We have a lot to be proud of this Canada Day. From our pristine natural beauty and stellar international reputation for being polite, to the Toronto Raptors recent NBA championship, we Canadians can feel a real sense of pride. Here at Espresso, one of the things we’re most proud of is Canada’s world-class startup ecosystem. Our unique combination of internationally recognized universities, leading talent, incubators, investment funds, and accelerators all play a critical role in helping support innovation across the country.
The result is a growing ecosystem that’s punching well above its weight. Keep reading to see what we mean.
Canada’s tech ecosystem at a glance
To say Canada’s startup ecosystem is flourishing is an understatement. And, investors are putting big dollars behind many of Canada’s brightest companies. In the first quarter of this year alone, venture capitalists invested over a billion dollars across 142 deals, reports the Canadian Venture Capital and Private Equity Association (CVCA). That’s virtually double the dollars VCs invested in the same quarter last year.
This explosion in growth is just the latest example of how the industry is booming across Canada. Not only does Q1 mark the fifth billion-dollar quarter for VC investment activity since 2013, but deal sizes have increased significantly from an average of $5.5 million between 2014 and 2018, to $7.4 million in Q1. That’s a 56 percent increase from the same quarter last year. Not only that, SaaS lending makes up a significant proportion of this growth. According to PitchBook, venture capital and private equity firms invested $3.2 billion in Canadian SaaS companies alone last year, up from $2.2 billion in 2017.
From coast to coast, startups across Canada are utilizing this capital to grow their business. Canada’s many startup innovation hubs are evidence of this. Startup Genome’s 2019 Global Startup Ecosystem Report examined 150 global ecosystems based on diverse data points ranging from performance, funding, market reach, and policy from over one million companies to create an index of the top 30 global ecosystems. These ecosystems are the highest-performing regions and provide founders a range of resources to promote success (such as access to institutions and accelerators as well as talent and funding). Of note, Canada ranked third globally in terms of the number of top 30 startup ecosystems it’s home to.
The report also profiled innovation hubs across the country. The Toronto-Waterloo Corridor moved up three spots from number 16 to 13 in the top 30 ranking. Meanwhile, Calgary was named one of the top five tech ecosystems in the world for local connectedness. For their part, Vancouver was recognized in the top 10 global ecosystems in the blockchain sub-sector, while Atlantic Canada stood out for generating over $2 billion in exits since 2012. Other regions across Canada, including Atlantic Canada and Halifax, Calgary, Edmonton, Quebec City and Toronto-Waterloo, were also named ecosystems to watch across a variety of tech subsectors.
A cause for celebration
There’s no doubt that Canada’s expanding startup ecosystem is a cause for celebration this Canada Day and will be for many more to come. Across the country, startups can leverage resources made available in ecosystems that provide support and accelerate growth. Here at Espresso, we’ve been doing our part since 2009. Over the past decade, we’ve supported the Canadian ecosystem by funding nearly 300 tech companies across the country. To see some of their great stories, check out our case studies.