Entrepreneurship in Canada 2025: Key Trends & Business Opportunities
The Canadian startup ecosystem has always been outstanding. And while 2025 proved to be a year for Canadian startups, 2025 doesn’t seem to be following in the same footsteps.
Consider this:
👉 In the year 2025, till January 2025, $191M has been raised in 11 equity funding rounds across Canada.
👉 In the same period last year (i.e. till January 2025), $402M had been raised across 51 rounds in Canada.
👉 So, 2025 has seen a 52.5% drop in funding in Canadian companies as compared to 2025.
While the seems to have a slow and rough start, it doesn’t mean that it can’t or will not pick up the momentum.
With initiatives such as the Startup Visa Program, Canada offers a breeding ground for innovative business ideas.
Explore the Canadian Startup Landscape in 2024
Canada, with its relatively small population, over the years has established itself as a favorite destination for budding and seasoned entrepreneurs. The country supports innovative business ideas that help entrepreneurs and fuel the country’s economy.
The Canadian startup ecosystem encourages fresh and innovative ideas that support market requirements and offer feasible solutions to customers.
1. Canada’s Global Standing
Canada has an impressive startup game, securing the 4th position globally and the 2nd spot in North America within the competitive top 10. With a total of 5914 startups, the nation’s entrepreneurial landscape is dynamic and diverse.
What’s cool is that these startups aren’t just in one industry – they’re thriving across various sectors, with notable strength in Edtech, Energy & Environment, and Social & Leisure.
2. City Rankings
Canada has a strong presence in the global startup scene, with 39 cities securing positions in the top 1000 globally. This shows that the country has a strong system for starting businesses, and its cities are becoming more important globally. Here’s the list of popular and best cities for startups in Canada:
| # | City | Global Ranking |
| 1 | Toronto | 23 |
| 2 | Vancouver | 41 |
| 3 | Montreal | 44 |
| 4 | Ottawa | 68 |
| 5 | Kitchener Waterloo | 76 |
| 6 | Calgary | 111 |
| 7 | Quebec City | 129 |
| 8 | Edmonton | 144 |
| 9 | Kingston | 180 |
| 10 | Halifax | 224 |
3. Popular Startups in Canada
| Startup | Function | Founders | Industries | No. of Employees | Last Funding Type | Funding Rounds | No. of Investors |
| Wombo | Deep fake lip-sync software powered by AI generating lip-syncing pictures | Akshat Jagga, Angad Arneja, Ben Zion Benkhin, Parshant Loungani, Paul Pavel | Artificial Intelligence, Digital Entertainment, Machine Learning, Mobile, Social Media, Software | 11-50 | Seed | 5 | 7 |
| Rocket Doctor | Telemedicine marketplace bringing doctor’s office to patients’ homes | Adam Teitelman, Harry Cherniak, Justin Losier, William Cherniak | Health Care, Marketplace, Medical, Mobile Apps, Software | 11-50 | Convertible note | 3 | 2 |
| Railz | Single API interacting with small company accounting software suppliers | Derek Manuge, Ron Benegbi, Sohaib Zahid | Financial Services, Software | 51-100 | Non-equity Assistance | 3 | 8 |
| Swyft | Same-day logistics B2B marketplace | Aadil Kazmi, Maraz Rahman, Zeeshan Hamid | E-Commerce, Logistics | 11-50 | Series A | 3 | 7 |
| Moves | Financial solution for the gig economy and gig worker collective | Matthew Spoke | Apps, Financial Services, FinTech | 11-50 | Grant | 4 | 1 |
| Planswell | Offers free access to actionable financial planning experience for everyone | Eric Arnold, Eric Rogness | Finance, Financial Services, FinTech, Insurance, Lending, Wealth Management | 11-50 | Debt Financing | 1 | 1 |
4. Unicorns in Canada
| Startup | Function | Founders | Industries | No. of Employees | Last Funding Type | Funding Rounds | No. of Investors |
| LayerZero Labs | Blockchain interoperability protocol connecting apps from various blockchains | Bryan Pellegrino, Caleb Banister, Ryan Zarick | Apps, Blockchain, Cryptocurrency, Software | 1-10 | Series B | 9 | 38 |
| Axelar Network | Decentralized communication platform bridging blockchain ecosystems, applications, and assets | Georgios Vlachos, Sergey Gorbunov | Blockchain, Developer APIs, Network Security, Software | 11-50 | Non-equity Assistance | 7 | 31 |
| Nexii | A platform for whole building solutions enabling rapid assembly of high-quality buildings | Ben Dombowsky | Building Maintenance, Building Material, Construction | 101-250 | Venture | 4 | 6 |
| Dapper Labs | Consumer-focused cryptocurrency company building blockchain games and supporting digital collectibles | Dieter Shirley, Mack Flavelle, Roham Gharegozlou | Blockchain, Gaming, Software | 101-250 | Venture | 7 | 123 |
| Figment | Supports the adoption, growth, and long-term success of the Web 3 ecosystem | Andrew Cronk, Lorien Gabel, Matt Harrop | Blockchain, Computer, Cryptocurrency, Network Security, Software | 1-10 | Venture | 7 | 31 |
5. Startup Failure Rate
It’s a bit of a wild ride out there – a whopping 90% of them globally are hitting roadblocks and calling it quits. Within the initial year, 10% of new businesses cease to exist, escalating to 20% by the end of the second year. Key factors contributing to startup closures are as follows:
- There is a significant 34% attributed to poor product-market fit. This underlines the crucial need for businesses to tune in and align what they’re offering with what the market is craving.
- Marketing missteps account for 22% of failures. So, the takeaway here is the need for rock-solid promotional strategies to succeed in the Canadian startup arena.
