Startup Genome has published its first cleantech report, naming a trio of Canadian ecosystems to its list of the best 35 cities and regions for cleantech startups in the world.
The report ranks the world’s strongest cleantech startup ecosystems according to six different factors: performance, funding, startup experience, knowledge, talent, and focus.
Toronto-Waterloo finished highest at 12, with Vancouver close behind at 16. Meanwhile, Calgary snuck into the 26 spot.
Startup Genome has identified the Toronto-Waterloo corridor, Vancouver, and Calgary as the country’s best cleantech startup ecosystems. Among the three, Toronto-Waterloo finished highest at 12, with Vancouver close behind at 16. Meanwhile, Calgary snuck into the 26 spot.
Toronto-Waterloo’s strong ranking is consistent with how it measures up overall compared to other ecosystems globally, as the region was ranked 14 across all verticals last fall, according to Startup Genome. On the West Coast, the organization’s report indicates that Vancouver and Calgary’s cleantech sectors outperform their overall startup ecosystems by far.
The Toronto-Waterloo region’s ranking as the top cleantech hub in Canada is an interesting one, particularly as British Columbia (BC) is often seen as the country’s leader in this sector.
In fact, Toronto-Waterloo’s finish appears to contrast with the findings of the Cleantech Group’s latest Global Cleantech 100, which was dominated by BC startups, many of which were MaRS portfolio firms.
Tyler Hamilton, director of ecosystem for cleantech at MaRS Discovery District told BetaKit that he wouldn’t be surprised to see Toronto-Waterloo’s outrank Vancouver in terms of cleantech, but added that “it could just as well go the other way” given the quality cleantech startups emerging from the Vancouver area.
According to Hamilton, each region has its own strengths. “However, Toronto-Waterloo might edge out Vancouver by the sheer number of companies we have in the cleantech startup ecosystem and the breadth of innovation we are seeing in the region,” he added.
A spokesperson for Startup Genome told BetaKit that the organization’s data on Vancouver is limited as the city is not currently a member of Startup Genome, which may have contributed to its second place finish amongst Canadian ecosystems.
RELATED: Toronto-Waterloo rises in Startup Genome’s 2021 global ecosystem rankings as Vancouver falls
According to Hamilton, Toronto-Waterloo’s cluster of top universities “churn out a deeper pool of engineering and business talent and more specialization in areas such as advanced manufacturing, AI, and materials science.”
He added that Toronto-Waterloo’s proximity to the United States and large American markets in the northeast are also “a major benefit” compared to other ecosystems.
Founded in 2016, Startup Genome is a San Francisco-based policy advisory and research organization focused on measuring startup ecosystem performance.
The organization defines cleantech as consisting of sustainable solutions in the fields of energy, water, transportation, agriculture, and manufacturing, such as advanced materials, smart grids, water treatment, efficient energy storage, and distributed energy systems.
Startup Genome’s cleantech report draws on data from Dealroom, Crunchbase, CB Insights, PitchBook, and a variety of other sources. Startup Genome collected this data between July 2016 and June 2020.
RELATED: 13 Canadian companies crack 2022 Global Cleantech 100
Described by Startup Genome as “one of the fastest-growing and densest innovation clusters in the world,” Toronto-Waterloo ranks top 10 in the world in terms of both funding as well as talent and experience, with particular strengths in artificial intelligence, big data and analytics, and life sciences.
Toronto-Waterloo ranked particularly well in terms of funding, startup experience, knowledge, and talent, but average with regard to performance and focus. The region features early-stage players like Trusscore, eLeapPower, and EnPowered, as well as promising larger companies like Hydrostor, Li-Cycle, and Ecobee, which have all made big moves in recent months.
RELATED: Ecobee to be acquired by US-based Generac for $770 million
Meanwhile, Vancouver performed well in each of the six factors measured by Startup Genome.
Vancouver’s strong finish comes as BC has made a number of commitments to its cleantech sector, including the launch of a new clean energy centre and a $500 million fund with a mandate that emphasizes the planet.
BC’s 2021 budget focused heavily on cleantech when it came to new tech-related spending. The budget committed $506 million for CleanBC.
Vancouver’s cleantech ecosystem features smaller players like Ionomr Innovations and Pani Energy as well as budding giants like General Fusion.
Elsewhere, Calgary snagged a perfect talent score and strong knowledge and funding scores, but ranked lower overall due in part to its average startup experience and below average performance and focus scores.
Known primarily for its oil and gas sector, the energy hub has been ramping up its investments in cleantech recently, supporting homegrown talent and drawing companies like mCloud to the region.
Startup Genome describes Calgary as “a premier North American green energy hub,” attributing some of its growth to “progressive government policy.”
Overall, the top five cleantech ecosystems in the world are Silicon Valley, Tel Aviv, Stockholm, London, and Los Angeles, respectively, according to Startup Genome.
According toStartup Genome founder and CEO JF Gauthier, the main issue facing the cleantech sector is not innovation-related. Rather, “the problem is the cleantech scaleup gap,” he writes in the report. “As of now, relatively few cleantech startups are scaling up to become global category leaders of the net-zero economy.”
Gauthier added that cleantech startups still face “significant barriers” when attempting to bring their solutions to global markets, and this problem can not be solved by “more capital alone.”
Gauthier argued the answer involves a few different solutions, including more demand-side policies, increased early-stage capital “with global industry expertise and customer relationships,” and the combination of venture capital with foundations and government funds “to create larger and more patient capital” across both the early and late stages.
“We need to do a better job of marketing the strength [of cleantech ecosystems],” said MaRS’ Hamilton, speaking about Toronto-Waterloo in particular. He also pointed to the need for stronger procurement efforts on the part of local and provincial governments.
Feature image source Unsplash.