2022 Canadian Web3 Landscape 

2022 Web3 Industry at a Glance

A total of 4 Billion CAD has been invested into Canadian Web3 companies as of the end of 2022. We have seen a steady increase year-by year since the Web3 industry in Canada first started to bloom around 2012. The biggest leaps in money invested were in 2017 and 2021, which coincided with the bull runs and the performance of the global crypto market cap at the time.

A total of 88 Canadian Web3 companies have been acquired to-date, this includes the most recent acquisition of Blockchain Foundry by WonderFi. The largest number of acquisitions were between 2017 & 2018 during a time at which a lot of new money was invested into the Canadian Web3 ecosystem. 

There are currently around 275 active Canadian Web3 companies in Canada, the exact number of this is difficult to determine at any time based on the fact that many companies that cease operations don't announce it publicly, others could be Canadian but are anonymous as its trendy within DeFi. In total there have been in the ballpark of 400 Web3 companies in Canada but since about ⅓ of them have ceased operations.

There are currently 5 Canadian Web3 Unicorns, Axelar, Blockstream, Dapper Labs, Figment, & LayerZero Labs. The fastest to achieve Unicorn status is LayerZero Labs, founded in early 2021 and crossed the $1 billion USD valuation mark just over one year later after raising $135 million USD in March of 2022.

You will be happy to know that you have the opportunity to invest in a Canadian Web3 company without having to buy cryptocurrency. There are 20 publicly traded web3 companies available on Canadian stock exchanges. They are mostly within the cryptocurrency mining sub industry and have large Bitcoin or Ethereum mining farms. Some notable companies are:

WonderFi (TSX:WNDR)

Hut 8 Mining (TSE:HUT)

Neptune Digital Assets (TSX: NDA)

NetCents Technology (CNQ: NC)

Top 100 Canadian Web3 companies

Canadian Web3 Companies are considered to have all of the following traits to have been included in this report: 

• Corporate headquarters are in Canada, 
• Actively operates in Canada, 
• Has at least one Canadian employee residing in Canada.

For our top 100 we considered the following factors

• Presence in Canada (number of Canadian employees, active in Canadian communities, etc.
• Funds raised and/or total market capitalization of the company.
• Innovative technology or product the company is producing.

Canadian Web3 Companies by City

The majority of Canadian Web3 companies are based in Toronto with 40% of the market share, followed by Vancouver at 25% and Montreal at 9%. These stats are in tandem with the current tech hub scene in Canada and their respective sizes. Other notable mentions are Calgary with 6%, Kitchener/Waterloo with 3%. All other Canadian cities that are home to Web3 companies make up the total other market share at 14%. 

Canadian Web3 Companies by Year founded 

Most Canadian Web3 companies, especially those that are still around today, are less than 5 years old, showing how young our industry still is. We see huge spikes of new companies being founded during bull markets as we see with 2017/18 and in 2021. 4 of the 5 current unicorns were founded during bull markets, the only exception being Blockstream, which was founded in 2014. We are confident that despite the bear market, the percentage of Canadian web3 companies founded in 2022 is more than 2%. However, most new companies remain in “stealth” mode for a period of time until their product is ready to launch or have completed their first fundraise. For this reason we expect a more accurate statistic of companies founded in 2022 to be published in our report next year. 

Canadian Web3 Companies Average Raise per Round

In this snapshot, we showcased the average raise per round so that founders could get a better idea of industry norms. This will help them be better prepared going into their own fundraise. For Canadian Web3 Companies:

The average Pre-Seed raise is $400k USD

The average Seed raise is $2.5M USD

The average Series A is $18M USD

The average Series B is $27M USD

The average Series C is $145M USD

The average Series D is $250M USD

Canadian Web3 Unicorns

There are currently 5 Canadian Web3 Unicorns, Axelar, Blockstream, Dapper Labs, Figment, & LayerZero Labs. Here is a brief description of each unicorn: 

Axelar is the developer of a decentralised interoperability software designed to connect blockchain ecosystems, applications, and users. The company's software is powered by byzantine consensus, cryptography, and mechanism design protocols that let applications live on different blockchains to communicate with each other, enabling clients to get a distributed network, APIs, and tools to make it easy to build cross-chain decentralised applications. Axelar was founded in 2020 and is headquartered in Waterloo, Ontario.

