Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Canadian VC Fundraising Contracts And Concentrates In 2025
Fundraising | Jan 22, 2026
Image: RBCx Capital Under Pressure Canadian VC Fundraising Report 2025
RBCx VC Report Shows Lower Capital, Higher Concentration, and Less Money for New Deals
In January 2026, RBCx released the Capital Under Pressure report on Canadian VC fundraising in 2025 (42 page PDF), with data analysis that examines how capital flows from investors into Canadian venture funds, and how those fundraising dynamics affect fund sizes, investor concentration, and the amount of capital available for new investments in founders.
Fundraising Volumes Fall Below Long Term Levels
The report shows Canadian VC firms raised just over $2.1B in 2025. This level sits well below the long term average of roughly $3.1B and places 2025 among the weakest fundraising years since 2016. A brief rebound in 2024 did not continue, indicating sustained pressure rather than a short term disruption.
New Fund Formation Continues Despite Lower Capital Raised
Even with lower fundraising totals, 21 new venture funds completed their fundraising process in 2025. In plain terms, these funds finished raising investor commitments and became active for investing. The data shows that while total capital declined sharply, the number of new funds coming to market remained relatively steady with the adjustment occurring through smaller fund sizes rather than fewer funds being formed.
Capital Concentration Reaches A Record High
Capital concentration increased materially in 2025. The five largest Canadian venture funds captured 83% of all capital raised during the year, the highest level recorded in the dataset. This reflects investor behaviour in lower liquidity environments, where commitments concentrate around established managers rather than being spread across a broader range of funds.
Emerging Manager Fundraising Hits A Record Low
Emerging managers raised $249M in 2025, the lowest annual total recorded in the report. In contrast, established managers accounted for the majority of new capital raised. The data shows fewer new and early stage funds accessing capital, narrowing the range of investors available to back companies at the earliest stages.
See: DealMaker Raises $20M to Expand AI Capital Platform
Government Backed Capital Remains Material
Reliance on federal capital programs has declined but remains significant. Capital linked to VCAP and VCCI accounted for 36% of total Canadian VC fundraising in 2025, down from 53% in 2015. While the share has fallen, government backed capital continues to anchor a meaningful portion of venture fundraising activity.
Dry Powder Shifts Away From New Investments
The composition of available capital shifted materially in 2025. Only 42% of remaining dry powder is available for new investments, with the majority reserved for follow on funding in existing portfolio companies. This is the lowest share of initial investment capital recorded and directly limits the amount of domestic venture capital available for new company formation.
Fund Sizes Reset To Historic Lows
Fund size compression accelerated in 2025. The median Canadian VC fund size declined to $29M, while the top quartile fell to $43M. Both figures represent the lowest levels observed since 2013, confirming that less capital is available per fund even as fund formation continues.
Implications For Fintechs Raising Capital
With less venture capital raised overall, higher concentration among a small number of large funds, and only 42% of remaining dry powder available for new investments, fintech founders should expect slower fundraising processes, narrower investor funnels, and higher expectations around proof of traction. In practical terms, this environment favours companies that can demonstrate clear revenue quality, customer retention, regulatory readiness, and capital efficiency earlier than in prior cycles.
In a climate where traditional VC funding is contracting, fintechs benefit from widening their capital strategy beyond venture capital alone. Non-dilutive programs that support technical development and commercialization, such as Eurostars international R&D collaboration programs, can extend runway without ownership dilution when equity capital is scarce. At the same time, alternative finance models, including equity crowdfunding, can provide more aligned and patient capital from users, customers, and sector participants when institutional funds slow initial investments.
See: AI, Capital, Money Rewire Financial Infrastructure In 2026
These approaches do not replace venture capital, but they can strengthen balance sheets, validate market demand, and reduce dependency on a single capital source at a time when venture capital is increasingly selective.
Closing
For fintech founders, the takeaway is not to pause growth plans but to adapt capital strategies to the realities of the market. Stronger evidence, clearer execution, and diversified funding paths matter more than ever. Companies that treat capital raising as a multi channel strategy rather than a single event will be better positioned to navigate this cycle and remain competitive as conditions evolve.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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