Canada’s Startup Funding Gaps Cost $66 Billion in Lost Ecosystem Value
Event summary
- NACO and Startup Genome report quantifies $66 billion in lost ecosystem value across Canada’s top three startup hubs (2019–2024).
- $322 million annual funding gap identified at seed, pre-seed, and Series A stages.
- Toronto-Waterloo’s Seed-to-Series A ratio dropped from 95% to 64% post-2017 policy shift.
- Canadian startup ecosystems grew at 2.2% annually vs. 9–17% for global peers.
The big picture
Canada’s startup ecosystems are underperforming globally due to chronic early-stage funding gaps. The NACO report provides empirical evidence that policy shifts like the VCAP-to-VCCI transition in 2017 exacerbated these imbalances, creating a ripple effect across later funding stages. With $322 million in annual funding deficits, the report underscores the need for targeted interventions to unlock high-quality startup jobs and future market capitalization.
What we're watching
- Policy Impact
- How Budget 2025’s $750 million commitment will address structural funding imbalances.
- Ecosystem Growth
- Whether Canada can narrow its 13% annual growth gap vs. global peers.
- Capital Formation
- The pace at which seed-stage funding recovers post-VCCI transition.