deals, and cleantech saw CAD $128 million across 12 deals. Activity remained concentrated in Ontario, Quebec, Alberta, and British Columbia. Ontario led in both total dollars and deal count and recorded the highest average deal size, followed by Alberta and Quebec. 

Venture debt continues to emerge as a valuable non-dilutive financing option in Canada. In Q12025, there were 14 VC debt deals totaling CAD $283 million, the highest Q1 dollar value recorded since tracking began. Ontario led with nine deals worth CAD $182 million, followed by Alberta with one deal valued at CAD $85 million. As equity markets tighten, founders are increasingly turning to debt financing to extend runway without giving up ownership. 

Exit activity in Q12025 slowed sharply. Only 10 VC exits were recorded, totaling CAD $231 million. This includes seven M&A transactions worth CAD $149 million and three secondary sales totaling CAD $82 million. There were no IPOs and no disclosed exit values, marking a continued retreat from the record-setting exit levels seen in prior years. This trend reflects prolonged acquisition timelines, risk aversion among buyers, and broader macroeconomic uncertainty. 

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Investment this quarter was heavily influenced by a single mega-deal: the CAD $14 billion recapitalization of Montreal-based GardaWorld.

Excluding GardaWorld, private equity investment in Q12025 remained consistent with Q12024 levels. Québec led all provinces with CAD $16.1B across 81 deals, representing 89% of total dollars invested, driven primarily by mega-deals. Ontario followed with 33 deals totaling nearly $2B, while Alberta recorded $35M across 5 deals.

Industrial and manufacturing led all sectors in deal count with 37 transactions totaling $1.6B, largely concentrated in Québec. ICT followed with 33 deals worth $460M, while consumer and retail attracted $112M across 9 deals. Financial services drew over $1B, supported by disclosed transactions like the $29M investment in Namakor Holdings.

“Even with elevated market uncertainty, private equity continues to act as a value-creation lever for Canadian businesses,” said Kim Furlong, Chief Executive Officer, CVCA. ​“Behind the headline mega-deal, we’re seeing consistent interest in mid-market opportunities, with firms focused on long-term growth and acquisition-led strategies.”

Despite the high dollar total, 80% of all Q1 PE transactions were valued below CAD $25 million, demonstrating continued resilience in the Canadian mid-market. The CAD $25M – $100M range held steady in activity, representing 11% of total deal flow.

Exit activity was modest in Q1, with 13 exits totaling CAD $130 million in disclosed value. The majority were M&A transactions, with no PE-backed IPOs recorded. The exit activity points to delayed closings and increased caution from U.S.-based acquirers amid ongoing uncertainty around tariffs and cross-border trade.