Plus: The bright spot in Québec’s gloomy VC landscape.
On Thursday at 9:59 am ET, the week’s biggest Canadian tech story was domestic VC activity regressing to the COVID-19 lows of 2020.
Then the clock struck 10:00, and enterprise AI company Cohere announced it had raised another $500 million USD, co-led by Canadian firms Radical Ventures and Inovia Capital.
Cohere’s megaround underscores the chasm noted in Inovia’s State of Software report: AI companies seem insulated from the broader VC funding downturn as the technology balloons revenue and valuations.
Featuring Canadian leads—and perhaps more rare, Canadian pension funds—Cohere’s homegrown round has been touted as a big win for Canada. It’s also an anomaly: RBCx director of capital, John Rikhtegar, told BetaKit that the number of $50 million-plus deals this year is on track to be the lowest since 2015. Canadian VCs have also privately worried about their capacity to compete with US counterparts, who dominate later-stage rounds.
“It’s keeping Canada meaningfully on the cap table for our breakout companies,” Rikhtegar said of the deal.
With Untether.AI and CentML acquired, and Tenstorrent redomiciled in the US, Cohere appears to be Canada’s lone foundational AI hope. Armed with a fraction of the capital compared to its global competitors, Cohere has carved out a niche serving large, security-minded enterprises. Gradient Ventures’ Zach Bratun-Glennon told BetaKit that Cohere’s sovereign, non-US AI offering also helps it stand out.
But one company, or one deal, can’t prop up a sector. According to AI minister Evan Solomon, Canada is in a “crisis moment,” needing to rapidly address AI talent and IP drain to secure the country’s economic sovereignty.
Those domestic investment numbers are another kind of crisis. With Cohere, Canadian VCs have shown they can still back homegrown breakout companies, but the early-stage funding desert remains. If Canadian VCs can’t find their way onto cap tables across all stages, who will fund the next Cohere?
Madison McLauchlan
Reporter, Montréal
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Seed-stage rebound a bright spot in Québec’s gloomy VC landscape: report
According to a joint report compiled by the CVCA and Réseau Capital, seed-stage deals made up nearly half of all VC transactions in Québec since the beginning of 2025, totalling $79 million. This marked a 31-percent increase in seed-stage capital invested in the province compared to this time last year.
Réseau Capital has tracked a faltering pre-seed and seed-stage landscape for entrepreneurs in Québec since Q1 2023. Olivier Quenneville, CEO of Réseau Capital, told BetaKit that the uptick in seed-stage activity is “encouraging,” but added that it’s still “premature” to declare this the start of a longer trend.
C-Suite Shakeups
Cohere has added two former Meta and Uber executives to its C-suite after raising $500 million USD at $6.8-billion valuation. Canadian computer scientist Joelle Pineau is the company’s first chief AI officer, and Francois Chadwick is its first CFO. Phil Blunsom has also been promoted from chief scientist to CTO, replacing Saurabh Baji.
OpenText has replaced longtime CEO Mark Barrenechea as it considers selling off “non-core assets” after the company reported stalled revenue growth in its latest earnings.
Virtual Gurus founding CEO Bobbie Racette stepped down to become the company’s president after closing an undisclosed amount of funding. COO Elliot Schneier has been appointed the new chief executive, taking over for the first Indigenous woman in Canada to raise a Series A round.
Waabi has hired Lior Ron, the co-founder and CEO of Uber Freight, as COO to lead the commercialization of its self-driving trucks.
NordSpace breaks ground on new Atlantic Spaceport Complex in Newfoundland
Markham, Ont.-based NordSpace has broken ground on the site that will facilitate Canada’s first commercial space launch, which is planned for later this month in Newfoundland.
The Atlantic Spaceport Complex, which is also set to become Canada’s first operational commercial spaceport, is located just outside of the small town of St. Lawrence, Nfld. and will feature two orbital and one sub-orbital launch pad.
How Collectr bootstrapped a trading card hobby into an eight-figure business
Shortly after selling their proptech startup Doorr, founders and avid Pokémon trading card collectors Adam Hijleh, Muhammad Rashid, and Abbas Ali launched a “side gig.” Sick of using spreadsheets, they made an app called Collectr to help fellow hobbyists keep inventory of their collection.
Just under four years later, Collectr has more than four million users worldwide, eight figures of annual recurring revenue, and DJ Steve Aoki advising the team, all without spending a cent on advertising.
“If you look at us from the outside, we look like degenerates just spending money on Pokémon and stuff like that. Just having fun,” Rashid told BetaKit in an interview.
Zenbooks co-founder launches OpenSME to rally Canadian small businesses behind open banking
Eric Saumure, co-founder and principal of Ottawa accounting firm Zenbooks, has launched OpenSME: a volunteer campaign aimed at putting more pressure on the federal government to finally implement open banking and ensure Canada’s small businesses benefit.
While much of the attention to date has been focused on what Canadian consumers and FinTech startups stand to gain from open banking, Saumure said that small businesses from coffee shops and hair salons would also benefit greatly from its implementation—something he has come to learn firsthand through years spent serving them.
Bankruptcy docs claim faltering sales pipeline sunk Uvaro and Lighthouse Labs post acquisition
This past January, Kitchener-Waterloo, Ont.-based workforce training platform Uvaro acquired coding school Lighthouse Labs for an undisclosed amount, making it a subsidiary. Just over seven months later, both have filed for bankruptcy.
The bankruptcy documents indicate Uvaro raised capital to fund the Lighthouse Labs acquisition, then started to burn cash when its forecasted sales pipeline and government contract awards didn’t come to fruition within predicted timelines.
Clutch opens BC facility as it hits the gas on renewed Western Canada expansion
Over two years after pumping the brakes on all markets west of Ontario, Toronto-based Clutch has resumed expanding its Western Canadian presence. The online used car retailer has opened a new 30,500-sq. ft. facility in Richmond, British Columbia, just south of Vancouver.
Brent Gudelot, who leads Clutch’s efforts in the region, told BetaKit that the company expects to hire as many as 1,000 people in total across its business over the next two years, including as many as 400 in Western Canada, as it works to expand its offering nationwide.
Commissioner of Canada Elections will “explore the use” of AI
The Office of the Commissioner of Canada Elections (OCCE) has revealed in its annual report that it will “explore the use” of AI and “emerging technologies” to see how they will shape the government body’s approach for the next year.
In an email to BetaKit, an OCCE spokesperson said AI adoption was “still in the early stages” and that there were “no specific tools or timelines” planned so far.
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The BetaKit Podcast — What can talking to AI teach us?
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Feature image of Aidan Gomez, CEO of Cohere, courtesy of World Economic Forum on Flickr (CC BY-NC-SA 2.0).