Canada has problems: Here are the tech startups trying to tackle them that are worth watching

Despite the long-standing trend of Canadian founders moving to the United States and declining venture capital investment, investors say the country’s entrepreneurial ambitions have yet to be snuffed out and the challenging conditions — which include U.S. President Donald Trump’s attacks on Canadian businesses and sovereignty — are boosting a cohort of startups focusing on solving hard problems for Canada.

Venture capital investments in Canadian startups plummeted 26 per cent to $2.9 billion in the first half of 2025 compared to a year earlier — the lowest level since 2020 — but investors looking to 2026 are most drawn to companies taking on nation-building in their own ways to change the way we live and work.

That includes companies using generative artificial intelligence to build applications for lawyers, engineers and coders to supercharge productivity and growth; those disrupting and challenging incumbents in banking, logistics and health care; and companies developing technologies of the future, including dual-use technologies such as quantum computing and clean tech.

The 26 companies listed below will still need to contend with the issues facing all Canadian startups, including access to capital and obstacles to scaling, but they are all approaching inflection points this year in terms of fundraising, product maturity or global reach that make them worth watching.

Toronto-based artificial intelligence (AI) startup Cohere has made its name creating large language models (LLMs) tailored to businesses, raising US$600 million in 2025 and US$1.64 billion to date from investors such as Radical Ventures Investments Inc., Inovia Capital Inc., Nvidia Corp. and AMD Ventures, the venture-capital arm of Advanced Micro Devices Inc. It is one of Canada’s most valuable startups at US$7 billion.

Founded in 2019 by University of Toronto graduates Aidan Gomez and Nick Frosst, alongside Ivan Zhang, the company has inked partnerships with Royal Bank of Canada, Bell Canada and Dell Technologies Inc., as well as agreements with the governments of Canada and the United Kingdom to bring AI to the public service.

Cohere in 2025 opened a Montreal office and made key hires, such as Joelle Pineau, Meta Platforms Inc.’s former vice-president of AI research. It plans to expand in East Asia and has announced plans for an office in Seoul. Cohere chief executive Gomez has said the company is on its way to profitability and hinted that an initial public offering could come soon.

Toronto-based fintech Wealthsimple became one of Canada’s most valuable tech companies in 2025. In late October, it joined an exclusive list of such companies to hit a $10-billion valuation after raising $750 million in a deal co-led by San Francisco’s Dragoneer Investment Group LLC and Singapore’s sovereign wealth fund GIC Private Ltd. A few weeks before that, the company surpassed $100 billion in client assets under administration, which was three years earlier than its December 2028 goal and up almost 100 per cent from September 2024.