Hello to Canada’s SaaS Community,

At SAAS NORTH 2024, Inovia Capital’s Chris Arsenault took to the stage offering his bold, unfiltered view of where Canadian SaaS was heading. It was a moment of clarity in a shifting tech landscape: fewer exits, AI as table stakes, and optionality as a survival skill.

Now in mid-2025, we’re revisiting that session, not because it was optimistic or dramatic, but because so much of it came true. Chris didn’t just read the room; he read the road ahead and offered a reminder that in SaaS, you can’t predict macro conditions like tariffs or elections, but you can structure your business to adapt fast and that’s exactly what Chris urged founders to do.

Editor’s note: This conversation took place before the U.S. election, before global trade escalations, and before the current wave of AI infrastructure reshaped the SaaS stack. What follows is a look at what Chris was seeing in late 2024 and what’s since unfolded.

Key takeaways:

• Canada’s SaaS ecosystem is more mature than ever but exits are scarce, and growth takes patience.
• AI is no longer a competitive advantage, it’s the baseline.
• Optionality in your business model isn’t a nice-to-have, it’s what lets you survive (or acquire) during market turbulence.

Chris Arsenault has been investing in Canadian software since 2007, a time long before unicorns were a Canadian phenomenon, before cloud was the norm, and before AI dominated every boardroom agenda.

At SAAS NORTH 2024, Chris shared what he was seeing in the market at that moment, and where he believed Canadian SaaS was headed next. He didn’t sugarcoat it. Capital was tightening. Investors were getting pickier. Growth was still possible but only for founders willing to adapt.

Now, months later, the clarity of his message still resonates. Here’s what Chris laid out then and what it means for SaaS founders navigating 2025 and beyond.

1. Canada’s Tech Ecosystem Is Growing Up

Canadian SaaS is no longer just a feeder system for U.S. acquirers.

“We’re hitting above our weight in terms of building tech companies,” Chris said. “Before 2015, we’d sell for a few hundred million. And nine out of ten of the top tech companies in Canada were U.S. subsidiaries. That’s no longer the case.”

As of June 2025, Canada has produced an estimated 26 to 33 unicorns, and a growing cohort of companies are crossing nine-figure revenue thresholds.

But this maturity is unfolding against a more volatile global backdrop.

Rising tariffs, regulatory uncertainty, and shifting trade relationships have made international growth harder to navigate.

“2023 saw $1.2 billion CAD distributed back into Canada. But in 2024, there were zero exits.”

Editor’s note: While traditional exits slowed, the market saw a clear uptick in M&A discussions and activity heading into 2025. Companies didn’t stop moving, they just stopped exiting cleanly.

Founders are now building longer and preparing for more self-reliant growth. Optionality, whether to buy, sell, or hold, has become non-negotiable.

We give this prediction a 7.5/10.

2. Capital Is Still Flowing, But It’s Spreading Thin

Chris pointed out an emerging dynamic that appears to have only intensified in 2025: fragmented rounds and softer convictions from lead investors.

“You’ll see a press release with 12 investors. Two years ago that would have been one or two. Appetite isn’t gone; it’s just spread thinner.”

This means more complexity with each round, as syndicate management becomes trickier, closing takes longer, and founders are shouldering more of the burden.

Now, layer in global uncertainty, from cross-border risk to elections, and fundraising has become a full-time strategic function. And earned Chris an 8/10 for his predicating abilities.

To raise in this market founders need to:

• Mitigate geographic risk
• Build long-term investor relationships
• Anticipate valuation pressure

3. AI Isn’t a Differentiator. It’s a Given.

In 2024, Chris urged founders to stop treating AI like a bolt-on. Now, in 2025, that message has become even more prominent and urgent.

“If you’re building a SaaS company, or any company, and not seriously integrating AI, you’re doing it wrong. You’ll hit a wall.”

AI has become more than just a product feature; it’s started to reshape go-to-market models, backend operations, customer support and value delivery.

“Your customer needs to believe you’re ahead. Because if they don’t, someone else will be.”

Much like the shift to cloud or mobile a decade ago, SaaS leaders must now fully reimagine their product and operating models through an AI-native lens.

“Being AI-enabled is like being cloud-enabled. If you're not, you're obsolete.”

Chris gets a respectable 9/10 for this one because let’s be honest, no one gets a perfect score unless they’re also predicting the next OpenAI model name.

4. Optionality Is the 2025 Advantage

Chris’s most emphatic message (then and now) is that flexibility is everything.

“Building optionality into your business model is critical. It helped companies survive the last few years, and it’s what will define the next wave of winners.”

Whether it’s through pricing agility, multi-channel GTM strategies, or M&A readiness, companies that keep their options open are the ones better positioned to control their fate.

Chris rounded out his 2024 predictions stating that “we’re expecting a lot of M&A in 2025. You’re either the buyer or the seller but you need to have the option.”

So far? We’ll give that call a solid 6/10. While M&A activity has ticked up over 2024 (especially in the midmarket) it’s been more of simmer than a sizzle. Blame tariffs, geopolitical curveballs, or just cautious capital, but the wave hasn’t quite crested. However, deals are definitely happening, mostly behind closed doors through secondaries and quiet acquirers, but they’re happening.

Scores aside, one thing is clear: treating optionality as a foundation, not a reaction, is essential. As Chris put it “It’s a mindset. It shapes how you lead, how you raise, and how you navigate. The best companies are built for optional outcomes from day one.”

While Chris didn’t predict every twist of 2025 (no one could) he did give founders invaluable insights, with a playbook that holds up under pressure:

• Treat capital like a strategy not a lifeline.
• Build in AI
• Structure for flexibility

In SaaS, the companies that survive aren’t just the best-funded; they’re the best prepared.

SAAS NORTH is THE Canadian hub for rapidly-scaling SaaS founders and their teams. Learn, network, and grow with Canada’s largest in-person SaaS community at SAAS NORTH.