Blockstream is the developer of a blockchain technology designed to streamline the financial infrastructure. The company's software offers interoperable blockchain technologies (sidechains) and applies innovative uses of cutting-edge cryptography and security engineering, for commercial privacy within blockchain infrastructures, enabling companies and developers to avail products and networks that make financial markets efficient by reducing reliance on trust. Blockstream was founded in 2014 and is headquartered in Montreal, Quebec.

Dapper Labs is the developer of blockchain-based collectibles and NFT platform designed to pave the way to a more open and inclusive digital world starting with games and entertainment. The company's platform uses blockchain-enabled applications to bring fans closer to the brands they love, give people a real stake in the communities they contribute to and create new ways for consumers to become creators themselves, enabling users to access new forms of digital engagement and track their ownership securely. Dapper Labs was founded in 2017 and is headquartered in Vancouver, British Columbia.

Figment is the developer of staking, middleware, and application layer infrastructure designed for investors and developers investing in and building on Web 3. The company offers a data center and multi-cloud redundancy platform, actively participates in network proposals and provides a voice to token holders in governance matters, and offers in-depth reporting of staking rewards for tax and compliance optimization, helping investors stake their tokens, earn yield and participate in securing the blockchain. Figment was founded in 2018 and is headquartered in Toronto, Ontario.

LayerZero Labs is the developer of blockchain interoperability protocol designed to connect disparate blockchains. The company's platform achieves speed, security, and cost-efficiency by performing validation as an on-chain light node but instead of keeping all block headers sequentially, block headers are streamed on-demand by decentralised oracles, providing clients with a more secure way to make crypto transactions. LayerZero Labs was founded in 2021 and is headquartered in Vancouver, British Columbia.

Top countries investing in Canadian Web3 companies

This snapshot was created by taking the total amount of dollars invested from companies, VCs, angels, & accelerators ranking them based on the country in which they are headquartered. The country flag size represents the total amount of money originating from that country invested in Canadian Web3 companies. USA has the most investments, followed by Canada, Hong Kong, UK, Singapore, China, South Korea, & Cayman Islands. 

Top investors in Canadian Web3 companies

For this snapshot we compiled the total number of investments in Canadian companies made by companies and showcased the top companies. Creative Destruction Labs (Canada), Coinbase Ventures (USA), The Holt Xchange (Canada), & Version One (Canada) have invested the most frequently in Canadian Web3 companies.

What Canadian Founders have to say about the Canadian Web3 industry:

“Canada is home to many passionate, skilled entrepreneurs and developers that continue to push the boundaries of Web3. It is through the contributions of these talented individuals here at home that ecosystems like DeFi have been pushed to the forefront of this crucial evolution.”

- Mathieu Baril, Canadian entrepreneur & angel investor 

His current endeavour, Octav, is a Dashboard that provides sophisticated traders with an in-depth look at their crypto with cost-basis and P&L data. Octav also integrates and interacts with many protocols to enhance & facilitate all your crypto activities.

What we expect in 2023

It’s no secret that 2022 has been a tumultuous year for the Web3 industry. We’ve witnessed several instances of organisations many believed to be invulnerable, fail spectacularly. Looking forward, a beneficial consequence is that the distracting frenzy has subdued, giving room to the serious builders to continue innovating with less noise.

Conversely, in Canada, regulators have been effectively collaborating with Canadian Web3 companies to improve consumer protection with Coinsquare being the first Web3 company to receive an IIROC membership.

We are optimistic that 2023 will bring growth and maturity to the industry, with regulators working towards creating a balance of growth for Web3 companies, and protection for consumers. One thing's for certain, Canada’s Web3 potential will continue to thrive.

All the best,

The Incubella Team.

The Story Behind Incubella

Transitioning from a TradFi (traditional finance) background to tech startups, Stephen Edvi is a co-founder and leads business development at Incubella. As an avid technology and crypto enthusiast, Stephen has been actively involved in promoting the education of Web3 and co-founded Web3 Montréal, a non-profit organisation offering accessible Web3 learning and networking resources in Montreal, Canada.

With tech and gaming deeply embedded in his roots, Bilal Sanchez is amongst many young startup founders in the Web3 space trying to make an impact. After being a YouTuber for over 5 years that attracted over 50 million views, launching and failing multiple tech startups, Bilal has garnered valuable skills in marketing, community building, and operations that would lead him to building Incubella with his fellow co-founder.

If you have questions about the definitions or methodological principles used please reach out to info@incubella.co. All data presented was compiled via crunchbase & pitchbook.