Startups all around the world are contributing trillions to the economy. While San Francisco Bay and Silicon Valley are known for being startup hubs, many other areas are seeing a surge of startup companies, including Canada.
In this article, we explore startup statistics in Canada and across the globe. Read on to find out about the number of startups in Canada, the most successful Canadian startups, and many other key statistics.
Startup Statistics for Canadians
- There are over 3,000 startups in Canada.
- Most Canadian startups are in the Toronto-Waterloo area.
- Canadian startups raised C$6.3 billion in the first half of 2021.
- Clean water solutions and space technology are two of the best industries for startups.
- Steel River Group is the fastest-growing startup in Canada, growing 8,662% in two years, while Coveo has received the most funding.
- Half of the startups in Canada, the US, and the UK say finding skilled talent is their biggest challenge.
- Only 10% of startups succeed.
- ANT Group is the highest-valued startup in the world, with an estimated value of US$75 billion.
What Are Startups?
Before we get into the startup statistics, it is important to establish what exactly is meant by a startup. Generally, startups are businesses that aim to change the world and disrupt industries. Founders of startups often dream about giving society something that it needs but doesn’t exist yet. In short, they are young companies that aim to develop a unique service or a product that will be irreplaceable and irresistible to consumers.
They are known as disruptors because they want to challenge the established way of thinking and doing for entire industries. Startups are not satisfied with existing templates and want to offer consumers something new. Amazon, Facebook, Netflix, and Google are all startup companies.
Startups in Canada
While there are tens of thousands of new companies started in Canada every year, not all of them are startups since, to qualify as a startup, the company needs to create something new and unique. It is estimated that there are over 3,000 startups in Canada.
Which Industries Have The Most Startups in Canada?
23.63% of startups in Canada and the US are in the technology and telecommunications sector. Companies in insurance and finance represent 10.27%, and pharmaceutical, MedTech, and health companies make up 10.27% of all startups.
Where Are Most of the Canadian Startups Based?
While cities such as Montreal, Vancouver, Calgary, and Alberta are all in the top five for startups in Canada, statistics show that the Toronto-Waterloo area is the hub of Canadian startups. As of 2017, the Toronto-Waterloo startup ecosystem had between 2,100 and 2,700 operational startups.
Startup Funding From Venture Capitalists in Canada
Canadian startups raised C$6.3 billion from 414 deals in the first half of 2021. This was an increase from 2020 when the total invested was C$2.9 billion from 617 deals. The previous record was from 2019 when C$4.3 billion was invested in Canadian startups.
Crowdfunding For Startups in Canada
While some startups receive large investments from venture capitalists, others rely on crowdfunding platforms to get the funding they need to develop products or services. In 2020, crowdfunding for startups was C$60 million. It is predicted that by 2024, crowdfunding for startups in Canada will reach C$85.5 million. Globally, the US has the highest crowdfunding for startups at US$1.2 billion in 2020.
Average Startup Investments in Canada
How much is invested in startups depends on the area. In the Toronto-Waterloo startup ecosystem, the average amount companies receive during the seed funding round is C$500,000. In a series A funding round, the average is C$4.4 million. Both of these figures are above the global average.
The Best Industries For Startups
While startups exist in all industries, startups in certain sectors have better chances of success. One of those is initiatives to provide clean water. Investments in startups looking into clean water solutions have gone up by 25% worldwide in the last five years and totalled US$570 million.
Another sector that has seen a lot of investments is the private space industry. Investments from venture capitalists in space technology startups across the globe reached US$2.27 billion in 2019.
The snack food industry is also drawing in many investors, and startups specialising in organic, gluten-free, and low-calorie snacks perform best. In 2021, worldwide investments in the snack food industry were expected to reach around US$45.8 billion.
The Fastest Growing Startups in Canada
The Steel River Group, a pipeline and construction company founded in Calgary, Alberta, in 2017, has been the fastest-growing startup in Canada as of 2020. It grew by 8,662% between 2018 and 2020, earning it the top spot in Canada. It is an indigenous-owned business, and its infrastructure projects are conducted in collaboration with indigenous communities.
The second fastest-growing startup in Canada is Tru Earth. It is a company that specialises in developing eco-friendly detergents. Tru Earth had 8.408% revenue growth in two years. Startups ranking third and fourth in Canada are Pinnacle Logistics Solutions, with 8,257%, and Lendingarch Financial, with 6,633% growth in two years.
Startups With The Most Funding in Canada
According to Statista, Coveo is the leading startup in Canada, with US$339 million. The company, from Quebec City, Quebec, is focused on search and recommendation engines that use artificial intelligence. Behind Coveo is Nuvey, a Montreal, Quebec-based company that has received around US$330 million in funding.
Other Startups to Watch in Canada
While Coveo and Nuvei have received the most funding in Canada, and Steel River Group and Tru Earth are the fastest-growing Canadian startups, many other startups in the country are worth watching out for. These include Fellow, Shakepay, Nomic, Xandae Kardian, and Sonic Incytes.
