Y Combinator is stealing Canadian startups

By March 10, 2025
Plus: Richard Sutton wins Turing Award, SDTC funding is flowing again.

The above graph comes via Bram Sugarman and tracks the Canadian headquartered companies in Silicon Valley accelerator Y Combinator by batch.

Numbers can lie in many ways and this graph is no different. For a brief window during the COVID-19 pandemic, YC went fully remote, which likely aided Canadian enrollment at its peak. The graph doesn’t also track YC cohort companies with Canadian founders. When adding startups with Canadian roots, the Winter ‘24 cohort triples in size to 12.

It’s a caveat reinforced by Y Combinator CEO Garry Tan, who told Bram “The Canadians stay in the USA and raise more money. The ones that stay in SF after demo day become unicorns at 2.5X the rate.” 

Tan also noted a recent YC dinner packed with a row of founders who turned out to be Canadians looking to base their startups in San Francisco after graduation.

So is YC stealing our startups? During a trade war, no less? How dare they!

Sugarman’s data and Tan’s comments led to some understandable handwringing online, with many marking the entrepreneurial drain as a troubling sign for Canadian tech. 

But investor and TechTO co-founder Alexander Norman told me the comparison is a “red herring.” Canadian founders pulled to the best accelerator in the world’s largest startup ecosystem to raise and scale quickly is not a sign that “Canada’s ecosystem is broken,” but thinking that way might prevent Canada from focusing on its own compelling features.

“It’s like saying ‘we’re losing Canadians to Florida,’” he said. “We don’t need to build our own Florida. We don’t need to build our own YC.”

Norman expects many of these YC founders to return to the motherland one day with their wealth and experience, ultimately to the benefit of Canada. “Canadians only want to visit Florida,” he added.

It sounded great until I saw this one smart take online: “If we all did this, there won’t be anything left to come back home to.”

Douglas Soltys
Editor-in-chief

Cyber Challenge: Leading Cybersecurity Solutions, Made in Ontario

Are you a startup ready to make an impact? The Cyber Challenge, a free program from Rogers Cybersecure Catalyst and Canadian Cyber Threat Exchange, helps Ontario-based startups tackle real-world cybersecurity challenges in six key industries:

  • Automotive 
  • Life Sciences 
  • Smart Infrastructure 
  • Advanced Manufacturing
  • Law Enforcement 
  • Mining

The Cyber Challenge connects startups with industry leaders, providing direct access to new markets, product testing, and high-value exposure — building trust and accelerating adoption. Participants gain hands-on experience with seasoned organizations, refining their solutions and driving cybersecurity innovation across Ontario.

Participation is free, and no equity is taken. Select companies will receive $20,000 of non-dilutive funds. Don’t miss this opportunity to grow, collaborate, and lead the future of cybersecurity.

Apply now.

TOP STORIES OF THE WEEK

Trade war: week one

On Tuesday, the United States ended its 30-day dĂ©tente with Canada, triggering a trade war through 25-percent tariffs on many imported Canadian goods, and 10-percent tariffs on energy imports. As promised, Canada responded with in-kind tariffs on $30 billion of US goods. It was the start of a busy week: 

  • The Canadian Federation of Independent Businesses called for Prime Minister Justin Trudeau to immediately recall Parliament “to ensure
that every dollar Canada collects in tariffs is returned to affected businesses as quickly as possible.”
  • Premier Doug Ford permanently cancelled Ontario’s $100-million contract with Elon Musk-owned satellite internet company Starlink as part of a ban on all US-based companies in provincial procurement.
  • On Thursday, US President Donald Trump paused tariffs on some Canadian goods (again), halting Canada’s planned second retaliatory tariff wave. The back-and-forth nature of the economic battle sparked new frustration for the business leaders caught in the middle: “My god, this is exhausting,” Maverix Private Equity founder John Ruffolo told BetaKit. 
  • On Friday, the Government of Canada announced a $6-billion package of new measures to support Canadian businesses affected by the trade war through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC). 

One silver lining to the existential threat from Canada’s largest ally has been the concerted push to buy Canadian products. Meat subscription service truLOCAL and grocery delivery startup Tre’Dish both noted to BetaKit a rise in use.

SDTC funding flowing again with applications for projects under NRC IRAP to open “early” fiscal 2025–2026

Funding for existing cleantech projects through Sustainable Development Technology Canada (SDTC) is flowing once more, while new applications under its National Research Council Canada (NRC) replacement program will open “early” in fiscal 2025–2026, an NRC spokesperson told BetaKit.

