Blakes upRound™: February 2025

February 20, 2025

In this Edition

The venture debt market continues to expand and play a prominent role in the Canadian venture capital market.
Canadian retail trends from 2024, recent developments in tariffs for 2025, updates on cybersecurity and AI, and other need-to-know topics.
The venture market seemed to recover in 2024, but at what cost?

Market Insights

Key Features to Watch for in Venture Debt — Venture debt plays a prominent role in the Canadian venture capital market, and the size of the venture debt market continues to expand with the total value reaching C$528 million in the first nine months of 2024, a 21% increase from 2023. Despite a slowdown in 2023 compared to 2022, partly due to the collapse of Silicon Valley Bank and Signature Bank, venture debt remains a crucial financing option for Canadian startups facing fundraising challenges.

Legal Update

Founders and investors may find the following insights from our Blakes colleagues helpful and instructive:

Venture Capital — Blakes Ventures understands that efficiency and managing costs are important for our venture capital and emerging company clients. To these ends, we worked with our Innovation team to automate the creation of custom term sheets, side letters and diligence requests for a client’s ongoing investments. Learn more about this process in our case study, How Blakes Helped a VC Fund Streamline Legal Work With Automation.
IP and Trademarks — On December 16, 2024, the Trademarks Opposition Board (TMOB) announced that it was initiating a pilot project under section 45 of the Trademarks Act. Starting in January 2025, the Registrar will randomly select batches of registered trademarks that meet certain criteria and require that their owners submit evidence of use of the mark. Learn more in our Blakes Bulletin: Prove It or Lose It: Trademark Registrar Initiates Proof-of-Use Proceedings.
Recent Developments in Tariffs — 2025 is expected to see unprecedented new tariffs imposed between Canada and its largest trading partners. Our Blakes Bulletin: Welcome to 2025: Are You Ready for Tariffs? and a more recent Blakes Bulletin on U.S.-Canada tariffs highlight developments and key lessons for navigating this evolving landscape.
Cybersecurity and AI — On January 6, 2025, the federal parliamentary session ended when the Governor General of Canada accepted Prime Minister Justin Trudeau’s request to prorogue Parliament until March 24, 2025. As a result, a number of bills impacting cybersecurity, privacy, artificial intelligence (AI) and financial services are now considered dead, with no suggestion that they will be quickly reintroduced once Parliament returns. Learn more about these changes in our Blakes Bulletin: Digital Policy Issues Face Uncertain Future After Prorogation of Parliament.
CSA Proposed Access Model — On November 19, 2024, the Canadian Securities Administrators (CSA) announced it is seeking feedback on proposed changes to implement an access model for annual financial statements, interim reports and related management’s discussion and analyses (collectively, CD documents) of non-investment fund reporting issuers (the Proposed Access Model). Read more in our Blakes Bulletin: CSA Proposes Access Model for Continuous Disclosure Documents of Non-Investment Fund Reporting Issuers.
Canadian Retail — Looking at developments and trends from 2024, many sectors of the retail industry remain in flux and continue to be buffeted by various challenges and headwinds, including the threat of a very different tariff landscape, increased regulations across the board, persistent supply chain hurdles and decreased consumer confidence. Learn more about these developments in our Blakes Bulletin: Canadian Retail 2024: Developments, Trends and Industry Outlook.

Deal Monitor

Data sourced from PitchBook.

For the year 2024, early-stage deal value comprised 30% of total deals, while later-stage deal value comprised 32% of total deals. Growth Equity deals saw the largest share of deal value for 2024, comprising 38% of total deals.
IT investments continued to be the most active industry in 2024, comprising nearly half of the top 20 deals and 35% of total deals. Healthcare investments, which had been slow in the first half of 2024, picked up in the second half nearly doubling their value to end the year. Most other industries saw an increase in deal value from Q2 to Q4, including Consumer Products & Services, Energy, Financial Services, and Materials and Resources. Commercial Products & Services, however, saw a slight decrease in deal value, dropping from US$612-million in June of 2024 to US$610-million to end the year.
Among the largest transactions was British Columbia-based Clio’s US$900-million funding led by OMERS Growth Equity, New Enterprise Associates, Goldman Sachs Asset Management, and T. Rowe Price Group. The funds were used to expand the multi-product platform, including further investments in its rapidly growing AI portfolio and integrated legal payments.
Other notable transactions in 2024 include Tenstorrent’s US$700-million Series D1 funding led by Samsung Catalyst Fund, Protagonist, Samsung Venture Investment, AFW Partners and Samsung Securities; Cohere’s US$500-million Series D funding led by Public Sector Pension Investment Board; and Waabi’s US$200-million Series B funding led by Uber and Khosla Ventures.

YOY Sector Investment Activity, 2018-2024 EOY

As forecasted in previous editions, the volume of venture deals bounced back in 2024, seeing the highest deal count since 2021. It should be noted, however, that the total dollar value of deals year over year continues to decrease, and was the lowest it has been since 2020.