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Canada is creating more startups, but fewer are raising pre-seed capital: report
Canada is forming more tech startups in 2026, but fewer are raising pre-seed capital, Panache Ventures report finds.
Key points
- 1,703 new tech startups formed in Canada in 2025, more than 10 percent fewer than in 2024.
- Net new tech firms rose 20 percent in the first half of 2026 compared with the same period of 2025, to 892.
- Pre-seed share fell from approximately 13 percent of new companies in 2023 to eight percent in 2024, and held in 2025.
Why it matters. Matta said lower pre-seed funding today means fewer growth-stage companies in the future, because it shapes the pipeline of companies that later graduate.
Montréal-based Panache Ventures reported that 1,703 new tech startups formed in Canada in 2025, more than 10 percent fewer than in 2024. Company creation picked up in the first half of 2026, with 892 net new firms, 20 percent more than in the same period of 2025. The share of new companies raising pre-seed capital fell from approximately 13 percent in 2023 to eight percent in 2024, and held in 2025.
Latest updates
Canada is creating more startups, but fewer are raising pre-seed capital: report
The country is on track for more company creation in 2026 than 2025. AI could be a factor. The post Canada is creating more startups, but fewer are raising pre-seed capital: report first appeared on BetaKit . The country is on track for more company creation in 2026 than 2025. AI could be a factor. While Canada is on pace to produce more new technology startups in 2026 than in previous years, fewer of them have been raising capital at the earliest stages, according to a new report from Montréal-based venture capital (VC) firm Panache Ventures . “Based on our data, there are more companies being created, but not as many getting funded, and that has always been the challenge for us as an ecosystem,” Panache managing partner and report co-author Prashant Matta told BetaKit in an interview. “What’s interesting to us is that Canada isn’t only producing more companies—it’s producing better-prepared ones.” Prashant Matta, Panache Ventures The report states that “lower pre-seed funding today means fewer growth-stage companies in the future.” As Matta points out, “This is pipeline development … If there are fewer companies graduating high school, there are going to be fewer companies graduating university.” The VC firm’s latest annual Canadian tech startup formation report, which was penned by Matta and analyst Inshaal Qadir, gets its findings from a combination of proprietary and publi.