Canada just hit NATO's 2% spending target for the first time since the Cold War, on its way to 5% by 2035.

That's tens of billions in new defence dollars headed for the sector. MaRS Discovery District and Vimy Forge want to make sure early-stage Canadian defence and dual-use founders can actually catch some of it, rather than watching it flow to companies that have already proven themselves, or watching promising ventures get acquired and their IP move offshore.

The two organizations announced a partnership to build a capital pipeline for early-stage companies: identifying and referring promising ventures between each other, coordinating investment-readiness support, and connecting founders with investors and capital sources focused on defence, security and dual-use technology.

Why it matters

Later-stage defence companies with existing government contracts don't struggle to raise money, whether through new contracts or investment. It's the earlier-stage teams, technically strong but unproven on the commercial and organizational side, who fall through the gap.

"Canada doesn't have a shortage of ambitious defence and dual-use founders, we have a shortage of on-ramps for them," said Liam Gill, lead of the capital program at MaRS Discovery District. "Most of the capital in this country, especially in the defence sector, is chasing companies that have already proven themselves. We want to help the next generation of founders access the resources they need to build companies in Canada, and secure our sovereignty by ensuring their talent and IP stays here instead of getting acquired out from under us."

The split

Vimy Forge, a public-private partnership anchored in Fredericton, N.B. but built for national reach, brings the defence and procurement expertise. It's Canada's first national defence accelerator, and works with two cohorts of 10 ventures a year. MaRS brings the capital side: one of the country's largest investor networks, sharpened by AI-powered investor matching through MaRS Connect.

In an interview, Gill described the mechanics: as Vimy Forge works with its ventures, promising defence and dual-use companies get referred to MaRS' capital team, which meets with each venture individually, rather than running them through a standardized accelerator track, to figure out what it would take to get funded and build a specific plan. From the other direction, high-potential ventures already in the MaRS pipeline get routed to Vimy Forge for procurement-specific support and help navigating DND.

"We see the gap MaRS is talking about every day: technically brilliant founders who can build the technology but haven't had to raise a dollar or navigate a procurement process before," said Ian Whytock, co-founder of Vimy Forge. "This partnership means we're not sending them off to figure that out alone. They get our defence and security expertise and MaRS' capital network working together, at exactly the stage they need it most."

The partnership is designed to complement federal programs like ACOA's Regional Defence Investment Initiative rather than compete with them.

"It's one more route into the market, not a new gatekeeper," according to the announcement.

The pivot

Gill said MaRS is also watching a broader trend: climate-tech companies repositioning around sovereignty rather than emissions. MaRS runs one of the country's largest climate conferences, and Gill pointed to a Calgary venture that developed a way to chemically refine lithium in Alberta, avoiding the standard route of mining it in Quebec, shipping it to China for refining, then bringing it back.

The company used to lead with the emissions case for keeping that process domestic. Now it leads with the sovereignty case, refining a critical mineral at home instead of depending on China.

"There's been a lot of those pivots," Gill said. "A lot of climate companies specifically that are working in materials and resources have been able to slightly pivot the way that they present companies to have a defence or sovereignty angle."

What's next

The partnership was announced at the MaRS Capital Showcase on Sept. 22, where roughly 23 ventures across MaRS' climate, health and capital portfolios pitched to about 100 investors.

Gill framed the defence-sector collaboration as a proving ground for something larger MaRS has in the works, a broader capital-matchmaking engine pairing founders with investors suited to their sector and stage.

"Defence is the proving ground first," he said. "It won't be the last."