The state of corporate venture capital in Canada

The rise of corporate venture capital (CVC), which involves minority investments by public or private companies in early- or growth-stage startups, is a notable trend. Unlike traditional venture capital investors, CVC firms are managed by a single corporate parent, allowing them to align with their parent company’s priorities. In Canada, the number of CVC initiatives has been steadily increasing as organizations recognize the strategic and financial benefits these investments offer. This report, a collaboration between Deloitte Ventures and BDC Capital , provides an in-depth analysis of Canadian CVC activity over the past five years, up until the end of 2023.

It’s our belief that increased engagement by Canadian corporations in venture capital can result in a triple win for Canada, benefiting not only the corporations and startups but also the economy as a whole. Corporations can derive financial gains and strategic insight, as well as exposure to new technologies, markets, and customers. Startups, meanwhile, gain access to the valuable resources, market expertise, and brand power of large corporations. Simultaneously, the economy thrives as technology clusters generate job opportunities, enhance productivity, and foster innovative solutions at competitive prices.

Canadian CVCs saw their deal activity grow at a much faster rate than institutional venture capital investments between 2019 and 2022. While the number of VC-backed deals in Canada and the United States grew by around 30% during this period, deal participation from Canadian corporates nearly tripled.

Although Canada’s CVC sector is gaining momentum, there’s still considerable room for more participation, especially in comparison with the activity seen in the United States. Only 6% of public Canadian companies generating over $1 billion in annual revenue actively take part in direct VC investment, compared to about 40% of their US counterparts. And while some sectors are using corporate venturing as a strategic tool, major corporations in areas such as energy, industrials, and manufacturing have been largely absent from the CVC space.

To discover how fostering deeper collaboration between Canada’s corporate sector and innovative startups can help drive the technological advancements that are required for the country’s future prosperity, download the full report.