#WeTheNorth — Canada quietly closes the gap with Silicon Valley in 2020
C100 was founded as a cultural movement for all technology professionals to help Canadian entrepreneurs.
The C100 is celebrating 10 years from its founding this week. A milestone worth reflection and excitement. They published a report this week “Celebrating ten years of building the preeminent global community of Canadians in tech”.
The data was startling — validating Canada has accelerated closing the gap with Silicon Valley — aka “owning the podium”.
Anthony Lee and I co-founded the C100 a decade ago as a movement of Canadian technology professionals who felt deeply inspired by the need to give back to the next generation of Canadian entrepreneurs. At the time, the Canadian tech landscape was very challenged — Nortel had gone bankrupt, we were seeing the decline of RIM, and there was effectively no venture capital. Our thought was simple: how can we give Canadian technology entrepreneurs a chance to survive and realize their potential?
We had an earnest drive to give back to the country we owed so much to.
We wanted to see if other accomplished Canadians felt compelled to give back. We were amazed by the support we received from volunteer mentors, experienced startup founders, corporate partners, and by our government. Our aim was to connect the 100 most successful Canadian entrepreneurs in the Bay Area with the 100 highest potential entrepreneurs in Canada — our best industry veterans and the rookies.
We were deeply inspired by Canada’s gold medal success
at the Vancouver Olympics in 2010 and wanted to see if we could rally and support Canadian entrepreneurs to bring the same kind of energy and determination to “own the podium” in technology.
As the community gained momentum increasing the flow of people, ideas, and capital, Canadian entrepreneurs began to have a more level playing field. Our aspirations for the community grew, too.
This goal at times felt far-reaching or perhaps unattainable. However, by 2019, Canadian founders accounted for over 30% of global tech IPO value.
Companies that had come out of the 2008 recession to global domination in just ten years like Lightspeed, PagerDuty, Uber, Slack, Cloudflare, and Shopify. With a total market cap of $162B, Canadian technology entrepreneurs are now owning the podium by any definition!
But our work doesn’t stop here. In fact, we are just getting started. In the next ten years, we imagine another order-of-magnitude step change for the scale and reach of Canadian entrepreneurs in companies big and small and are taking the first steps on that new journey. As quiet confidence in our sector grows, so does the thrill of helping each other through the roller coaster to create a supportive community with an aspiration for greatness.
A year ago, I wrote a controversial post “BreakawayGrowth — Winter is coming” on how Toronto was going to displace Silicon Valley, much the way Silicon valley had displaced Boston in the early 1990s.
In the critical metrics of the movement of skilled human capital, invested capital, and investment returns, Canada had a breakaway year in 2019!
“Canada experienced ten years of unprecedented growth in its technology ecosystem, closed out by a record-shattering 2019. The past five years have seen sustained year-over-year growth in venture capital (VC) investment into Canadian technology companies on all metrics: total dollars invested, the number of deals, and average deal doubling in size.”
In 2019, the volume of VC invested in Canada had its greatest uptick ever with 40% growth over the previous year with $27B invested over the last decade & over $6.2B invested in 2019 alone.
Not only is capital flowing into Canada, but the returns are increasingly competitive with the US and on a trajectory to surpass them. This likely due to both better outcomes for Canadian startups, but also the materially lower costs in Canada.
“As the world shifts from “growth at all costs” to “path to profitability” and a focus on metrics, the Canadian companies and entrepreneurs forced to do more with less should easily transform into by-the-numbers’ superior companies. Proximity matters less and less as a result of COVID; Canadian companies should now feel emboldened. To be sure, COVID has caused dislocation and the need to rethink value propositions, but we are still in the early innings of global digitization. It is essential our entrepreneurs continue to tackle difficult problems, think globally and leverage Canada’s powers of attraction as it relates to immigration and culture. We are poised to succeed.” David Rozin Vice President and Head, Technology and Innovation Banking, Scotiabank
The most critical element to success as articulated in last year’s post — was again supported by the data this year — the most skilled people on the planet are voting with their feet moving to Canada.
The gap between the US & Canada in terms of the skilled immigrant population is now 560% higher in Canada vs the US. Canada is most likely to dramatically increase this gap again during 2020. This week President Trump suspended visas allowing hundreds of thousands of foreigners to work in the U.S. The most attractive and easiest place for 100,000s of extremely talented workers to move and keep the continuity with their work and home life is Canada.
Citing the depth of technical talent and world-class universities, iconic global players are also making moves north, and their investments are driving substantial job gains. In Q4 of 2019, Amazon announced its plan to create 10,000 jobs in Vancouver. Google and Apple made similar announcements for 5,000 jobs each in Montreal, Hamilton and Vancouver announced an investment of over $200M in Toronto over five years.
Over the past five years, 80,000 new tech jobs have been created in Toronto alone, more than San Francisco, Seattle, and Washington, D.C. combined!
The impact of President Trump’s decision will likely have a bigger impact on Canada’s economy than the 1997 hand over of Hong Kong to China when 1,000s of skilled entrepreneurs immigrated to Canada
Despite the challenging start of the year, there are over 12,000 tech open job postings in Canada. We will likely look back at 2020 as the year Canada accelerated and ultimately displaces Silicon Valley as the epicenter of global tech. One indicator we are looking at closely is the movement of VC offices. Firms like Charles River Ventures, Battery Ventures, Bain Capital, Greylock, and others moved their center of investing from Boston to Silicon Valley in the ’90s. A clear reaction to a massive change in where the most interesting the entrepreneurs & companies that were driving the biggest opportunities.
“Investments from top-tier U.S. funds are no longer an anomaly in Canada - many of the best VC firms like Accel, Bessemer, a16z, GGV in the U.S. (to name a few) and the top corporate VCs have now made Canadian investments and have an appetite for more. And we’re seeing more US-based LPs investing into Canadian VC and growth equity firms.” Win Bear, Head of Business Development Canada, Silicon Valley Bank
Canada represents the best place on the planet to start a company with equal access to capital, markets, and arguably clear advantages in access to talent and costs. If we start to see US VCs moving or opening new offices in Canada, it will be a clear validation that the tipping point has happened.
The most exciting data point from the report was Shopify crossing $2B in revenue & over a $100B US market cap becoming Canada’s biggest company. These metrics are significant leading indicators, to a boom of native growth of high ambition & well-financed entrepreneurship. Much like Ottawa based Newbridge Networks twenty years prior, we are already seeing the next generation of thousands of entrepreneurs spin out & be inspired to achieve this same level of success. But unlike the Shopify founders, this generation of entrepreneurs will have much more fertile ground to start from — experience, access to talent, capital, and markets. Game on!
We look forward to continuing to connect people to one another, to ideas, and to motivate Canadians to build massive global businesses. Sometime over the next ten years, all of us can help the next Tobi and Harley and find ways to encourage her through the inevitable challenging days of entrepreneurship — greatness awaits.
Lastly, we encourage you to remember the advantages your maple leaf passport has given you and to stay connected to Canada wherever you are.
Co-Founder & Managing Director, BreakawayGrowth Fund
Editor’s note: Guest writer Chris Albinson is an entrepreneur turned VC based in San Francisco and co-founder of C100 and BreakawayGrowth. His 5 startups (2 in Canada, 1 in Russia, and 2 in Silicon Valley) included Newbridge Networks, Digital Island, and he led investments in Pinterest, DocuSign, and Juniper Networks all of which went public. Follow him on Twitter at @chrisalbinson