The Toronto-Waterloo region is among the top FinTech ecosystems globally, according to the latest report from Startup Genome.
The Global Fintech Ecosystem Report 2020, released on Tuesday, ranks the top 20 and “runner-up” FinTech startup ecosystems. Toronto-Waterloo, which Startup Genome groups together, was notably the only Canadian region or city to make the list, coming in at 12th spot.
Startup Genome found that digital-only banking is on the rise, with the addition of new services such as wealth management.
The top five global FinTech ecosystems, according to Startup Genome, are Silicon Valley, New York City, London, Singapore and Beijing.
The report stated that Europe and North America no longer dominate the top 20 FinTech ecosystems, with the Asia-Pacific region contributing as many “globally leading hubs” as North America.
Startup Genome also found that digital-only banking is on the rise, with the addition of new services such as wealth management and broader service bundles. It also reported the presence of AI in the sector, calling it “a natural complement to Fintech, helping the industry develop hyper personalized solutions.”
The report measured ecosystems based on four metrics: performance, funding, the number and quality of FinTech-related university programmes, the focus of an ecosystem in FinTech sub-sectors, and the presence of sub-sectors related to large corporations in the ecosystem.
Startup Genome listed Toronto-Waterloo as an ecosystem in its late globalization phase, pointing to specific strengths around the performance of startups and the presence of a number of large corporations that enable the growth of the FinTech sector.
Toronto-Waterloo also received a score of seven out of 10 for the number and quality of FinTech-related university programmes in the region. It was also listed as a top 15 ecosystem for funding.
Startup Genome also pointed to sub-sectors where Toronto-Waterloo has significant strength, including AI, big data and analytics, as well as life sciences. The report specifically pointed to the province of Ontario allocating $350 million to focus on the development of AI, 5G, autonomous vehicles, and other technologies. It also noted the presence of large tech companies like Google and Uber, which have AI research and development centres in the region. CIFAR, the Vector Institute, and the Waterloo Artificial Intelligence Institute were also listed in the report as institutions in Toronto-Waterloo driving local AI investment.
In regards to life sciences, Startup Genome reported that Ontario ranks seventh in life sciences employment in North America, with approximately 30,000 professionals in Toronto contributing around $2 billion to the local economy.
The report also noted the involvement of The MaRS Discovery District in supporting commercialization efforts with local hospitals, as well as MaRS-based JLABS, which incubates 49 early-stage life science companies.
Toronto has long been considered one of Canada’s major hubs for FinTech companies. In March 2019, Toronto Finance International reported the Toronto-Kitchener-Waterloo corridor had seen significant investment growth over the past five years in the FinTech space.
In PwC’s 2019 Canadian FinTech market map, Ontario dominated with more than 40 companies headquartered in the Greater Toronto Area. Vancouver and Montreal also have notable FinTech sectors, with PwC noting 25 FinTech startups headquartered between the two cities.
Toronto still faces strong competition globally, though. Toronto Finance International’s 2019 report specifically noted that the region had a smaller share of global FinTech investment in regards to the number and size of deals compared to other major financial centres such as San Francisco, London, and New York.
The first quarter of 2020 also showed some interesting trends for FinTech in Toronto, with a Hockeystick report finding that deal volume was down for many verticals including FinTech.
While Toronto-Waterloo was the only Canadian region to make Startup Genome’s top 20 FinTech ecosystems, the organization’s overall 2020 global ecosystem rankings included Toronto-Waterloo, Vancouver, and Montreal. Atlantic Canada, Calgary, Edmonton, Quebec City also received mentions in the report.
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