The ‘most welcoming city’ ripe for startup relocation
Entrepreneurs turn to Canada, Toronto, as political uncertainty simmers under Trump’s U.S.
Sharoon Thomas moved his cloud software operation from India to Silicon Valley in October 2015 after it was hand-picked by a high-profile venture capital fund.
He arrived to California on a business visa that restricted him to developing his business idea and didn’t allow paid work. The visa also didn’t give him a chance to become a permanent resident in the U.S.
Last summer, with the escalating anti-immigration and nationalist rhetoric from then-presidential frontrunner Donald Trump, Thomas approached Toronto-based Extreme Venture Partners, a technology venture capital firm.
In early June, Thomas, 29, settled in Toronto and his company Fulfil is already recruiting two sales executives to promote its software, which helps distributors and retailers manage their inventories along with other e-commerce products. “Toronto is the world’s most welcoming city. It is so diverse that I feel right at home,” said the native of Cochin, who has travelled and worked in Australia, Canada, Hong Kong, Spain, the United States and the United Kingdom.
“Even before Trump was elected, the U.S. (immigration) did not have provisions for startup entrepreneurs. After Trump, I felt I made a wise decision to apply to Canada. Entrepreneurs already have to deal with a lot of uncertainty. The last thing we need is (to) have our immigrant status questioned.”
The relocation is an example of a growing interest among entrepreneurs in choosing Canada over the U.S., thanks to political uncertainty south of the border under U.S. President Trump’s administration, which has made a travel ban against six Muslimmajority countries, currently being challenged in court, and a wall along the Mexican border priorities.
Thomas said a wealth of IT talent and lower startup costs give Toronto an edge, and that stability is an important consideration for entrepreneurs in selecting a location.
According to Immigration, Refugee and Citizenship Canada, as of March 15, more than 100 foreign entrepreneurs have been approved for permanent residence in Canada under the Start-up Visa Program since its inception in 2013. These entrepreneurs represent more than 60 startups launched in Canada through this program, in which candidates are heavily vetted for their business ideas and acumen.
In total, these pilot entrepreneurs received more than $3.7 million in investment capital from 32 venture capital funds, six angel investor groups and 14 business incubators designated by Ottawa. Applications are being processed in a little more than five months on average.
Some startups created under the program have already been acquired by larger companies, an indicator of success for a new venture. TalentBuddy, an online school focusing on teaching web development, was taken over by San Francisco-based Udemy last year. Huzza, a Vancouver-based video-streaming company, was bought out by Kickstarter in February.
“The evaluation of the pilot shows that it has largely met its goals,” said Immigration Department spokesperson Carl Beauchamp. “Successful startup visa applicants from a diverse range of countries have launched their companies across a number of industries. Some . . . are quickly becoming established companies.”
Ray Sharma, Extreme Venture Partners’ CEO, said inquiries from potential startups have surged since Trump came to power and the growing pool of interest allows his company to cherry-pick the best of the best.
“We want to bring American companies to Canada,” said Sharma, whose new Extreme Accelerators program hopes to fund up to 50 international startups along with providing mentorship, access to resources and connections for followon funding.
“Canada’s progressiveness and multiculturalism makes its citizenship the most valued in the world. That goes beyond business.”
If successful, up to five members of the startup team selected under Extreme Accelerators, as well as their families, can be permanent residents, Sharma said.
Hamid Akbari, CEO of Blanc Labs, a Toronto-based software startup, said political climate played a huge part in his decision to come to Canada over the U.S.
“We had to choose between the two countries. I came when (George W.) Bush was president. The administration had these policies with Iran. It was a tough situation,” said the Iranian native, 40, who first came to Canada to pursue his doctoral degree at York University in 2005.
“The challenge in the U.S. now is its unpredictability. We don’t like uncertainty. We like stability.”
Since Blanc Labs was established in 2013, it has expanded its operations to Colombia, Venezuela and the U.S. It now hires 20 employees and 150 software engineers and scientists on contract around the world.
Sharoon Thomas, right, with Fulfil co-founder Ritu Panda, says Toronto “is so diverse that I feel right at home.”
“The challenge in the U.S. now is its unpredictability,” says Hamid Akbari, CEO of Blanc Labs.