Québec’s seed-stage funding landscape is bouncing back following a challenging 2024, with its growth surpassing national averages, though the province still faces a decline in venture capital (VC) activity.
A joint report from the Canadian Venture Capital & Private Equity Association (CVCA) and Réseau Capital highlights 29 seed-stage deals totaling $79 million in Québec since the start of 2025, marking a 31% increase from last year. These deals represent nearly half of all VC activity in the province.
Despite this improvement, Canada-wide pre-seed and seed-stage deals continued to decrease in Q2, with $256 million across 86 deals, both figures roughly 30% below the five-year averages.
Experts have previously warned that low early-stage activity in Québec could threaten the future pipeline of startups advancing to Series A and beyond, indicating a possibly “weakening pipeline.” Since Q1 2023, Réseau Capital has observed a declining pre-seed and seed-stage environment for Québec entrepreneurs.
Réseau Capital CEO Olivier Quenneville finds the rise in seed-stage activity “encouraging,” but considers it “premature” to view this as the beginning of a lasting trend. He anticipates further growth at this stage as 17 seed-stage funds in Québec, with $742 million in committed capital, have closed since 2022.
However, the broader impact on Québec’s VC scene was less positive. Sixty VC deals totaling $524 million were completed in the first half of the year, but this reflected a 57% drop year over year. The second quarter ranks 40th out of the past 50 quarters since 2013 for total VC funding in Québec.
“Overall deal flow in venture capital remains relatively weak compared to historical levels,” Quenneville told BetaKit. “Persistent political and economic uncertainties continue to weigh on investment activity.”
This year, Québec has faced similar economic challenges as the rest of Canada, including investor hesitancy due to a prolonged trade war. A sluggish exit market has also constrained the flow of cash to limited partners, complicating fundraising efforts for VCs closing funds.
Québec’s tech sector remains heavily dependent on public and para-public funds, which make up about 40% of venture funding. This trend continued this year, with four of the top five active investors being government-backed institutional funds.
Later-stage activity, typically beyond Series B, amounted to $150 million across nine deals, a 35% funding drop from last year. The first half of 2025 saw just one growth-stage deal of $30 million for textile startup SRTX, involving BDC Capital, Investissement Québec, Export Development Canada, and H&M Ventures, the first growth-stage VC deal in the province since 2022.
Funding across sectors including software, life sciences, cleantech, and agribusiness (AgTech) declined year over year in Québec, with no agribusiness deals in the first half of 2025.
Notable deals in the report include $79 million for electric vehicle charging company Dcbel, $43 million for medical device maker Puzzle Medical, and $38 million for sustainability platform Novisto.
The CVCA issues quarterly reports on venture capital and private equity deals in Canada involving its 300+ member firms, using public and private sources to capture activities beyond its membership. However, VCs caution these reports may not fully represent all ecosystem activity.
Feature image courtesy of Adrien Olichon via Unsplash.