Key Takeaways
- • Ottawa has opened applications for its largest-ever venture capital program, with $700 million in government money for funds-of-funds, according to The Logic, with applications open until Jan. 21, 2027.
- • The $1.75 billion package is expected to attract at least $3.8 billion in private capital, bringing total investment above $5.5 billion, with firms required to raise $3 from private investors for every government dollar received.
- • Of a separate $750 million early growth-stage pool, $675 million is reserved for later-stage financing and $75 million for pre-seed and seed startups, a split that diverged from both CVCA and NACO recommendations.
- • The call for proposals comes nearly two years after the program was first announced, raising concerns among investors about delays in deploying capital amid weak venture fundraising, with Canadian VC firms raising $2.1 billion in 2025 versus more than $8 billion at the 2021 peak.
Summary
The federal government has opened applications for the Venture and Growth Capital Catalyst Initiative (Growth VCCI), its largest venture capital funding program to date, according to The Logic. Industry Minister Mélanie Joly announced the call for proposals, under which private investment firms and pension funds may bid for $700 million in government money for funds-of-funds that invest in venture capital firms. Ottawa expects that capital to attract another $2.1 billion from private investors. Applications from qualified funds-of-funds managers are accepted until Jan. 21, 2027. The Business Development Bank of Canada manages the program, which divides funding into three streams: $700 million for funds-of-funds, $200 million for life-sciences funds, and $100 million for emerging managers. Selected firms must raise $3 from private investors for every government dollar received. The previous iteration had a budget of $450 million, and the flagship program was first announced nearly two years ago with $1 billion.
Separately, Joly allocated a $750 million pool intended to address early growth-stage funding gaps, a question that had been debated for months within Canada's investment industry. Of that amount, $75 million goes to pre-seed and seed-stage startups and $675 million to later-stage financing. The Canadian Venture Capital & Private Equity Association (CVCA) had urged the full $750 million go to growth-stage funds capable of leading Series B and later rounds, where it says domestic investors commonly drop out. The National Angel Capital Organization (NACO) had pushed for a $500 million matching fund for pre-seed and seed investments plus $250 million for operating costs of support organizations such as angel networks and venture studios. NACO CEO Claudio Rojas nonetheless welcomed the decision, calling it the first time Canada's venture strategy starts at pre-seed. CVCA CEO Benjamin Bergen described the outcome as a "strong outcome" for scaling companies.
The delay has frustrated investors interviewed by The Logic, who do not expect the money to flow soon. The last VCCI program, announced with $450 million in April 2021, did not open applications until May 2022, and four funds-of-funds managers were selected five months later. Fundraising among those firms extended into 2024 amid a subdued venture market. Since the first iteration in 2014, Ottawa has invested about $1.2 billion in recipient funds, which have raised $3.7 billion and invested $6.4 billion in Canadian companies. The new program arrives as Canadian VC firms raised $2.1 billion in 2025, down from more than $8 billion at the 2021 peak, with the five largest funds capturing roughly 80 per cent of capital raised, according to a January RBCx report. Bergen and Rojas both urged rapid disbursement so that commitments can leverage private capital while managers are still raising.
Separately, Joly allocated a $750 million pool intended to address early growth-stage funding gaps, a question that had been debated for months within Canada's investment industry. Of that amount, $75 million goes to pre-seed and seed-stage startups and $675 million to later-stage financing. The Canadian Venture Capital & Private Equity Association (CVCA) had urged the full $750 million go to growth-stage funds capable of leading Series B and later rounds, where it says domestic investors commonly drop out. The National Angel Capital Organization (NACO) had pushed for a $500 million matching fund for pre-seed and seed investments plus $250 million for operating costs of support organizations such as angel networks and venture studios. NACO CEO Claudio Rojas nonetheless welcomed the decision, calling it the first time Canada's venture strategy starts at pre-seed. CVCA CEO Benjamin Bergen described the outcome as a "strong outcome" for scaling companies.
The delay has frustrated investors interviewed by The Logic, who do not expect the money to flow soon. The last VCCI program, announced with $450 million in April 2021, did not open applications until May 2022, and four funds-of-funds managers were selected five months later. Fundraising among those firms extended into 2024 amid a subdued venture market. Since the first iteration in 2014, Ottawa has invested about $1.2 billion in recipient funds, which have raised $3.7 billion and invested $6.4 billion in Canadian companies. The new program arrives as Canadian VC firms raised $2.1 billion in 2025, down from more than $8 billion at the 2021 peak, with the five largest funds capturing roughly 80 per cent of capital raised, according to a January RBCx report. Bergen and Rojas both urged rapid disbursement so that commitments can leverage private capital while managers are still raising.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.