Canadian tech funding holds steady at USD $2.5 billion

Tracxn has released its Canada Tech H1 2026 funding report. Canadian technology companies raised USD $2.5 billion in the first half.

That matched H1 2025 but was down 31% from USD $3.6 billion in H2 2025, suggesting funding held steady year on year even as activity slowed from the previous six months.

The data points to a market that remained resilient overall while shifting across funding stages. Late-stage deals accounted for much of the capital raised, reaching USD $1.6 billion. That was up 76% from USD $907 million in H1 2025, despite a 47% drop from H2 2025.

Seed-stage funding rose 29% from the previous half to USD $194 million, though it was down 28% from USD $268 million a year earlier. Early-stage funding climbed 54% from H2 2025 to USD $784 million, but remained well below the USD $1.4 billion recorded in H1 2025, a year-on-year decline of 44%.

Investor activity also varied by stage. Y Combinator, N49P and Garage Capital were the most active seed investors during the period, while Evok Innovations, Cycle Capital and Bessemer Venture Partners led at the early stage. Portage, NVentures and Planet First Partners were the most active at the late stage.

Big rounds

Five Canadian technology companies secured funding rounds of USD $100 million or more in the half. That was down from seven in H2 2025 but matched H1 2025.

Waabi led with a USD $750 million Series C round. Photonic raised USD $131 million in a Series D round, Stay22 raised USD $122 million in a Series A round, Vention raised USD $110 million in a Series D round, and Defend the Dominion raised USD $100 million in a Series A round.

The sector breakdown showed a sharp shift in where investors deployed capital. Enterprise Applications was the largest sector by funding, at USD $1.5 billion, down 13% from USD $1.7 billion in H2 2025 but up 32% from USD $1.1 billion in H1 2025.

Auto Tech posted the strongest increase in the dataset. Funding reached USD $761 million, up from USD $11.4 million in H2 2025 and USD $108 million in H1 2025, representing increases of 6,595% and 606%, respectively.

FinTech remained one of the country's biggest sectors by funding value, though investment declined. The sector brought in USD $421 million, down 31% from USD $610 million in H2 2025 and 3% from USD $433 million in H1 2025.

Exit market

Exit activity improved from the previous half, though it remained below year-earlier levels. The report counted 65 acquisitions in H1 2026, compared with 62 in H2 2025 and 74 in H1 2025.

The largest acquisition was CoolIT Systems' sale to Ecolab for USD $4.8 billion. The second largest was ISC's sale to Plenary for USD $872 million.

Public market activity also picked up. Five initial public offerings were recorded in the first half, compared with two in H2 2025, though that was still below the six IPOs in H1 2025.

Xanadu, SalesCloser AI and Yocale AI were among the companies that went public during the period. The market also produced one new unicorn, up from none in the previous half and unchanged from the same period a year earlier.

Funding hubs

Toronto maintained a clear lead over the rest of the country, accounting for 43% of all funding raised by Canadian technology companies over the past year.

Montreal followed with 23%. Together, the two cities captured most of the capital raised across Canada's technology sector, underscoring how concentrated deal activity remains in the country's largest urban centres.

According to Tracxn, the first-half figures reflected resilience in overall funding levels despite a weaker comparison with the previous six months and a marked rotation across sectors and funding stages.