Venture Capital Q1 2026

The first quarter of 2026 closed with $936M in venture capital invested across 104 deals. While deal count declined quarter over quarter, capital deployment remained elevated above pre-pandemic levels.

Ontario-based startups accounted for nearly 40% of all deals but captured only 15.5% of total capital invested. In contrast, British Columbia and Quebec recorded similar levels of deal activity while attracting significantly more capital, with $357M and $292M invested, respectively. Together, these two provinces represented 41% of total deals and 69% of total capital deployed in Q1 2026. A notable transaction this quarter was the $17M seed round raised by Vancouver-based biotech firm Reverb Therapeutics Inc. The round included participation from CVCA members Amplitude Ventures, InBC Investment Corp, Finchley Healthcare Ventures, and Seido Capital.

Outside of these three provinces, venture activity remained broadly distributed. The Prairies maintained a consistent share of deal activity in line with historical levels, while New Brunswick and Newfoundland and Labrador continued to drive investment activity in Atlantic Canada.

Q1 2026 recorded 104 deals totaling $936.3M, representing a 41% decline in deal count quarter over quarter. While capital deployment was lower than Q4 2025, activity remained broadly in line with typical first quarter patterns, declining only 11.5% year over year. Average deal size increased 6% to $9.00M when compared with Q1 2025, while deal activity reached its lowest level for a first quarter since 2021.

The Information and Communications Technology (ICT) sector remained the most active in Q1 2026, accounting for 53 deals, or 51% of total transactions, but captured only $365M, or 39% of invested capital, well below its five-year average quarterly share of 59%.

This shift was driven by increased activity in the cleantech sector, which secured $208M, or 22% of total capital, across 12 deals, surpassing life sciences, which recorded $158M, or 17%, across 20 deals.

Two notable transactions in the quarter included Mangrove Lithium’s$118M financing to support the development of a commercial lithium refinement facility in Delta, BC, and Jetson’s$69M Series A round, backed by Garage Capital, Active Impact Investments, and other investors.

The distribution of deals by deal size remained consistent with historical trends, with 90% of disclosed transactions falling below $20M. The $5M to $20M range accounted for 30% of all deals, reflecting a continued shift toward fewer, larger transactions as investors deploy capital more selectively.

Mega-deals ($50M+) totaled $448M, or 47% of total capital, across six transactions, with an average deal size of $74.6M. This concentration is notable given the limited growth-stage activity observed in the quarter.

Foreign investor participation increased in Q1 2026 following a notable decline in 2025, driven primarily by renewed involvement from U.S. and European investors. U.S. investors participated in nearly one-third of venture capital deals, while European participation rose to 8%, up from 5% at the end of 2025. In contrast, participation from Asian investors declined to 3% of deals, below the two-year average of 6%.

Exit activity remains muted, with 9 undisclosed M&A exits generating $572M in exit proceeds. While no traditional IPOs occurred, Toronto-based Xanadu Quantum Technologies went public via reverse takeover in March 2026 to fuel its next stage of growth.

Continuing this trend, Vancouver-based General Fusion, an energy technology company, and Juno Industries, a defense technology company, are both expected to pursue similar routes to public listing later this year.