Authors: Michael Grantmyre and Ryan Unruch

Introduction

Welcome to Osler, Hoskin & Harcourt LLP’s fourth annual comprehensive report on venture capital and growth equity financing transactions in Canada’s emerging and high growth companies ecosystem.

Across the board, Canada experienced reduced business and consumer activity in 2024, with a continuation of the high cost of borrowing that dominated 2023. In 2024, as the Canadian economy combatted ongoing inflationary pressures, Canadian venture investors and capital allocators continued to contend with a challenging economic environment. Unlike 2022 and 2023 when increasing interest rates caused uncertainty in the Canadian economy, interest rates remained at 5.00% for the first half of 2024 and then started to ease in the second half of the year. As a result, and despite the high cost of borrowing and downstream implications for businesses and consumer spending, the economic outlook in 2024 was much less uncertain than in 2023.

Amidst these economic conditions, in 2024, late-stage investors returned to market in search of proven and revenue-generating businesses, resulting in what many have described as the “year of the mega deal” — financing transactions with round sizes of more than $50,000,000 — with examples like the US$900,000,000 investment in Clio and the US$500,000,000 investment in Cohere, both of which are examples of strong and proven Canadian technology companies. In the financings covered by the Deal Points Report for 2024, mega deals represented 65.1% of the capital invested. Investments like those in Clio and Cohere were reflective of a broader trend in 2024: the welcome return of activity levels for late-stage venture financings, with approximately 75% of all capital invested in financing transactions captured in the Deal Points Report invested at the Series B and beyond stages.

As in 2023, 2024 continued to show signs of renewal and resilience in the Canadian venture space, as early-stage financings (i.e., Seed and Series A stages) again represented the majority (76.3%) of all financings captured by this year’s Deal Points Report. The biggest increase in these early-stage financings was at the Seed stage, where the number of financings increased 18% from 2023 and represented 45% of all financings in 2024. It is clear that investors are continuing to make long-term bets on exciting companies with good prospects, strong existing or potential economics, product-market fit and strong founders.

Turning to the Canadian emerging and high growth companies ecosystem itself, we are excited to see the ongoing growth of venture financing activity in emerging ecosystems in the Prairies (13.8% of deals; 5.2% of invested capital) and Atlantic Canada (1.3% of deals; 0.5% of invested capital), while Ontario (48.8% of deals; 41.5% of invested capital), British Columbia (15% of deals; 30.5% of invested capital) and Québec (11.3% of deals; 13% of invested capital) continued to be significant contributors to venture financing activity in Canada. As in 2023, Alberta was a rising star in the Canadian ecosystem, capturing a large percentage of the total number of financing rounds. Investments in emerging industries like artificial intelligence (18.1%) and cleantech (14.4%) continued to see material increases in 2024, relative to 2023, reflecting the ongoing successes that Canadian companies in these industries have achieved. Finally, the data in the Deal Points Report shows that terms in Canadian venture financing transactions continue to maintain their alignment with the Canadian Venture Capital and Private Equity Association (CVCA)/National Venture Capital Association (NVCA) model financing documentation — a sign that companies are typically raising capital on market terms, rather than off-market terms.

About the 2024 Deal Points Report

This year’s release of the Deal Points Report: Venture Capital Financings synthesizes data from 646 venture capital and growth equity preferred share financings completed by Osler from 2020 to 2024, representing more than US$11.4 billion in total transaction value. It is important to note that these 646 financings represent, as a sample, only a portion of Osler’s significant overall financing deal volume; from 2020 to 2024, Osler advised clients in the emerging and high growth companies space in 1,396 financing transactions, including preferred share equity financings and the issuance of convertible securities (such as Simple Agreements for Future Equity (SAFEs) and convertible promissory notes), with an aggregate deal value of approximately US$18.46 billion.

This significant level of transaction volume, combined with Osler’s position as the preeminent Canadian legal advisor to clients in the emerging and high growth companies space, are key factors in our unique ability to produce a publication like the Deal Points Report. In the LSEG (formerly Refinitiv) Global Private Equity Legal Review: Full Year 2024, for example, Osler was ranked as the #1 Canadian legal advisor to venture-backed companies based on round value and number of rounds, as well as the #1 Canadian legal advisor to the investor based on number of rounds. Osler was also ranked as the #1 Canadian firm for venture capital deals across several categories in the 2024 Annual Global League Tables. In addition, the firm’s expertise is acknowledged in the 2025 Chambers Canada rankings: Osler is the only Canadian firm to rank as Band 1 for Startup & Emerging Companies; the two Co-Chairs of the Emerging and High Growth Companies Group are the only Band 1 ranked lawyers in the country; and the firm has the largest number of ranked lawyers in Canada.

