That compression matters to portfolio managers and limited partners who seek exposure to companies closer to monetisation or exit, as the pipeline of late-stage opportunities has thinned considerably.
Geographically, Ontario continued to dominate, attracting $1.609 billion, or 57 per cent of all funding, with Toronto alone accounting for $1.41 billion. British Columbia followed at $508 million and Quebec at $491 million.
On the sector side, ICT companies led with $1.566 billion (55 per cent of total investment) while cleantech captured $365 million and life sciences $273 million. One notable shift was the rise of aerospace and defence, which attracted $159 million, or six per cent of total funding, up from less than one per cent in 2025.
Exit environment remains stalled
No venture-backed initial public offerings have taken place in Canada since 2021, and no secondary transactions were reported in H1 2026. The sole notable liquidity event was GSK plc’s acquisition of 35Pharma for US$950 million, which CPE’s report characterised as “a positive liquidity event in an otherwise muted exit environment.”
The absence of IPO activity over five years represents a meaningful drag on returns for institutional investors with private market allocations.