Fellow, founded in 2017, is based in Ottawa, Ontario. They have created an app that improves meeting management for companies. The company has raised C30.5 million in funding from nine investors.
Shakepay was founded in Montreal, Quebec, in 2015 and has received C$20.8 million from three investors. The company has developed a fintech app that makes buying and selling Bitcoin easier and quicker. The app also allows users to pay and receive payments from friends.
Nomic has raised C$18 million since it was founded in 2017 in Montreal, Quebec. The funding has come from thirteen investors. They have built a platform which is used with DNA-specific technology to understand, detect, and treat various diseases.
Xandar Kardian was also founded in 2017 in Toronto, Ontario, and they create presence detection and solutions for monitoring foot traffic for smart buildings. Through three funding rounds, the company has raised C$13.7 million from three investors.
Sonic Incytes is based in Vancouver, British Columbia, and has raised C$10.6 million from eighteen investors since it was founded in 2016. The company is in the medical sector and develops advanced ultrasound technology to diagnose patients.
Startup Challenges in Canada And Globally
While startups in each country will face unique challenges, there are some common threads across the globe. Globally, the biggest challenge for startups is customer acquisition and sales in often saturated markets. 23% of startups find this to be their greatest challenge.
11% of startups said it is a challenge to attract and retain talent. 10% of startup companies found it challenging to be constantly innovative, and cash-flow and growth management posed challenges for 9% of startups.
Threats to Startup Success
20% of startup companies perceive competition as the biggest threat to their success. There is always the possibility that someone else will get a similar or a better product on the market before them. Other threats were rapid changes in the market conditions, domestic regulations and bureaucracy, and lack of financing, all at 13%.
Finding Skilled Talent is a Key Issue in Canada, The US, and The UK
When focusing on North America and the UK rather than the global picture, the perceived challenges are slightly different. 50% of startups across North America and the UK say that their companies are affected by difficulties in finding skilled talent.
In contrast, only 28% of European startups (excluding the UK) feel challenged by recruiting skilled talent. However, 27% of startups struggle to meet the high salary demands of skilled applicants, and 19% find that the best applicants often decide to work for more established companies.
Startup Failure Rates
While some startups go on to become huge global successes, not all startups are equipped to face the challenges. Around 90% of all startups fail. The failure rate is the highest in the information industry at 63%, while 53% of startups in construction, 51% in manufacturing, and 45% in services fail.
The most likely to survive are companies in healthcare and social services with 60% of them still operational after the first five years.
Most Expensive Startup Failure
The most expensive failure based on funding so far is the sports streaming company LeSports. The disclosed funding for the startup amounted to US$1.7 billion. Other costly failures include Solyndra at US$1.2 billion and Arriveo at US$1 billion.
Global Statistics For Startups
Between 2017 and the first half of 2019, the global startup economy created approximately US$3 trillion in value. In 2019 alone, 84 ecosystems around the globe produced startups with a value of over US$1 billion.
Where Are The Startup Hubs Around The World?
While in the past, startups have been concentrated in a few areas, mainly the San Francisco Bay and Silicon Valley, now startups are appearing in more places. Silicon Valley was still ranked the number one startup location in 2020, with London and New York sharing the number two spot. Beijing was in fourth place, and Boston was fifth.
The Asia Pacific area has 30% of the global startup ecosystems, a 10% increase since 2012. While the startups might be spread around the globe more than they were in the past, 74% of all value from startups is still concentrated in the top ten cities.
Where Are The Highest Valued Startups in The World?
The Asia Pacific region has the highest market valuation for startups known as unicorns. A unicorn startup is a company that is privately held and has a value of over US$1 billion. The valuation in the region was US$971.37 billion in total. North America was in second place with a valuation of US$857.57 billion, and Europe the third with US$125.86 billion.
What is The Most Valuable Unicorn Startup in The World?
ANT Group is the most highly valued unicorn startup in the world. It is a Chinese fintech business valued at US$75 billion in January 2020. Following ANT Group is ByteDance with US$75 billion and Infor with US$60 billion.
For a country with a relatively small population, Canada has quickly established itself as a country that supports innovative new businesses. After a dip in startup funding in 2020, investments were up again in 2021.
While the biggest concentration of startups in Canada is in the Waterloo-Toronto area, other startup ecosystems are found in cities such as Montreal, Vancouver, Calgary, and Alberta. The biggest startups in Canada have received investments that total hundreds of millions, and there are many fast-growing startups.
Frequently Asked Questions
There are over 3,000 startups in Canada, and the majority of them are in the Toronto-Waterloo area.
Despite often having great ideas, many startups fail to meet the challenges posed by, for example, changing markets, finding investors, and hiring skilled talent. As a result, 90% of startups fail.
There are different ways startups can receive funding ranging from investments from venture capitalists to crowdfunding. There are also different rounds of startup financing depending on the stage the company is at. Startups in Canada may also qualify for funding from the government.