A recent report by Startup Genome and the Global Entrepreneurship Network has ranked Vancouver as Canada’s top startup ecosystem.
The 2017 Global Startup Ecosystem Report (GSER) took a comprehensive look at how various global cities build and sustain strong startup ecosystems. Startup Genome surveyed over 10,000 entrepreneurs across 56 ecosystems, with the support of 300 partner organizations.
“We’re seeing a lot of demand for insight into what makes the world’s most successful innovation ecosystems tick.”
The participating cities, which include Silicon Valley, Beijing, and Boston, were assessed based on their performance and eight factors influencing startup success: funding, market reach, global connectedness, technical talent, startup experience, resource attraction, corporate involvement, founder ambition, and strategy. The survey’s goal was to help startup founders, employers, regional leaders, and policymakers determine how they can grow of their startup ecosystems.
GSER found that, in addition to being ranked as Canada’s top startup hub, Vancouver ranked 15th globally. The city was ranked ahead of Toronto and Waterloo, which together ranked 16th globally. While the three cities made it to the top 20 startup ecosystems in the world, Montreal did not.
When Startup Genome first launched this report in 2013, Vancouver scored 9th out of all global cities studied. In 2015, Vancouver dropped to 18th, but still remained in the Top 20.
“We’re seeing a lot of demand for insight into what makes the world’s most successful innovation ecosystems tick, and how this knowledge can be replicated and scaled in different regions around the world,” said JF Gauthier, the CEO of Startup Genome. “Civic leaders want to invest in innovation, entrepreneurship, and job creation, but they often lack the know-how to quantify what development stage their local ecosystem is at and what tangible policies and activities to focus on in order to accelerate through the ecosystem lifecycle. This report offers a concrete starting point.”
The report analyzed different cities’ “market reach” to determine how well a region’s startups can “go global” and how well ecosystems help in doing so. The report revealed that when it comes to market reach, Vancouver and the Toronto-Waterloo region ranked fifth and seventh, respectively, ahead of cities like Stockholm, Boston, and Shanghai. The report said this was in part due to Canadian cities’ access to the US market.
“Canadian cities score particularly well on market reach, driven by the high share of foreign customers that startups in Toronto-Waterloo, Vancouver, and Ottawa are able to reach,” the report reads. “This is largely because of Canadian startups’ access to the US market. When we remove that from market reach calculations…Toronto-Waterloo and Vancouver both rank below the 10th position.”
While GSER indicated that Canadian startup hubs are doing well in terms of market reach, it revealed access to talent as a weakness for Canadian startup hubs. Among the top 20 cities, Vancouver and the Toronto-Waterloo regions ranked towards the bottom of the list. The report attributed this to issues these regions face when hiring software engineers and growth employees with two or more years of experience at a prior startup.
When looking at team experiences across startup ecosystems, GSER ranked Vancouver 1st, placing it ahead of Beijing, Silicon Valley (in second place), and Boston.
“Vancouver is leveraging its unique combination of assets: Hollywood North, a strong industrial foundation, enterprise data and cloud underpinnings, and a remarkably diverse talent pool, with over half its residents having a first tongue other than English,” the report reads.
The report found that Vancouver’s 800 to 1,100 startups are worth about $9 billion, and the average Vancouver startup is bringing in $334,000 in early stage funding, which is higher than the global average of $252,000.
“The city may have the fewest number of startups in top 20, but their valuations are highly competitive. Its funding metrics point to the Vancouver ecosystem holding steady, not rising or sinking greatly,” the report reads.
“The [Corridor] benefits from multicultural talent drawn from sixteen academic institutions.”
In comparison, the Toronto-Waterloo corridor is home to between 2,100 to 2,700 startups, which are worth about $7.2 billion and pull in about $443,000 in early stage funding. The report also indicated that Toronto-Waterloo generally attract larger Series A rounds such as League, which raised a $25 million USD Series A round in June 2016.
“An estimated 2,100 to 2,700 startups thrive thanks in part to world-class engineering talent, strong entrepreneurial culture, an affordable rental market, and a global base of customers,” the report reads about the Toronto-Waterloo corridor. “The [corridor] benefits from multicultural talent drawn from sixteen academic institutions…alongside generous tax credits, government grants, and favourable currency exchange.”
Overall, the report suggests that Canadian startup ecosystems are faring well, but to continue growing, it’s important to encourage further integration and increased connections between startups, universities, and innovation hubs to develop these cities even further as leading global startup hubs.
Access the full report here.
