Q3 2026: A two-speed market, with venture capital retreating and private equity surging
WHAT’S NEW IN THIS QUARTERLY REPORT:
- Economic note from Investissement Québec’s Economic Intelligence team
- Private equity trends and developments on the Centre of Expertise’s radar
In venture capital, 92 deals totalling $863 million were recorded in Québec year to date. Deal count is down 4%, while dollars invested are up 1.6% compared with the same period in 2025. In Q3 2026, the decline was marked at the early, late and growth stages, while seed remained above its historical average. Québec is positioned close to its economic weight nationally, accounting for 23% of deals and 20% of dollars invested. The province ranks second in both deal count and dollars invested, behind Ontario.
In private equity, Québec saw an acceleration in Q3 2026, recording 82 deals totalling $11.9 billion, an increase of 8% in deal count and as much as 734% in dollars invested compared with the previous quarter. So far, 2026 totals 254 deals and $17 billion invested, ranking these first three quarters 9th out of 14 for deal count and 2nd for dollars invested since 2013. Nationally, Québec remains first for deal count, with 68% of the total, and also for dollars invested, with 62%.
In Canada and Québec, the quarter was marked by the first Canadian Investment Summit. In venture capital, Ottawa outlined a $1.75 billion plan that aims to attract at least $3.8 billion in private capital, and new funds were announced in Québec, with a focus on AI, defence and digital sovereignty. In private equity, large banks and fund managers announced envelopes of C$1.4 billion to C$50 billion for investments in Canada, notably in infrastructure, technology and defence. Financial institutions also offered relief measures to companies affected by U.S. tariffs.
Internationally, venture capital is highly concentrated: in the United States, SpaceX’s acquisition of Cursor alone accounts for 53.1% of the quarter’s exit value, while rounds of US$100 million or more captured about 80% of global funding. In private equity, activity is slowing despite still-abundant capital: according to LSEG, global mergers and acquisitions fell below US$1 trillion (−41% from Q2), and U.S. private equity deal value remains down 30.4% year over year. Private debt fundraising remains strong, but signs of stress in credit, especially among smaller borrowers, are intensifying.
Q3 2026 points to a two-speed Québec market. Venture capital recorded one of its weakest quarters since 2013, with 24 deals totalling $100 million,. Private equity, by contrast, accelerated sharply, with $11.9 billion invested, and Québec remains the national leader. Against a backdrop shaped by the first Canadian Investment Summit, the Productivity Mega Deduction and U.S. tariffs, capital is abundant but increasingly concentrated. For both asset classes, discipline in financing, exits and credit risk will be decisive in the coming quarters.
Venture Capital Highlights:
- In the first three quarters of 2026, Québec held second place nationally for both deal count (23% of national activity) and dollars invested (20% of capital deployed in Canada).
- At the seed stage, dollars invested in Q3 2026 fell 25% and deal count fell 36% compared with Q2 2026. Despite this decline from the previous quarter, seed continues to perform above its historical average.
- In Q3 2026, the late and growth stages had a weaker quarter than the previous one, with 3 deals totalling $2.8 million, a 98% decrease in dollars invested compared with Q2 2026.
- Cleantech had a very difficult first three quarters of 2026, ranking 14th out of 14 for deal count and 13th for dollars invested.
- Year to date, $863 million was invested in Québec across 92 deals. Compared with the first three quarters of 2025, this represents a 4% decrease in deal count and a 1.6% increase in dollars invested.
- The ICT sector, with 48 deals totalling $560 million, accounts for 52% of deals and 65% of dollars invested year to date.
Private Equity Highlights:
- Since the start of the year, Québec has recorded $17 billion in investment across 254 deals, placing the year-to-date total above the historical average for the same point in the year for dollars invested.
- Québec accounts for 68% of Canadian private equity deals over the first three quarters, ahead of Ontario (14%) and British Columbia (8%). The province also accounts for 62% of dollars invested in the country, ahead of Ontario (25%).
- Majority stake performance in Q3 2026 is mixed, with a 13% decrease in deal count and a 1,609% increase in dollars invested compared with Q2 2026.
- With 45 deals totalling $3.9 billion, minority stake deals rank 12th out of the past 14 years for deal count, but 1st for dollars invested.
- The industrial and manufacturing sector continues to generate a large volume of deals, with 114 deals totalling $1.37 billion, representing 45% of deals and 8% of dollars invested so far this year.
- In Q3 2026, Québec recorded an 8% increase in deal count and a 734% increase in dollars invested compared with the previous quarter.