The Deal Points Report is unique within the Canadian market as it does not rely solely on publicly available information or third-party submitted data. Instead, it draws on Osler’s confidential anonymized data sources, with a focus on providing readers with deeper access to comprehensive financing-related information that goes beyond what can be gathered from publicly available data sources. Osler has undertaken publishing the Deal Points Report as we believe information from non-public sources — including comprehensive financing-related data extracted from term sheets, share purchase agreements, shareholders agreements and secondary sale transaction documents — should be available to all stakeholders within the emerging and high growth companies ecosystem. As all data presented in the Deal Points Report is from financings completed by Osler across the country, the authors are able to interpret and contextualize raw data inputs with the benefit of first-hand exposure to these financings, thereby enhancing the production of meaningful insights and reliable conclusions.

One of the unique features of the Deal Points Report is that it provides an opportunity to profile some of Osler’s clients and to share their inspiring stories, including how these clients were able to both raise and deploy capital in 2024. We are truly grateful for the support and trust of these clients, and all of the firm’s clients. At Osler, we are fortunate to represent emerging and growth- stage companies and the investors that invest in these companies — from a broad spectrum of knowledge-based industries and through the phases of their lifecycle — providing legal advice on a wide range of issues and requirements along the way (Watch Osler clients share their success stories). We are proud to play a role in each of these journeys, which in turn are parts of a much bigger story: the growth and exceptional success of a resilient emerging and high growth companies ecosystem across Canada, an ecosystem that continues to create jobs, promote innovation and foster economic growth while attracting significant amounts of domestic and international investment.

Finally, as we continue to evolve and build on the public-facing insights shared in the Deal Points Report, we are excited to note that, for the first time, this year’s release tracks data for financings on (i) average and median pre-money and post-money valuations, by series of financing, (ii) average and median dilution per round of financing, by series of financing, and (iii) average and median size of post-money option pools, expressed as a percentage of post-money capital, by series of financing. Even with these additions to the Deal Points Report, there are many data points that we feel are relevant to the market and important to track, but that did not make it into this year’s publication. We will continue to refresh the content and data points in future releases. In the meantime, please do not hesitate to reach out to any of the lawyers in our Emerging and High Growth Companies Group in our offices across Canada to discuss the findings in this year’s publication.

Discover more about this report as members of Osler’s Emerging and High Growth Companies Group discuss the findings in our on-demand webinar. For the 2024 report, Osler’s panel of experts includes the Co-Chairs of the Emerging and High Growth Companies Group, Chad Bayne and Mark Longo, who were fortunate to be joined by Peter Walker, the head of Carta’s insights team.

Highlights from the Deal Points Report

• For financings captured by the Deal Points Report, the number of down rounds in 2024 dropped marginally to 15%, in comparison to 16% in 2023. The number of flat rounds decreased dramatically in 2024 to 12%, in comparison to 26% the previous year. The number of up rounds increased meaningfully to 73%, in comparison to 58% in 2023.
• Of those companies that completed a down round during the five-year period covered by the Deal Points Report, the highest incidence of down rounds occurred in later stage financings (i.e., Series C, Series D and beyond).
• The highest concentration of financings in Canada occurred at the early stages (i.e., Series Seed and Series A), which is the highest level in the five-year period covered by the Deal Points Report. Consistent with prior years, Series Seed and Series A financings continued to represent a majority of the financings captured (76.3% of all financings; but only 22.7% of all dollars invested in 2024), although there was a noticeable decline in the number of Series A financings in 2024 (down 5.7% from the prior four-year average, and down 9% from 2023).

• Companies in the information technology and artificial intelligence industries collectively represented 41.2% of all financings captured by the Deal Points Report in 2024. While artificial intelligence companies represented 18.1% of the number of financings completed in 2024, these companies represented 26.3% of all capital invested in 2024. Health/life sciences continued to represent an important industry for venture investment in Canada, representing 18.1% of closed financings and 17.3% of dollars invested.
• In 2024, Ontario, British Columbia and Québec had the highest concentration of financings completed and capital invested — collectively representing 75.1% of all deals and 85% of funds invested. Alberta saw an increase in the total number of financings captured, representing 12.5% of the financings closed in 2024 (relative to 8.4% in 2023).
• The percentage of companies covered in the Deal Points Report that were founded by women increased to 21.3% in 2024 (relative to 14.7% in 2023). Women-founded companies represented 12% of total dollars raised in 2024. Of these financings, 61.8% were Series Seed financings, 29.4% were Series A financings, 5.9% were Series B financings and 2.9% were Series C financings. 
• Timelines to close a venture financing increased across the board in 2024. Factors contributing to this increase included lack of competitive tension, difficulty in syndicating rounds, and increased investor diligence and caution. Notwithstanding these longer closing timelines, exclusivity periods remained consistent with historical norms.

