Canadian startups had a tough Q3, and AI’s popularity isn’t making a big difference

When we first read PitchBook’s data on global venture investment in Q3, the first conclusion that my colleague Alex Wilhelm and I reached was that startups around the world wouldn’t be mistaken to expect another quarter of declines.

As usual, the numbers are nuanced: European startups were faring slightly better than the rest of the world, seeing more venture capital deployed in the third quarter than in the first two quarters of the year. And, of course, the venture investor adage holds true: Good companies can always raise money.


The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.


And it appears Canadian startups aren’t going to escape the misfortunes of the rest of the world. Today, The Exchange is studying data from Tracxn that paints a fairly gloomy picture of the fundraising climate in the country. We also found a few AI-related nuggets and have notes from a Canadian VC: Eva Lau, co-founder of Two Small Fish Ventures (TSFV).

Money’s not the only thing in short supply

Funding to Canadian startups declined by 57% to $808 million in Q3 2023 from the previous quarter, per Tracxn’s Geo Quarterly report. It’s also 84% less than Canada’s record fundraising quarter, Q2 2021, when startups collectively raised $5.12 billion.

No new Canadian unicorns were minted last quarter, either. The only company that raised at least $100 million, Toronto-based AI chip startup Tenstorrent, hit the $1 billion mark back in 2021.

That’s not all: Canada saw fewer deals in the quarter, too, with only 71 startups raising money in Q3 2023 compared 102 in Q2 2023, and 146 back in Q3 2022.