Canadian startups seek local funding due to U.S. tensions

Canadian startups are increasingly looking for local funding as relations with the U.S. become strained. Many companies, like Tatiana Estevez's Permalution, which focuses on collecting water from fog, faced setbacks when U.S. President Donald Trump froze funding from the U.S. Agency for International Development (USAID). This freeze affected several humanitarian projects, including Estevez's. Despite these challenges, some Canadian startups have found a silver lining. With American investments becoming less reliable, domestic investors have shown a stronger interest in supporting homegrown businesses. However, the uncertainty surrounding U.S. trade policies has led investors to ask more questions about how these changes might impact Canadian startups, potentially slowing down the fundraising process. For instance, Alexander Ip of CERT Systems noted that investors began to question how Trump's policies would affect their supply chains. While some materials are sourced from the U.S., Ip reassured investors he could find alternatives if needed. Despite the uncertainty caused by trade tensions, he has not noticed a decline in interest from European investors. Canadian venture capital remains more limited compared to the U.S., where funding is more competitive. Corey Ellis, CEO of Growcer, pointed out that Canadian investors tend to be more cautious. Still, recent trade issues have prompted more interest in Canadian companies that focus on sustainable agriculture technology. Meanwhile, Jason Morehouse from HiBoop, a mental health tech firm, has chosen not to seek U.S. funding to protect Canadian sovereignty. He believes that success can be achieved without relying on Silicon Valley. Overall, while Canadian startups face challenges, many are adapting and even thriving by seeking local funding and viewing the current situation as an opportunity to build resilience in their businesses.