Mila and Inovia Capital announce $100M fund to boost Canadian AI

MONTREAL — AI research institute Mila and Inovia Capital are trying to raise a US$100-million venture capital fund aimed at commercializing Canadian AI research and boosting homegrown entrepreneurship in the sector. 

Mila claims the Venture Scientist Fund will be integrated with its research and business development programs and those of Alberta’s Amii and the Toronto-based Vector Institute. The fund ultimately aims to invest in more than 55 startups that develop fundamental AI, next-generation IT and physical infrastructure, among other areas in which AI provides a competitive edge.

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Mila claims the Venture Scientist Fund will be integrated with its research and business development programs and those of Alberta’s Amii and the Toronto-based Vector Institute. The fund ultimately aims to invest in more than 55 startups that develop fundamental AI. 
The fund is Mila’s attempt to correct Canada’s underperformance in AI-based entrepreneurship. The country is home to 10 per cent of the world’s top AI researchers but accounts for less than two per cent of global AI VC investment, according to Mila research.

On hand for the announcement, AI Minister Evan Solomon referenced Mark Carney’s World Economic Forum speech on Canada’s strengths as a middle power in a world where the U.S. is no longer a reliable ally. “This is literally exactly what the Prime Minister is talking about: middle powers that invest in talent from around the world,” Solomon said.

The fund is Mila’s attempt to correct Canada’s underperformance in AI-based entrepreneurship. The country is home to 10 per cent of the world’s top AI researchers but accounts for less than two per cent of global AI VC investment, according to a joint report from Mila and Boston, Mass.-based consulting firm Bain & Company. Nearly 70 per cent of Canadian-led startups are headquartered outside the country, the report said.

That said, the ground for VC investment is fertile in the country, with 30 per cent of Canadian VC money in 2024 allocated to AI, double the 2022 share. There’s also $11.5 billion in dry powder in the Canadian venture ecosystem, according to report co-author Luca Diomede.

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“Canadian talent [and] Quebec talent gets harvested by other countries. We plant the seed, we water, we fertilize, we grow, and someone else harvests. It’s not going to happen anymore,” Solomon said.

Speaking on Wednesday, Mila scientific director Hugo Larochelle pinpointed several shortcomings of AI, including lack of reliability and a relative inability to perform physical tasks, that are ripe for startups to tackle in the short- to medium-term. Mila CEO Valerie Pisano said the Venture Scientist Fund will act as a bridge “between the lab and the market” where researchers and founders aren’t working in silos. “I want to make sure they don’t even have to cross the hall,” Pisano said.

The launch of the fund comes less than a year after the July appointment of Stéphane Marceau as Mila’s managing director of AI ventures, which aims to transform AI researchers and STEM graduates into “venture scientists” who can monetize their intellectual property. Element AI, spun out by then-Mila scientific director Yoshua Bengio and researchers at the institute, was founded in 2016 and was sold to California-based ServiceNow in 2020.

The fund was set at $100 million because “we wanted to have enough to catalyse and make a meaningful impact in a few years,” Marceau told The Logic. He wouldn’t comment on how much of the $100 million is secured, or whether the federal government will participate via the Venture Capitalist Catalyst Initiative (VCCI). “There is more to come,” Marceau said.

Mila is one of the three institutes at the centre of Canada’s national AI strategy, first launched in March 2017. The last round of the program included $20 million for each organization to boost commercialization and adoption of the technology. Mila-affiliated researchers have launched startups like Ubenwa in healthtech and Entalpic in material discovery.

AI is a red-hot area of venture investment, with firms in the field raising US$176.5 billion in the first three quarters of 2025, compared to $145.5 billion across 6,471 deals in all of 2024, according to research from PitchBook. Much of the money flowed to scaleups and unicorns raising later rounds. “The concentration of capital at the upper end reflects the high cost of developing horizontal platforms designed to power the next wave of AI applications across sectors and industries,” wrote PitchBook senior research analyst Dimitri Zabelin.

In a letter to Solomon last July and obtained by The Logic via an access to information request, the institutes argued there was an “acute funding gap” in Canada for research-driven AI companies at the pre-seed and seed stages of financing. The institutes called for the federal government to help establish a $75 million fund to back “scientist-led” firms with “direct, patient and flexible” investments. They also recommended Ottawa take the money from its Venture Capital Catalyst Initiative (VCCI), a program designed to spur tech investment, which it renewed with $1 billion in new funding in December 2024.