York, Toronto at night.
Toronto is becoming synonymous with innovative technology startups and there’s talk about the city coming to rival Silicon Valley. A spokesperson from startup support community OneEleven helps interpret this dynamic.
There are many reasons why Toronto has seen a rapid expansion in technology startups and a vibrant knowledge economy. Government funding and encouragement from city officials and Canada’s array of world-class universities — many of which have a high technology focus like The University of Waterloo — have certainly been a big help for the developing innovation ecosystem.
To understand more about the tech startup scene in Toronto, Digital Journal caught up with Dean Hopkins, Chief Growth Officer at OneEleven.
OneEleven focuses on supporting high-growth technology companies, bringing in top founders and teams inside a community where resources, advice, and shared learnings are provided, with the aim of developing innovative and competitive companies.
Digital Journal: How is the technology scene in Toronto?
Dean Hopkins: Toronto’s tech sector is different from those in say London, Berlin, and NYC in that it is highly collaborative. The ecosystem works together to support its entrepreneurs. The major government agencies, incubators, accelerators, funders, entrepreneurs, mentors and corporate partners all work closely together for maximum impact.
This is unlike other ecosystems where the players are competitive or work independently. By collaborating, funding and resources go further and can impact more entrepreneurs.
DJ: What is it about Toronto that fosters startups and encourages a high level of innovation?
Hopkins: There is a strong set of relationships already in place between key customers, funding sources, etc. Toronto is less expensive that markets like Silicon Valley, NYC, London and Berlin across the major categories of expense allowing companies to do more with less.
Some factors include the Canadian Dollar, which trades at a significant discount to the Euro, Pound and US Dollar creating meaningful cost differences. Plus real estate, one of the major expenses is less expensive per square foot than in other ecosystems.
There’s also talent, especially technical talent, is plentiful and less expensive than in other major cities, as many studies have proven. The governments of Canada, Ontario and Toronto provide a range of incentives to allow businesses to grow and prosper. Each is committed to competitive tax rates that make it easier for businesses to succeed.
DJ: Are there other drivers?
Hopkins: In addition, some stats back up the claims that Toronto is a very attractive ecosystem: According to KPMG International's latest Global Technology Innovation report, Toronto is poised to break out as one of the world's leading technology innovation hubs over the next four years. KPMG also ranks Canada first in the G7 for corporate tax rate and cost competitiveness. Since 2012, Canada has improved its cost competitiveness over the U.S. by more than 10 percent, now offering a 14.6 percent cost advantage.
Also, CBRE stated that Toronto jumped from 12th to 6th place in its 2017 rankings, adding 22,500 tech jobs last year. That’s more than those added by San Francisco and New York combined.
A survey performed by the U.S. News & World Report finds millennials love Canada. There’s a higher rate of employment and home ownership among Canadian millennials compared to their counterparts in other countries, including the U.S. At 67 percent Ontario has the highest rate of post-secondary education attainment among OECD countries.
The Sustainable Cities Index rated Toronto as North America's most sustainable city. Toronto ranked particularly well in 'environmental performance', finishing first in North America and ninth globally.
DJ: What are some of the leading technologies that startups are working on?
Hopkins: Quite varied: AI and machine learning, virtual reality, chatbots and conversation tech. Also, there’s biometric security, health tech and blockchain.
DJ: What role does OneEleven play here?
Hopkins: OneEleven plays a key role in this coalition by focusing exclusively on the needs of scaleups, allowing us to work effectively with the other groups.
DJ: What are the aims and objectives of OneEleven?
Hopkins: OneEleven aims to create self-sustaining, high-performance businesses by providing high-growth technology companies with access to a connected global network, curated peer community and tailored resources including access to expert advice, world-class workspaces, technology, and specially-designed services to support sustainable growth.We contribute to local ecosystems with in-house programming and services that directly address the needs of scaleups by connecting them with top talent, education and special offers.
DJ: How important is a startup community or ecosystem?
Hopkins: Research at Startup Genome has found close correlations between overall ecosystem performance and individual startup success.Startup Genome found that scaleups that are well connected to the top ecosystems in the world are more successful than those that are not. For example, Stockholm, a relatively small startup ecosystem, can produce scaleup firms at a faster rate than Chicago, which is three times larger.
This global connectedness keeps them at the leading edge of global knowledge about innovation and business models. This translates into an ability to engage with global customers from their earliest stages, which in turn translates into greater scaleup success. Chicago’s founders, for example, are not globally connected outside the United States, and thus their global potential directly suffers.
DJ: Any success stories?
Hopkins: We've helped companies such as Wealthsimple, Borrowell, Tulip Retail, Big Viking Games, and 1QBit bridge the gap from Seed to Series A funding.