Canadian cleantech VC falls while global investing rises

OTTAWA — Cleantech venture investment by Canadian VCs dropped to $590 million last year from $1.65 billion at the 2022 peak, and was down 43% from 2024, even as global cleantech venture investing rose about 8%, according to Queen’s University’s Institute for Sustainable Finance.

Yrjö Koskinen, the institute’s research director, said the slide partly reflects a 2021–22 bubble that pulled in too much capital and left valuations ahead of results. The bigger structural gap is later-stage and growth financing — sparse and deal-heavy — while early-stage money became the main driver after 2021. Cleantech often needs heavier cheques than the software startups that dominate Canadian VC.

“That kind of money is very hard to get in Canada,” Koskinen said. “It could be much easier to get in the United States or Europe.” Public institutions including BDC Capital, Export Development Canada and Investissement Québec have taken part in 33% of domestic cleantech deals since 2016 and 57% of disclosed deal value — a public-capital crutch as private later-stage money stays thin.

CVCA data show a tentative floor: Canadian cleantech firms raised $336 million across 18 deals in the first half of 2026, up 4% year over year but still far below peak. Without more pension and private growth capital at home, Canadian startups keep looking south to scale — just as tariff uncertainty and U.S. ESG pullback keep reshaping where climate capital wants to sit.