CIBC Tech & Innovation Market Update – January 2025

Canadian technology sector performance and valuation

Source: FactSet and Pitchbook as at December 31, 2024; in C$ unless otherwise noted. 
1 Please refer to the end of the document for technology group constituents.

Canadian venture capital market monthly recap

December 2024

Aggregate deal value

$268M
(vs. $396M in Nov-24)²
YTD: $4.96B
(vs. $4.15B YTD-23)³

Number of deals

42
(vs. 46 in Nov-24)
YTD: 485
(vs. 924 YTD-23)

Avg. deal value

$18M
(vs. $18M in Nov-24)²
YTD: $20M
(vs. $8M YTD-23)³

Most active province by value ($ / #)

Quebec
($187M / 5)
YTD: Ontario
($2.42B / 249)

Most active province by count ($ / #)

Ontario
($10M / 19)
YTD: Ontario
($2.42B / 249)

Most active sector

Software
(93% of funds raised)
YTD: Software
(75%)

2 27 deals in Dec-24 and 26 deals in Nov-24 with no announced values are omitted from deal values.
3 240 deals in YTD-24 and 426 deals in YTD-23 with no announced values are omitted from deal values. 

Noteworthy Canadian deals

Company Size Financing round Sub-sector Lead investors
Valsoft US$150M Funding Round Vertical Market Software Portage Capital Solutions
Flare US$30M Series B FinTech Base10 Partners
Spexi US$11.5M Series A Computer Hardware Blockchange Ventures

T&I @ CIBC

Deal activity

Landbase

Undisclosed
Growth Capital
CIBC Innovation Banking acted as Sole Provider

Landbase - Growth Capital

CIBC Innovation Banking provided growth capital for San Francisco and Toronto-based company Landbase, an AI-powered go-to-market automation platform. The funding will support Landbase’s growth plans and product development.

In the news

The role of the Chief Financial Officer (CFO) has evolved significantly over the past decade, transitioning from traditional financial oversight to strategic leadership. This transformation is largely driven by technological advancements that enable automation and real-time data analysis. They are now seeing a shift in responsibilities, moving from data collation to strategic planning with time spent on strategy increasing from 30% to 80% in some cases.

Read the full report on CIBC Thought Leadership

Venture debt and ARR-based financing are increasingly becoming essential tools for VC-backed companies looking to acquire other businesses without diluting ownership. CIBC Innovation Banking emphasizes the importance of quick and reliable financing, allowing companies to secure acquisitions while maintaining strong relationships with investors and debt providers. With over $15 billion in managed funds and extensive experience in growth-stage tech, CIBC is well-positioned to support businesses in their acquisition strategies.

Read the full report on CVCA

Technology & Innovation in‘sites’ with CIBC Equity Research

T&I 'Bits and Bytes'

Seasons of giving – The fall economic statement and implications for tech

In mid-December, Chrystia Freeland confirmed that Ottawa will develop a $15B program to help pension funds invest in AI data centres. Although Freeland later resigned, the incentive program was included in the 2024 fall economic statement, alongside several other incentives and changes to tax credits designed to stimulate productivity and investment in Canada. While the government incentives should be a positive for the Canadian tech sector, we are hesitant to read too much into Ottawa’s plans given an upcoming election sometime in 2025. The Conservative party currently holds a 21-point lead over the Liberals, and many expect a Conservative government will undertake a major review of government spending programs, especially after Canada’s deficit came in $20B+ above target.

VC funding update – Tight exit market eyes IPO relief

In 2024, venture capital funding continued to face challenges, with deal count and deal value down amid a weaker exit market. By sector, Artificial Intelligence continued to dominate, making up 25% of year-to-date funding, helped by large investments in Waymo and Clio in Q3. Canada has shown mixed signals, with deal value rising but total volume down. Q4 is not shaping up any better, with total PE/VC deal value down 29% in October and 43% in November compared to the same period last year, according to data from S&P Global. AI investments have remained elevated, with OpenAI raising US$6.6B in October and Elon Musk’s competitor xAI securing US$6B in December. Looking towards 2025, venture capital exit liquidity could see support from a pickup in IPOs driven by recent gains in tech stocks, lower interest rates, and a rising backlog of unicorns looking for exit liquidity.

All’s fair in news and the internet – Canadian media firms sue OpenAI

Lawsuits against OpenAI are not novel; the non-profit is currently entangled in several legal battles. Most surround copyright infringement, and the most notable is likely the ongoing New York Times copyright lawsuit. However, a new copyright infringement case has surfaced in Canada, filed by five Canadian news companies accusing the AI company of unlawfully scraping their data without permission or compensation. Given the publicity of the NYT case coupled with OpenAI’s plans to transition to a for-profit entity, plus the multiple content licensing deals struck this year, we see a settlement and licensing deal as the most likely outcome of the Canadian case. We also expect the future outcome of the NYT case will lay the foundation for how data scraping for AI models is ultimately treated in Canada.

Recent technology news

MIT Technology Review presents their annual top ten list for technology breakthroughs in 2024. From cleaner jet fuels to cattle burping remedies, major scientific progress is happening every year! What breakthroughs will we see in 2025?

Read the full article at MIT Technology Review

Way back in 1995, BBC’s Tomorrow’s World programme predicted what the world would look like 30 years later. With 2025 upon us, the progamme team evaluates what they got right and what they got wrong.

Read the full article at BBC

The Canadian tech market saw big changes in 2024, with record deals from Clio, Shopify and Wealthsimple. See how well you have stayed up to date on an ever-changing market by taking this quiz from BetaKit.

Take the quiz at BetaKit.

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Tech & Innovation Key Contacts

Roman Dubczak
Deputy Chair
Kevin Li
Managing Director and Head, Global Investment Banking

Global Investment Banking

Kathy Butler
Vice Chair and Head of CIBC Capital Markets – B.C.
Colin Ryan
Managing Director, Head of Technology & Innovation, Global Investment Banking
Adam Noily
Managing Director, Head of U.S. Technology & Innovation, Global Investment Banking
Daniel Lee
Managing Director, Technology & Innovation, Global Investment Banking
Emilie Bissonnette
Managing Director, Global Investment Banking
Rob Magwood
Managing Director, Equity Capital Markets
Frazer Wong
Executive Director, Technology & Innovation, Global Investment Banking

Innovation Banking

Paul McKinlay
Executive Managing Director and Co-Head
Patrick Martin
Executive Managing Director and Co-Head
Amy Olah
Managing Director, Head of Canada & US West Coast Venture Banking, Innovation Banking

Canadian Technology Constituents

High-Growth Canadian SaaS
  • Coveo
  • Dayforce
  • Descartes
  • Docebo
  • Kinaxis
  • Lightspeed
  • Shopify
  • Thinkific
Large Cap Canadian Tech
  • Altus
  • Blackberry
  • Celestica
  • CGI
  • Constellation Software
  • Converge Technologies
  • Dye and Durham
  • Enghouse
  • Evertz Technologies
  • Nuvei
  • OpenText
  • Softchoice
  • Well Health
Mid Cap Canadian Tech
  • Calian
  • Computer Modelling Group
  • D2L
  • Kneat
  • Payfare
  • Real Matters
  • TECSYS
  • Tiny
  • Vecima
Small Cap Canadian Tech
  • Alithya
  • Baylin Tech
  • Blackline Safety
  • Optiva
  • Pivotree
  • Quarterhill
  • Sangoma
  • Sylogist
  • Terago
  • VerticalScope
  • Vitalhub
  • Voxtur

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