Undeniably, Canada’s startup ecosystem has grown in the last five years. Beyond its friendly reputation, the country ranks 6th as the best country for doing business. What is it that is so attractive for entrepreneurs about Canada?
Within that five-year time frame, we’ve had major success stories such as Shopify and Hootsuite. The Canadian startup scene in particularly Vancouver, Toronto and Montreal has attracted the attention of many professionals and investors who have set foot in the country. What are the reasons?
- Top-notch talent
According to the Human Development Reports by the United Nations, Canada ranked 8th in the Education index. Canadian universities consistently graduate some of the world’s top technical talent. The hottest startups in the country are driven by some of the most brilliant technologists and marketers: Tobias Lütke (Shopify), Ryan Holmes (Hootsuite), Evgeny Tchebotarev (500px).
- Immigration policies
Canada has built its economic growth mainly through immigration. The government immigration policy in place reflects the will to make it easier for younger, highly skilled immigrants that want to enter the country and fund a startup. The Canada’s Start-up Visa Program targets immigrant entrepreneurs with the skills and potential to build innovative businesses in Canada that can create jobs for Canadians and compete on a global scale.
- Government funding
It is safe to say the Canadian government does more to support innovation than any other developed country. From grants to rebates for R&D investment to favorable tax treatment for capital gains, Canada has continuously shown its determination to supporting the creation of startups. Businesses can get upwards of 50% back in cash from the investments they make into R&D. These allocations have a tremendous impact and effectively signal to the world that Canada is very much open to business and ready to roll!
- Venture Capital
With some qualifying the startup market in the Silicon Valley as saturated; investors are looking elsewhere to invest their funds. As a result, many high-profile American investors have place big bets on the Canadian market. More than $2.3 billion was invested by venture capitalists in Canadian startups in 2014. A massive $100 million was invested in the e-commerce provider Shopify and $60 million in the Vancouver based social media dashboard Hootsuite. There number may seem humongous but they are very true and seem to increase from year to year.
- Favorable ecosystem
Last but not least, the Canadian startup ecosystem is ranked 25th in the world based on growth, performance, funding and exit values. Universities have various programs that help students in the early stages of growing their companies, such as the University of Toronto and Royal Bank of Canada (RBC) who have teamed up to create a startup program for young innovators. This ecosystem is composed of incubators, accelerators and coworking spaces through out the country.
While the world has focused on the Silicon Valley for startups, Canada has quietly become a startup powerhouse. Anyone can quickly take advantage of Canada’s solid and productive marketplace. What do you think is so attractive about Canada to investors?