Canadian venture capital funding continues to rise for the third year in a row, according a report from MoneyTree Canada

Over the course of 469 deals in 2019, Canadian VC-backed companies raised US$4.1 billion, representing a 16 per cent rise in capital raised from 2018, but an 11 per cent drop in deal activity.

“Canadian venture-backed companies saw another robust year of record funding, driven by a strong second-half to close off the year,” said Sabrina Fitzgerald, national tech sector leader at PwC Canada, in a press release. “While total deal count did decline, median-deal size has risen by 13 per cent, indicating a healthy and scaling ecosystem. Canada has stood out amongst its global peers as investors continue to recognize the value of Canadian innovation.”

Regionally, Toronto-based companies topped US$1.3 billion for the second year in a row, with a deal count of 175, just five fewer than 2018.

Meanwhile, Vancouver outdid itself, hitting a six-year high with the city’s start-ups raising US$924 million, more than twice what it achieved in 2018. Larger deals drove this growth, with just 72 deals taking place over the year, down from 109 in 2018.

Montreal saw a stronger activity during second half of the year, finally raising US$931 million, a small dip of US$11 million compared to the year before. Waterloo, Ont. took home US$139 million with 25 deals, while Calgary-based enterprises raised US$132 million across 22 deals.

“Seed- and early-stage rounds made up the majority of deals and investments in Canadian [artificial intelligence], fintech, and cybersecurity companies continue to grow,” said Anand Sanwal, co-founder and chief executive officer of CB Insights. “2020 is poised to be another big year for Canada’s tech ecosystem and as the early stage bets mature, we expect many investors in the U.S. will start looking north and paying more attention to the Canadian tech ecosystem.”

Sector wise, Canadian AI companies hit record funding levels, increasing capital raised by 49 per cent in 2019, reaching US$658 million on 57 deals. Cybersecurity startups also hit a new record, raising US$398 million through 19 deals.

Clean energy, however, saw growth slow with funding falling by 33 per cent compared to 2018 — although deals rose by 50 per cent, indicating increased investor interest in the space. Digital health companies also faltered slightly, with a 26 per cent fall in funding and a 14 per cent drop in deal count, with the sector ultimately raising US$135 million across 31 deals.