Q1 2023 has proven to be a rough ride for our region. Several top startups, which were previously on a growth trajectory, suddenly hit the brakes, and reversed course forcing them to let go of some employees. Last quarter, only 18% of firms hired new talent, while 30% downsized, resulting in a net loss of 521 jobs. This dip brings the total tech ecosystem jobs in Atlantic Canada down to 12,781, a low we haven’t seen since Q3 2021.
The Global Venture Capital Market
Our region isn’t alone in facing these challenges. The global venture capital market has also taken a hit, with startups raising 80% less capital and venture deals plummeting by a staggering 45% compared to Q1 2022, as reported by Carta. Although there were minor improvements in valuations from seed to Series C, these gains were overshadowed by the overall decline in funding rounds across all stages.
Down rounds surged to nearly 20% of all venture investments, while bridge rounds have become a lifeline for many startups. M&A activity has experienced a resurgence, with a 20% increase in the number of venture-backed companies being acquired or merging with others compared to Q4 2022.
Downturns can be tough, but history shows that they’re often followed by periods of recovery and growth. The emergence of new technologies, like what we are seeing in the AI space, demonstrates that our industry is constantly evolving and creating new opportunities.
If you or someone you know has been affected by a layoff, a number of our portfolio companies are currently hiring. You can see the full list of job opportunities here:
- ReelData Raises $8m USD
- NovaResp Raises $2m
- Shoelace attracts BDC investment
- The Rounds raises $1.6m in Follow-On
- SiftMed raises $2.7m
- Sandpiper Back QuickFacts
- Uber Angel Calacanis Backs Frenter
- Zen Ebikes Raises $1.25m
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