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The first steps Venture investing is largely insulated from macroeconomic conditions. As the public market exodus begins to bring back broad funding, seed investing looks safe for a while. Evidence suggests that it is happening as expected. But some markets are doing better than others when we look at the middle of the year.
Canada, for one, is having a good year. The second quarter saw the highest capitalization for Canadian seed-stage companies. New data from the Canadian Venture Capital and Private Equity Association shows that CAD$263 million (USD$202 million) was invested in 104 seed deals in Q2, the second highest number of deals on record.
Canada’s seed investment volume in Q2 increased by 30% over Q1 and was up 8% from the second best quarter, Q2 2021, when CAD$243 million was invested. Meanwhile, US seed funding fell 35% from Q1 to Q2 this year, according to data from Pitchbook.
Yes, the Canadian market is not very big; For comparison, total US seed volume in Q2 2022 was $3.9 billion. But the Canadian seed market is going up and to the right, which can’t be said about America
It is interesting to speculate why the Canadian seed market is booming while the United States is retreating.
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