Canadian technology companies are experiencing a remarkable surge, particularly in the realm of generative artificial intelligence. In 2025, Cohere, a Toronto-based AI firm, raised US$600-million and achieved a valuation of US$7-billion, significantly expanding its global footprint by opening offices worldwide and hiring renowned researcher Joëlle Pineau as chief AI officer. This growth comes on the heels of a year in which Cohere secured contracts with major corporations such as Royal Bank of Canada, Bell, and Dell, as its AI software for automating office tasks gained traction.
“It feels like we’re just getting started,” said CEO Aidan Gomez in a recent interview, highlighting the momentum the company has gained since entering 2025 with annualized revenues of about US$50-million and exiting the year with revenues exceeding US$150-million.
The landscape for Canadian tech firms has evolved dramatically, with the exclusive club of companies surpassing US$100-million in annual revenue growing from 71 to 77 members within a year. The data reveals that 25 of these companies are now generating over US$300-million in revenue. New additions to this elite group include Altitude Sports, Jane Software, and Payworks, which recently welcomed its first outside investor, private-equity firm Hg Capital, making founder Barb Gamey one of Canada’s wealthiest self-made women.
Among the notable newcomers is TextNow, led by CEO Derek Ting, which provides free talk-and-text mobility plans to over eight million users. After hitting the US$100-million mark in 2021, TextNow reported revenues of approximately US$160-million in 2025, demonstrating its profitability since inception with a model that relies on in-app advertising.
The surge in membership for the US$100-million club reflects the broader trend of technology companies integrating artificial intelligence into their operations. Many firms are embedding large language models into products and deploying automated agents to revolutionize business processes. Anna Sainsbury, executive chair of Vancouver’s GeoComply Solutions, noted, “For us internally, it was all about AI” in 2025, emphasizing the imperative for companies to innovate faster to maintain competitive advantage.
The urgency to adopt AI has permeated multiple sectors. Geotab, known for its telematics solutions, even implemented a scoring system to monitor employee engagement with AI tools. This implementation underscores a widespread recognition that companies must transform quickly or risk obsolescence.
Many firms that have historically focused on product improvement are now embedding AI capabilities. Jane Software co-CEO Alison Taylor remarked that embracing AI is now a survival tactic, pointing to the rapid proliferation of competing AI-driven products that threaten to outpace traditional offerings. “AI transformation is a pass-fail for companies,” she stated, stressing the necessity of quick adaptation to meet client demands.
Looking to the future, several Canadian AI companies are poised to join the US$100-million club within the next two years, including CoLab AI, Float Financial, and Blue J Legal, which raised US$167-million this year for its ChatGPT-like chatbot used by 4,000 law firms.
However, concerns linger about the sustainability of many emerging AI firms, particularly those that are currently unprofitable. As Sophie Forest, managing partner at Brightspark Ventures, remarked, “There’s a lot of exuberance, but we’re also very realistic that some of it is temporary.” The skepticism extends to the accuracy of large language models and the potential costs outweighing benefits for many users.
In contrast, most members of the US$100-million club are profitable and attract significant venture capital. With several companies actively pursuing acquisitions, the potential for a number of these firms to go public increases as capital markets begin to warm. Some returning members, such as 1Password, Clio, and StackAdapt, have surpassed US$400-million in revenue, with others like PointClickCare Technologies and Geotab on the cusp of reaching the billion-dollar revenue milestone.
The growth of the technology sector comes amid a challenging economic backdrop in Canada, as many entrepreneurs express frustration over previous government policies. However, a renewed sense of optimism appears to be taking root, with leaders like Tobi Lütke of Shopify galvanizing support for Canadian entrepreneurship. “It feels like there has been a sentiment shift,” noted Tate Hackert, chief strategy officer at ZayZoon, “with people leaning more into Canada.” As the tech landscape evolves, the potential for growth remains strong, offering hope for the future of Canadian innovation.
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