• Over 98% of the financings in 2024 covered by the Deal Points Report used forms generally based on the CVCA model financing agreements, demonstrating that financings based on the CVCA model documents continue to be the market standard in Canada.
• Through 2024 there was a resurgence of secondary transactions; 17.4% of all financings included a secondary component, with the most significant increase seen in Series B financings (56% of all Series B financings included a secondary component). Late-stage secondary transactions also returned in 2024 (14% of all Series D and beyond financings included a secondary component). Secondaries are expected to remain popular in 2025, but are unlikely to replace IPOs or larger M&As as early investors continue to demand liquidity for their investments.

• Standard venture terms remained consistent in 2024, including pari passu liquidation preferences,1x liquidation multiples on liquidation, non-participating preferred shares, non-cumulative dividends, broad-based anti-dilution and no redemption rights.

Methodology and background

• The Deal Points Report consists of a review of 646 preferred share financings, from Series Seed financings through to Series D financings and beyond, completed by Osler clients between 2020 and 2024. These preferred share financings include a small representation (approximately 9.4%) of financings involving a U.S. company where one of the firm’s Canadian offices was engaged in the matter. Common share financings and financings resulting in the issuance of convertible securities, such as Simple Agreements for Future Equity (SAFEs) or convertible promissory notes, were excluded.
• The total value of investment across all of the financings covered by the Deal Points Report was $11.4 billion, including $3.74 billion in financing activity in 2024.
• Osler was company counsel in approximately 68% of the financing transactions included in the Deal Points Report and investor counsel in approximately 32% of these financings.
• Osler collected and anonymized data from both public (where documents such as company articles are publicly filed) and non-public financing documents related to these transactions, including term sheets, articles, share purchase agreements, shareholders agreements and secondary sale transaction documents.
• Financings covered in the Deal Points Report span a five-year period.
• The Deal Points Report is divided into four sections: General overview, Valuation and investment intelligence, Financing structure intelligence and Financing terms intelligence.
• All dollar amounts for financing transactions that were not actually denominated in USD were converted into USD based on the applicable foreign exchange rate published by the Bank of Canada on the closing date of the applicable financing. To the extent that the closing date of such a financing transaction occurred on a holiday, the applicable dollar amount was converted into USD based on the applicable foreign exchange rate published by the Bank of Canada on the next business day.
• For the first time, in the 2024 release of the Deal Points Report, Osler is tracking data on companies in the artificial intelligence space as a separate industry (it previously formed part of the information technology industry in Osler’s data).
• Also for the first time, in the 2024 release of the Deal Points Report, Osler is publishing additional data relating to the economics of financing transactions, including (i) average and median pre-money and post-money valuations, by series of financing, (ii) average and median dilution per round of financing, by series of financing, and (iii) average and median size of post-money option pools, expressed as a percentage of the post-money capital, by series of financing.

About Osler’s Emerging High Growth Companies Group

The Emerging and High Growth Companies Group at Osler is composed of individuals who are passionate about entrepreneurship and fostering the development of early- and growth-stage ventures. Osler is the only Canadian law firm ranked Band 1 in Chambers Canada, and our team members in our Toronto, Vancouver, Montréal, Ottawa and Calgary offices are eager to share their experience and insight with emerging companies to help maximize their development and ensure long-term success.

We represent entrepreneurs and emerging and growth-stage companies nationwide from a broad spectrum of knowledge-based industries, supporting them from incubation through their growth trajectory, as well as the venture capital funds, growth equity funds and private equity funds that finance them. We provide legal advice on a wide range of issues and legal requirements that emerging and high growth ventures face, from corporate and tax structuring, to fundraising and shareholder agreements, to intellectual property strategies and employment- and compensation-related matters — all of which require a deep understanding of the market and expert counsel.

Osler acts for more than 2,000 early-, growth- and late-stage ventures and venture investors across Canada, in the United States and around the world. In 2024 alone, Osler advised on over 300 venture financing transactions, including preferred share financings, convertible note financings and SAFE financings, with more than US$4.3 billion raised by emerging and high growth companies, many of which are showcased in the data forming the basis for this Deal Points Report.

Authors

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• General overview of financings in the Deal Points Report