- Human resource-related issues constitute 18% of startup failures. It shows if the team isn’t working well together or doesn’t have the right skills, it can seriously impact the success of the whole venture.
- Financial challenges contribute significantly, with 16% facing cash flow issues, while 6% grapple with tech-related problems.
- Operational inefficiencies and legal complications each contribute to 2% of startup closures, emphasizing the multifaceted challenges entrepreneurs encounter in establishing and sustaining successful ventures.
6. Prominence of Rural Startups in Canada
We usually think of startups thriving in big cities. Well, that’s changing in Canada! Rural startups are stepping into the spotlight, showing that you don’t need to be in a bustling city to make it big. Take a look at these rural businesses making waves:
Mushrooming Prosperity in Canada’s Rural Landscape
In Canada’s countryside, there’s a booming mushroom business led by Stephanie Lipp and Leo Gillis. Their company, MycoFutures North Atlantic, is making fabric from mushrooms, which is way better for the environment than leather. This isn’t just about fabric; it’s helping the mushroom industry grow a lot. These entrepreneurs are showing that you can create innovative and eco-friendly stuff even outside the big ci ties.
Projected to increase by 1.6% annually by 2026, Canada recognizes the sector’s potential, evident in the $340,000 federal investment in Mushrooms Canada. The wellness industry, specifically functional mushrooms, is anticipated to surpass $23 billion by 2030.
Empowering Entrepreneurship in Halifax West: A $1 Million Boost
The Honourable Lena Metlege Diab, Member of Parliament for Halifax West, announced a contribution of $1,006,223 towards crucial business initiatives.
The Centre for Entrepreneurship Education & Development (CEED) received $500,000 for the growth of 850 startups and 200 existing businesses in Nova Scotia. This funding improves access to capital, socio-economic programming, professional development, and small business resources.
The Centre for Women in Business (CWB) secures $506,233, with notable investments in the Atlantic iCanada Mentorship Program and the Growth Incentive Funding Solution. The latter provides one-on-one advisory services and micro-contributions, empowering 20 women business owners to spur business growth.
Innisfil, Ontario: A Rural Innovation Hotbed
Innisfil, Ontario, an hour north of Toronto, stands as a model for rural innovation. The town embraces cryptocurrencies for tax payments and replaces traditional public transit with a community ride-share service.
The collaboration with Toronto Metropolitan University’s DMZ led to the launch of DMZ Innisfil, a startup incubator. This initiative provides local businesses and startups with programming, mentorship, and streamlined government purchasing opportunities.
DMZ Innisfil has supported over 52 entrepreneurs, raising $18.8 million in growth capital and generating $20 million in revenue to date, solidifying the town as an innovation hub for rural communities.
Conclusion
So, when it comes to Canadian startups in 2024, it’s like a big ol’ mix of factors shaping the path these entrepreneurial ventures take. The nation is rocking the 4th spot globally and the 2nd spot in North America. It’s a dynamic scene, always changing, always bustling with new ideas and innovation.
However, globally, 90% of startups fail. But let’s not get disheartened. These stats drop some serious wisdom, such as how crucial it is to match what you offer with what the market craves, nail marketing moves, build teams that click and keep finances steady.
Furthermore, Canada’s rural innovation hubs, exemplified by initiatives like MycoFutures North Atlantic and DMZ Innisfil, prove the transformative potential of entrepreneurial endeavors beyond urban centers.
As the nation embraces sustainable practices and technological advancements, such as mycelium-based fabric and cryptocurrency integration in municipal services, it is stepping up its game when it comes to innovation and economic growth.
In the hustle and bustle of challenges and opportunities, you’ve got a vibrant entrepreneurial spirit in Canada that just won’t quit. Take, for instance, The Honourable Lena Metlege Diab in Halifax West, throwing support behind startups and existing businesses.
As Canada deals with the changing world of startups, it’s ready to leverage new ideas, improve the economy, and influence how businesses will grow in the future, not just in Canada but around the world.
The Canadian Startup ecosystem in 2025 will be a mix of factors that will shape the path these entrepreneurial ventures take. The nation is rocking the 4th spot globally and the 2nd spot in North America. With the reputation Canada has acquired over the years of being entrepreneur-friendly, the country will remain a favorite hub for aspiring business owners to realize entrepreneurial dreams.
But there are always two sides to a coin, and in this case – the other side is the whooping 90% failure rate.
Something to worry about.
Perhaps. But then again, perhaps not.
This is where your market research skills come into play.
When you, as a business owner,
offer what the market or the customer seeks.
Address the pain points of potential customers and clients and give them viable solutions.
Your startup can fall into the 10% success rate.
So, the success of your startup relies totally on your hands.
But that’s just a small part of it.
Canada, as a country, supports fresh ideas, innovation, and viable business ideas that can fuel its economy.
If your startup fulfills all these, there is nothing to worry.
Suggested(H2): FAQs
Suggested(H3): Q. Is Canada a good place for startups?
Yes, Canada is a good place for startups because of the diversity and stability of the market. Additionally, Canada is renowned for serving both domestic and international markets, thus connecting your startup on a global level.
Suggested(H3)Q. How is the startup culture in Canada?
The startup culture in Canada is burgeoning with government-backed funding, incubators, tax incentives, and startup visa programs. Canada is recognized as the Silicon Valley of the north, and with its booming cities and excellent universities, its efforts are paying off.
Suggested(H3)Q. How many startups fail in Canada?
Startups’ failure rate in Canada is around 90%. Most of the startups are not equipped to handle the challenges.
Suggested(H3)Q. Is Canada better than the US for business?
With corporate tax rates in Canada significantly lower as compared to those in the US, it implies cost savings for businesses. This allows them to allocate resources toward growth and innovation.
