Vancouver’s Entrepreneurship Ecosystem
Blog Post by ELP Student Isaac Fung (Computer Science and Data Science | Class of 2022)
As a Canadian studying in the United States due to the greater opportunities that exist in the latter, last summer, I had the chance to explore first hand whether or not this was actually the case. Due to international student visa restrictions that prevented me from interning in the U.S. after I took a gap semester to do an internship, I accepted my return offer to join Amazon in Vancouver. The summer before, I had also interned at Amazon as a software engineer, but remotely for a team based in Toronto. I was excited to finally be able to go into a corporate office since all my previous internships had been remote. Living in Vancouver for the summer offered me the opportunity to observe the startup scene at one of the most entrepreneurial cities in Canada.
Vancouver is generally regarded as the second largest tech scene in Canada outside of Toronto. Due to its close proximity to Seattle and being in the same time zone as the rest of the west coast where most American tech companies have headquarters, Vancouver serves as an optimal location as the Canadian headquarters. For instance, Amazon, Microsoft, Salesforce, Brex, and more American companies have large presences for engineering talent in their Vancouver offices. Most recently, Amazon opened another office location in 2020 employing over 6,000+ employees.
Furthermore, many international employees who were unable to obtain continued work authorization through the H1-B visa are relocated to Canadian offices. Canadian immigration laws follow a merit-based system that enables skilled and educated workers to immigrate much more easily compared to the American H1-B lottery.
In terms of local talent, Vancouver contains one of Canada’s top universities, the University of British Columbia, which is often ranked top 50 globally and top 3 in Canada for computer science. There are also other solid universities nearby such as Simon Fraser University in Burnaby and the University of Victoria that also leads to a pool of hires that can fulfill positions. Since Vancouver is regarded as one of the most desirable places to live in Canada, except for the cost of living, many Canadian graduates from other top Canadian universities such as the University of Waterloo, University of Toronto, and McGill University have graduates who are willing to move out west as well.
Thus, through location, immigration, and education, Vancouver is well positioned to have plenty of great engineers and other top technical talent who are necessary to build the tangible products behind software startups.
Venture Capital Scene
Despite the fairly strong technical talent that exists in Vancouver, the component to the startup ecosystem that it is lacking along with the rest of Canada, is venture capital (VC). Due to the significantly smaller size of Canada’s economy compared to the United States, there are no venture capital firms that can match the spending of top VC firms such as Sequoia, Andreessen Horowitz, and Khosla Ventures. Even Canada’s top VC firms do not call Vancouver home which makes getting in contact with local institutional investors much more difficult than other startup ecosystems and the east coast of Canada. For instance, Real Ventures and iNovia are based in Montreal, Quebec while OMERS Ventures and Georgian Partners are based in Toronto, Ontario. Vancouver is home to a few VC firms such as 7 Gates Capital and Chrysalix Venture Capital.
Vancouver does have a fair amount of angel investors due to having a fairly wealthy population that have led to the high cost of living in the area, but it unfortunately is missing the large institutional venture capital presence that you would see at the top entrepreneurial ecosystems like the Bay Area and New York.
Lack of a local venture capital presence has not impeded the founding of some amazing startups. Slack was originally founded in Vancouver before moving its headquarters to San Francisco. Dapper Labs, the company behind one of the most promising blockchain platforms, CryptoKitties and NFT ideas such as NBA Top Shot is one of the most notable companies that calls Vancouver home. Other notable successes include PlentyOfFish which was acquired by Match Group and HootSuite which has unicorn status.
A Promising Future
Despite the limitations of being based in a city that lacks the venture capital presence of the Bay Area and New York, as well as being in a smaller economy and population, Vancouver continues to grow into one of the top entrepreneurial ecosystems in North America. Its advantageous geography, top tech talent, and vibrant startup community will likely lead to even greater growth to come.