It helps that Toronto’s cost of living is lower than that of New York’s pricier tech hubs. “Although it’s not a cheap city to live, it’s still affordable,” says Morantz. “It’s not San Francisco. It’s not New York.”
Toronto is also very diverse, with 49 percent of the population made up of immigrants, according to Tech Toronto. “Having that kind of diversity helps you build great companies,” says Morantz. “When you’ve got someone who is maybe first or second generation, they are coming to the table with a unique perspective.”
The city also has a thriving infrastructure to nurture start-ups, with hubs including DMZ, a technology incubator at Ryerson University, and MaRS, which helps connect start-ups in information and communications technology, cleantech and health with funding and advice. “The communities in the last two to three years have really matured,” says Kevin Kimsa, general partner at ScaleUP Ventures, a venture fund in Toronto. “It has really acted as a catalyst for more innovation to hit the ground running.”
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Toronto’s entrepreneurial ecosystem still has some obstacles to cross. Other than OMERS Ventures, the venture capital arm of Canada’s largest pension fund, and Georgian Capital, “there is not a ton of late-stage capital,” says MacLeod. “Most of the companies that are really into expansion will need to raise that capital from the U.S.”
But at the moment, that doesn’t seem to be deterring any start-up activity.
“Something has really changed the last couple of years,” says Ben Baldwin, founder of ScaleDriver, a Toronto management consultancy that advises executives on building innovation, and founder of the Founder City Project, a network of start-up and scale-up founders.
“Canadians are kind of rubbing their hands together like evil scientists,” he said. “They are going to make a major impact.”
— By Elaine Pofeldt, special to CNBC.com
