Artificial Intelligence Sees Funding Boom in Canada, But Venture Capital Remains Sluggish

Artificial intelligence has attracted more than $160 million in investments across 12 deals this year alone, a new report shows—the highest amount of funding in Canada in the past five years.

“The increase of corporate investments in AI is shaping Canada as a leader in this sector,” said Chris Dulny, National Technology Industry Leader, PwC Canada.

However, despite the fuel from AI, activity slumped overall. According to the MoneyTree Report from PwC Canada and CB Insights, investments in venture-backed companies based in Canada slowed down in the first half of 2017: overall funding decreased 14% to $885 million, while the number of deals dropped 25% to 170 when compared to the first half of last year.

Average deal sizes did go up, though.

“Canadian companies are attracting larger investments from top VCs who are increasingly focused on our homegrown tech talent and innovation,” noted Dulny.

AI and deal sizes were not the only silver lining, either. Seed funding rose, as did expansion-stage deals, and some sectors—such as digital health—are seeing their biggest numbers ever.

“There are some positive signals including the resilience in seed-stage deal activity and the continued presence of corporate and corporate VC investors,” observed Anand Sanwal, CEO of CB Insights. “In addition, as artificial intelligence startups have risen to the forefront globally, Canadian companies working in AI are also gaining momentum and interest.”