Montréal is Canada’s newest entrant to the top 30 of Startup Genome’s 2020 global ecosystem rankings, while Toronto-Waterloo and Vancouver have dropped by five places and one point, respectively.
For this 2020 report, Montréal tied with four other ecosystems technically for 36, however, Startup Genome ranks Montréal in its Top 30 due to a number of ecosystems tieing in the rankings. This makes Montréal the only new Canadian entrant to the top 30 list.
“The COVID-19 crisis has only accelerated the transition to a digital economy.”
Startup Genome has been tracking the development of startup ecosystems globally since 2012. Its reports rank the top ecosystems according to several metrics, such as funding, performance, talent, connectedness, and knowledge. This year, the report looked at the global impact of the COVID-19 pandemic on startups.
Startup Genome called 2019 an “exceptional year” for Montréal, citing the emergence of two homegrown unicorns: Sonder and Nuvei, as well as the exit of Lightspeed POS. Montréal was spotlighted for its affordable talent and was named the most affordable major city in North America. Startup Genome valued the Montréal ecosystem at $8.7 billion.
Toronto-Waterloo and Vancouver decreased in the 2020 ecosystem rankings, with Toronto falling from its spot at 13 to 18. The report cited Toronto-Waterloo’s lag in scaling experience, mostly in technology, as a possible reason for its decline.
Toronto-Waterloo was classified as being in a late-globalization phase, which Startup Genome defined as having more than 1,000 technology startups and attract talent and capital through a series of successful high-value exits and billion-dollar deals. Toronto-Waterloo’s ecosystem value was determined to be $17 billion, while the global average is $10.5 billion. Startup Genome highlighted artificial intelligence, analytics, and life sciences as Toronto’s strongest sub-sectors.
The report specifically noted CIFAR, the Vector Institute, and Waterloo.ai driving AI investment, as well as Google and Uber setting up AI R&D centres in the region. The province of Ontario was also ranked seventh in life sciences employment in North America, with approximately 30,000 life sciences professionals in Toronto. MaRS Discovery District and its JLABS incubator were also mentioned as a strong source of commercialization support in the city.
Although Vancouver dropped in Startup Genome’s rankings for a second time this year, it only fell by one position to 25. Last year, the city fell by nine places. The report did not specifically discuss the Vancouver ecosystem in its 2020 report, however, some notable activities in the city recently include AbCellera’s $144 million Series B round and Unbounce’s $52 million deal with private equity firm Crest Rock Partners.
While Startup Genome did not give an exact ranking, Ottawa placed in the top 100 list of emerging ecosystems.
Canada’s three largest cities were not the only ones to be highlighted in Startup Genome’s report. Ottawa, Calgary, and Atlantic Canada all made the top 100 rankings. Calgary and Atlantic Canada were both defined as being in their “activation phase.” Ecosystems in this phase are characterized by a relatively low number of technology startups, a low level of “founder know-how,” and limited advisors and mentors.
Calgary was praised for its strong cleantech and life sciences subsectors, as well as for its affordable talent, livability, and the fact that all three levels of government are supporting Calgary startups during the COVID-19 pandemic with payroll support.
Atlantic Canada’s ecosystem value was determined by Startup Genome to be $401 million. The region was also lauded for its innovation tax credits, and strong access to funding, with early-stage funding totalling $51 million in the region. The report highlighted Atlantic Canada’s strong marine technology subsector, as well as life sciences, noting the Oceans Supercluster and ABK Biomedical’s $30 million Series B round in 2019.
“Atlantic Canada is home to Canada’s Ocean Supercluster, featuring more than $300 million in R&D spending from the private and public sectors,” the report noted. “The supercluster and six regional organizations are collaborating to double the number of ocean technology startups in the region.”
While Startup Genome did not give a number of ecosystems exact rankings, Ottawa placed in the top 100 list of emerging ecosystems, ranking in the 61 to 70 position. Ottawa scored high in the talent and performance metrics.
The report also pointed to the effects of COVID-19 on startups globally. Startup Genome noted that, this year, four out of every 10 startups have three months or fewer of capital runway due to the COVID-19 crisis, as many have been hit hard from capital shock and reduced demand. Startup Genome said this means these startups will collapse if they do not raise additional capital and their revenues remain unchanged.
“The COVID-19 crisis has only accelerated the transition to a digital economy and, like every crisis, has called entrepreneurs to innovate faster and in new ways,” said JF Gauthier, founder and CEO of Startup Genome.