Venture Capital investments in 2022 totaled $8 billion in Canada down from 2021’s $14.2 billion, that representing a 42% decline in investments in the Canadian business eco-system.
Poor economic conditions which include; rising inflation, soaring interest rates and overall the poor economic environment were significant contributing factors to the downturn in venture capital investments in Canada. Of all the sectors which suffered the most, the tech sector got the worst brunt of the VC investing downturn.
Although, venture capital funding was down in 2022, it was still the second-best year ever for venture capital fundraising in Canada. Of recent years, venture capital investments in Canadian enterprises has been on a steady rise.
The general consensus is that risk capital went to the sideline in 2022. Venture capitalisits parked their money on the sidelines, awaiting for sunnier days to come. The general market conditions proved very challenging for many and fears of an on-coming recession paused many investors from making bets in the Canadian business eco-system.
The general consensus though shows that the future remains bright for Canadian companies looking for venture capital funding. The demand from VC’s both in Canada and south of the border continues to increase looking at placing investments in Canada’s business sector.
Source: Ottawa Business Journal
