It’s a startup founder’s dream: a community of 2,500 early-stage
tech companies, a government investing in high-tech innovation
and expediting work permits, and venture-capital investment
levels not seen since the heyday of the dot-com bubble.
This isn’t San Francisco, New York, or London — it’s Toronto. And
its bid to become the Silicon Valley of the North is now getting
a boost from the Trump administration.
Because Trump was elected US president partly on an
anti-immigration campaign, interest in moving to Canada has
skyrocketed. The University of Toronto saw a 70% jump in
applications from American students at the end of 2016,
according to the Toronto Star — and that was before the
president began efforts to bar immigrants from seven
More recently, after a decision to delay the H-1B visas used by
American businesses to hire skilled workers, the Canadian
government under Prime Minister Justin Trudeau
announced in March an expedited work-permit process for the
same kind of foreign talent.
And while London is the world’s largest center for
financial technology, or fintench, immigration policies are
equally uncertain there ever since Britain’s 2016 decision to
leave the EU.
As a result, Canada’s startups are seeing a jump in job
applications — especially from workers in the US.
“I’ve never seen numbers like this,” said Roy Pereira, CEO of
Zoom.ai, an enterprise-tech chatbot startup. “Engineers wanting
to immigrate to Canada from places like India are normal, but
I’ve never seen anything close to the numbers of candidates from
His company had 101 candidates apply for a “full-stack software
engineering” position in a single month. Of those, 31% were from
the US, 22% from Canada, 33% from India, and 15% from elsewhere.
“Certainly the geopolitical environment right now and what Trump
has alluded to in terms of his new immigration policy and his
perspective on H-1Bs — I think that has made some people
nervous,” said Salim Teja, executive vice president of venture at
MaRS Discovery District, a
Toronto venture program helping position the city as the next
great startup destination.
Because of its large footprint in the Canadian startup scene,
MaRS — which says it is the world’s largest urban innovation hub
and home to 1,000 startups within its venture program across the
health, finance, energy, and education sectors — is often the
federal government’s go-to adviser on policy surrounding
innovation. And it isn’t just home to startups. MaRS, which spans
1.5 million square feet in downtown Toronto, houses 250 larger
organizations that lease its space, including outposts for
Facebook, Airbnb, and PayPal.
“We play an important role in connecting partners to the startup
ecosystem — those could be international investor partners, those
could be international corporate partners,” said Teja, who spent
six years in Silicon Valley before returning to Canada and
helping to build MaRs. “We match incoming talent from both around
the world and locally here in the ecosystem to our companies that
Silicon Valley investors
One draw for US investors right now is the cheap exchange rate,
which takes investment dollars further and makes investments more
attractive. Another is the softer competition for deals in the
Canadian market, meaning that startup valuations are more
reasonable than in places like Silicon Valley.
Toronto — the fourth-largest city in North America after Mexico
City, New York, and Los Angeles, with a population of 2.7 million
— is relatively accessible from startup hubs like New York and
The city has attracted the likes of Union Square Ventures, Khosla
Ventures, Horizon Venture Partners, Azure Capital, Felicis
Ventures, and Sequoia Capital, all of which have invested in
Toronto companies. Union Square’s Fred Wilson recently
said in a
blog post that Toronto was his firm’s No. 3 location for
investment after New York and San Francisco.
“They’re not just coming but they’re actually writing checks and
investing in companies, and I think that’s what drove us to have
a record year in VC last year,” Teja said.
Canadian venture-capital investments hit a 15-year high in 2016
with $3.7 billion invested, according to Thomson Reuters
data. Four hundred and fifty-nine Canadian companies closed
571 rounds of financing, a 36% increase over the previous year
and something not seen since 2000.
It’s paying off for MaRS’ startups, which are raising money and
making significant exits. Bluerock Therapeutics, a
stem-cell-therapy company, last year raised $225 million in a
Series A round — the largest in biotech-funding history, while
Highland Therapeutics raised $200 million from Morgan Stanley. As
of 2015, MaRS’ venture companies had collectively generated $1.3
billion in revenue over seven years, with annual growth of $1
billion projected by 2025.
It’s not just the startup and VC communities that are growing in
Canada — larger tech companies are expanding their presence too.
Amazon is scouting for retail space in Toronto, Teja said. That
company made a big hiring push for its web services in Vancouver
posting 1,000 positions, and opened a data center in Montreal
in December. Cisco and
are growing their footprints, and Google Canada
organized a conference last year called “Go
North” for Canadian startups.
Now, according to Teja, the question is: “As this window of
opportunity opens up, how quickly can Canada capitalize on this
Key to doing that will be developing Toronto’s own “flavor of
innovation” to enable it to compete in the world in a unique way,
Teja said, rather than simply trying to recreate the Bay Area.
One way to do that is to create new opportunities as more
industries start to overlap with one another. Health companies
are becoming tech companies, energy companies are becoming
fintech companies. MaRS, with its 1,000 startups across four
broad sectors, is well placed to capitalize on that trend.
“The next breakout companies are going to come from these overlap
areas,” Teja said.