Canada Is Pouring Money Into Tech Sector

Author Brett Vilk Read bio
Tags: technology
Date: December 14, 2022

Canada’s venture capital market continues to see strength, despite inflations reaching a record high post pandemic.

In the wake of the COVID-19 Pandemic, inflation is at its highest rate since 1982. The post pandemic rise has resulted in a lower rate of investments in Silicon Valley compared to previous years. The tech sector is booming in Canada. The industry is attracting top talent and investors, and Canadian cities are quickly becoming world-renowned for their vibrant tech scenes. But what may come as a surprise is just how much money Canada is pouring into the sector.

A new record high of $3.5 billion was invested in 213 deals, KPMG in Canada data showed.

The Canadian tech industry is looking to grow, but many established companies from different sectors are doubling down on scaling out their capabilities. 

Fintech and Artificial Intelligence

Canadian venture capital companies that provide funding for startups have raised $824.4 million in the first quarter of this year alone – with the majority of the money going into one startup, a software firm that acquired $650 million from a Series C round.

105 deals were made in technology, with artificial intelligence/machine learning taking the lead with 30 deals, valued at more than $1.2 billion. Fintech took second place, with 28 deals.

Dan Wilson, National Leader – Technology Sector, KPMG in Canada, says that the pandemic has accelerated digital innovation and the use of tech across many industries. Verticals such as AI, fintech, edtech and healthtech have all experienced continuous investments.

Is Canada Surpassing the US With Tech Talent?

Canada is outpacing the United States with its growth in tech workforce over 12 months, according to LinkedIn’s Workforce Report for Canada

The report revealed that Canada had a 1.6% increase compared to America’s lower number of 1.1%. This could be attributed to many technology-related trends happening right now which have caused an effect on both countries’ labor forces accordingly.

Canadian venture capital investment has increased by a whopping 215% last year. According to the Canadian Venture Capital and Private Equity Association, $9 billion Canadian dollars went to the Communications and Technology sector. This means one thing: Canadian technology companies are continuing to grow at a rapid pace.

Growth has also been reported outside the IT sector, with banking and telecommunications sectors taking the lead with the number of employees hired.

The trend towards remote work has allowed people to find employment opportunities anywhere, including in Canada. Big tech companies, such as Google, Uber, Amazon, Reddit, and Wayfair have added Toronto-based jobs.

Tech talent has been on the rise for some time now, but it seems that Calgary, Vancouver or Toronto may be best suited cities, as they make up this list with their growing populations looking forward towards advancements within technology fields.

Tech Sector: The Fuel Behind Growth In Canada

A study by BDC has reported that one in three small and medium sized companies planned to invest in some type of software in 2022.

Here are several key findings from the same study:

  1. Growth in the tech sector for 2021 – 2024.period is expected to be bigger than 22%;
  2. The technology services sector is booming, with many companies growing at a rapid pace and no sign of slowing down;
  3.  Technology companies that have acquisition in the past ten years are more likely to experience sales growth of 5% or more, compared to their peers;
  4. More than half tech entrepreneurs have some sort of difficulties when hiring employees they need.

It’s clear that Canada is serious about its commitment to the tech industry. With strong venture capital numbers and an abundance of talent, the country is poised for continued growth in the sector.

Expanding Your Offices to the United States?

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