Startup Cultures Across Canada – Toronto

If your startup is thinking global, the most diverse city in the world is the best place to start. 51 per cent of the city is foreign-born, making it a cultural hot bed with global connections for startup success.

Image: Benson Kua [CC BY-SA 2.0], via Wikimedia Commons

What Makes Toronto Different

Toronto is Canada’s largest city and its financial capital, and that mix shapes the kind of startups it produces. Founders here sit next to the head offices of the big banks, insurers, telecoms and retailers, which makes the city a natural home for companies selling software to large enterprises, and for fintech in particular.

The diversity in the numbers above matters in practical ways too. A team that already speaks several languages and has family ties to other markets can test an idea abroad sooner, and hire from a talent pool that looks like its global customers. For a startup planning to sell beyond Canada from day one, that’s a real head start.

Universities anchor the rest. The University of Toronto, along with the city’s other schools, supplies a steady stream of engineers, designers and researchers, and some of the most important work in modern artificial intelligence was done there.

Toronto startup facts:

Total funding: $628M (2016 to date)
Accelerators in Toronto: 19
Academic programs: University of Toronto
Top startups in Toronto: Wattpad, Freshbooks, Bionym, Scribble Technologies, 500px

Where the 2016 Standouts Ended Up

Several of the companies on that list went on to big outcomes. In January 2021, Wattpad, the online storytelling platform, agreed to be sold to South Korean internet company Naver in a $600 million US deal, with the company keeping its Canadian headquarters.

FreshBooks, the cloud accounting company for small businesses, became one of Toronto’s unicorns. In August 2021 it raised $80.75 million in a Series E round plus $50 million in debt, at a valuation of more than $1 billion. That brought its lifetime funding to more than $200 million.

Photo-sharing platform 500px took a different path. In February 2018, it announced it was being acquired by Visual China Group, which had been a lead investor in its 2015 Series B, and moved its photo licensing to Getty Images and VCG.

Together, those stories show the range of ways a Toronto startup can end up: a foreign acquisition, an independent company growing into a billion-dollar business, and a sale to a strategic investor that already knew the company well.

Toronto’s Artificial Intelligence Boom

The biggest change since 2016 has been artificial intelligence. University of Toronto professor emeritus Geoffrey Hinton shared the 2024 Nobel Prize in Physics with John Hopfield “for foundational discoveries and inventions that enable machine learning with artificial neural networks.”

In 2017, Canada launched the Pan-Canadian Artificial Intelligence Strategy, which CIFAR describes as the world’s first national AI strategy. Toronto’s Vector Institute became one of its three national AI institutes, giving the city a dedicated home for machine learning research and training.

That research base has produced companies too. Cohere, which builds large language models for businesses, was founded in Toronto in 2019 by Aidan Gomez, Nick Frosst and Ivan Zhang, a team the University of Toronto describes as its alumni. Gomez had co-introduced the “transformer” technique behind today’s language models in a 2017 paper, and the company raised US$40 million in 2021 as it prepared to launch its technology more widely.

Toronto-Waterloo by the Numbers

Startup Genome, which ranks startup ecosystems around the world, measures Toronto together with Waterloo as one corridor. In its 2026 report, it puts the Toronto-Waterloo ecosystem’s value at $78 billion for the second half of 2023 through 2025, a measure that combines exits and startup valuations. It counts $2.2 billion in early-stage funding over that period, and $25 billion in exits from 2021 to 2025.

All three figures are well above the global averages Startup Genome reports. They aren’t directly comparable with the $628 million in 2016 funding listed above, since they cover Waterloo too and measure value rather than money raised, but they give a sense of the scale the region has reached.

What It Means for Founders

Toronto works best for startups that need big customers, deep talent or both. Enterprise software, fintech and AI companies benefit most from being close to corporate head offices, the banks and a large research community.

The trade-off is cost and competition. Toronto is an expensive city, and startups compete with banks and global tech firms for the same engineers. Founders who do well here tend to use the city’s strengths deliberately: selling into local enterprises early, recruiting from its universities and immigrant talent, and treating the city’s global connections as a route to their first international customers.

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