No Unicorn in Toronto yet, Startups Remain in Promising Stage

While Toronto hosts between 2,500 and 4,100 active tech startups, none of them has reached the status of being a unicorn.

Toronto startups don’t have a unicorn yet. In the American investment and venture capital industry, a unicorn denotes a startup company whose valuation has exceeded around $1 Billion.

While Toronto hosts between 2,500 and 4,100 active tech startups, none of them has reached the status of being a unicorn.

This, however, does not mean that unicorn companies do not have a presence here, as Canadian unicorns including Shopify, Kik, Hootsuite and D2L have satellite offices in Toronto.

However, Toronto’s largest startups have not yet become familiar names, even fast-growing tech companies such as FreshBooks, Wattpad, and Influitive have found it hard to stand out.

The city has great talent and has all the building blocks, Startup veteran Mark MacLeod, former CFO for Shopify Inc and more recently Toronto’s FreshBooks said.

“Toronto has global leading companies in financial services, yet somehow we question our ability to do so in technology,” he said. MacLeod left the cloud-based accounting software company in 2015 to start venture capital firm SurePath Capital Partners.

While the city has a solid foundation for startups in place, experts suggest that ramping up the scale is the next step to reach international success.

Toronto Mayor John Tory recently assembled a group on innovation comprising venture capitalists, startup CEOs, tech executives, non-profit organizers and city economic development staff to figure out what the city could do to help the sector grow and thrive. He also announced plans to work together with Mayor Berry Vrbanovic of the City of Kitchener to make the Waterloo-Toronto tech corridor the best place to start a new company.

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“The bottom line is we are not at our potential. Nowhere near our potential,” the mayor of Toronto said.

Geographic fragmentation is also a reason for this, some experts feel. Getting more like-minded people in a single area could create more robust startup communities.

The recent funding boom has benefitted many startups and could help further, experts said. The change in the way foreign venture capital is invested has helped many of Toronto’s startups.

However, this could also prove to be a disadvantage for some companies who may try to market a single product as a company due to the availability of funding.

While Toronto doesn’t have a unicorn yet, if it does all the right things now, it could in a few years.