2025 - East Coast Ecosystem Outlook

A brief note and outlook on the Atlantic Canadian ecosystem. 

The numbers aren’t out yet for 2024, but we anticipate that Atlantic Canada will come in at around $200 Million dollars in venture capital funding.  This would keep us on pace with previous years.

The reality on the ground doesn't always match up with that total number. Speak with founders in this ecosystem, and you’ll often get a sense that there has been a major contraction in venture dollars. It’s a “yes, but…” situation. Similar to the national story, venture funding is particularly constrained for the early stages, but much more plentiful for later stage financings.

In addition, there is also a growing concern around new company formation.  Recent data published by Entrevestor, the region’s leading data aggregator on startup metrics, showed an 11% drop year over year in active companies. While company formation is an important metric, and one that we are watching closely too, it doesn’t tell the full story.

We believe that repeat founders and founding teams is a quiet development happening in our ecosystem. Out of the eight companies that Tidal Venture Partners have backed so far, five teams are repeat founders.  That statistic borders on being anecdotal, but the current investment opportunity pipeline also reflects growth in repeat founders.  Another “yes, but…” situation.

Like the rest of the country, there’s a sense of urgency in our region right now around the resiliency of our economy. Both New Brunswick and Nova Scotia have recently elected Premiers with either a new mandate (New Brunswick) or a renewed mandate (Nova Scotia).   As we consider the outlook for 2025 in our ecosystem, one positive we see emerging is the will and interest from the provincial governments to stimulate private capital markets.  We see growing evidence that governments understand they need to provide a supportive environment for private capital development and deployment.