March 31, 2022Calculating...

Venture Financing Report 2022

2021 was a great year for founders and the Canadian startup ecosystem, which has seen exponential growth in recent years—not just in terms of volume, but also the regional scope of where startups are headquartering and VC investment is flowing.

Read our second annual study examining Canadian VC financings across 192 Canadian-headquartered startups.

Venture Financing Report Cover

Executive summary

Despite being the second year of a global pandemic, 2021 was another record year for venture capital financing in Canada.

2021 saw record amounts of money invested in the Canadian Venture Capital ecosystem giving startup companies choices as to who to seek investment from and creating a company-friendly (as opposed to investor-friendly) environment.

As outlined in our report, this company-friendly investing environment was evident in the deal terms we reviewed. While the movements in deal terms were not dramatic, there was a clear directional trend towards more company-friendly provisions and deals.

These included:

  • more deal activity in provinces that have not historically been financial centres, in particular Nova Scotia and Saskatchewan;
  • fewer instances of Senior Liquidation Preferences which favour new investors; and
  • more up-rounds and fewer down-rounds.

Additionally, in our 2020 Report, we predicted that as the Canadian startup ecosystem continues to mature, we will see an increase in later-stage deal activity (a natural evolution as companies grow). In 2021, we saw early evidence of this, with proportionately fewer Series Seed and Series A investments in 2021 as compared to 2020 and a greater number of Series B and later rounds in 2021 vs. 2020. Historically, most Canadian venture capital deals have been into early-stage companies and as these companies mature, we expect this trend toward later-stage financings to continue.

Our report therefore illustrates that 2021 was a great year for founders and the Canadian startup ecosystem is evolving as expected.


To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2022 by Torys LLP.

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