At the moment, SDTC is working to complete the transition of its programming to the NRC. The shift follows multiple investigations finding evidence of conflict-of-interest and governance issues at the agency. BetaKit has confirmed that SDTC and the NRC are still not accepting new funding applications.

New Turing Award winner Richard Sutton calls doomers “out of line,” talks path to human-like AI

The Association for Computing Machinery (ACM) has named Canadian AI leader Richard Sutton and his American colleague Andrew Barto as the recipients of the 2024 ACM A.M. Turing Award for their work developing the foundations of reinforcement learning.

Sutton is a professor of computer science at the University of Alberta and a fellow, chief scientific advisor, and Canada CIFAR AI chair at the Alberta Machine Intelligence Institute. In an interview with BetaKit, Sutton described his Turing Award victory as “gratifying and humbling,” as well as “totally unexpected,” and shared his perspective on AI safety discourse and the path to human-like AI.

British neobank Revolut reportedly recruiting talent for a return to Canada

A Global Fintech Insider report indicates that London, UK-based neobank Revolut is actively recruiting for a CEO to lead the FinTech company’s re-entry into the Canadian market approximately four years after its initial departure.

Revolut launched a limited, beta version of its offering in Canada in 2019, only to retreat in early 2021, claiming that it was not able to offer the full range of services the firm had hoped to in Canada. The company promised to return to Canada when it could.

Toast wants women to take a radical step this International Women’s Day: rest

This International Women’s Day (IWD), April Hicke wants women in tech to take a break.

Hicke’s company, Toast, is encouraging women to take a step back from corporate IWD activities and instead let men do the planning this year. Hicke says it’s necessary in an environment where women are often tasked with the unpaid labour of advocating for themselves.

Don’t forget to check out BetaKit’s list of ten things worth reading on International Women’s Day.

Leaders discuss the right speed for innovation and regulation at Remarkable AI conference

A common thread during the Vector Institute’s Remarkable AI conference was the concern that AI regulation and adoption can be harmful if implemented badly.

CAN Health Network founder and chair Dante Morra noted that not moving quickly enough carries its own risk. Morra argued that Canada’s healthcare system is moving “way too slow” when it comes to AI adoption, and thinks it is possible for it to move faster while still doing so safely.

“Every single day, our access goes down,” he added. “Every single day, our chance to win in the new healthcare economy is less.

CONNECT WITH CANADA’S TOP FOUNDERS & INVESTORS

Get in front of leading VCs, advisors, award-winning founders, and tech executives.

Here’s what’s in store:

  • Meet 150+ industry leaders, including Jack Newton, CEO of Clio and Vitaly Pecherskiy, CEO of StackAdapt
  • Curated networking & 1:1 meetings with investors through our Meeting Exchange platform 
  • Tactical panels & speakers in our Founder Forum
  • Exclusive invite to CIX Summit’s Slack Group
  • Networking breakfast, attendee social and after party, all included

Secure your spot at CIXSummit.com.

Weekly Canadian Deals & Dollars

  • BC – PacifiCan doles out $18.3M to seven BC-based companies
  • VAN – Thinkific reports positive cash flow in 2024
  • CGY – The51 appoints Laruen Robinson as managing partner
  • WPG – Tech hubs merge to launch new early-stage funding program
  • TOR – Women Innovation Summit commits $535,000 to 4 companies
  • TOR – WonderFi plots expansion beyond crypto
  • TOR/KW – FACIT & OBIO reveal first WeSEED program cohort
  • TOR/OTT – FedDev dispenses $32M across 24 businesses
  • OTT – Shopify merchants can now prompt AI to design a store theme

The BetaKit Podcast — What is Build Canada trying to construct?

“I don’t know what Canadian DOGE is. You know what I know? That everyone is projecting both their hopes and fears onto this thing.”

Ex-Shopify VP Daniel Debow joins to discuss his Build Canada initiative, what it’s attempting to achieve, what it isn’t, and his frustration regarding associations with ‘Canadian DOGE’.

The BetaKit Quiz — This week: Richard Sutton passes Turing test, Doug Ford is done with Starlink, and #CDNtech on the moon

Think you’re on top of Canadian tech and innovation news? Time to prove it. Test your knowledge of Canadian tech news with The BetaKit Quiz for Mar. 7, 2025.

Feature image courtesy Bram Sugarman via X.

0 replies on “Y Combinator is stealing Canadian startups”