Canada has emerged as a top global startup hub thanks to various advantages like an immigrant-friendly environment, world-class innovation and R&D infrastructure, availability of tech talent, and lower costs compared to Silicon Valley. Canada also provides great opportunities for immigrant entrepreneurs to launch their startups through the Start-up Visa Program.
According to the 2022 Global Startup Ecosystem Report by Startup Genome, Toronto ranked 8th best globally out of 140+ ecosystems. Canada also has the most startup visa recipients, with over 1,295 startups launched and 6,115 jobs created by immigrant entrepreneurs until 2021.
Several emerging high-potential business sectors are especially attractive for startups in Canada currently. Based on the latest market data and funding trends, some of the top appealing opportunities include information technology (IT), clean technology, and health technology.
Eterna has helped a lot of applicants to start their businesses in information technology, clean technology, health technology, etc. With their creative and valuable business plan, the startups can be easier to gain their investment from Venture Captial Fund or Angle Investor Group which Eterna can arrange to reach out to.
According to the new Tech Talent strategy that the IRCC launched lately, startups who are supported by Venture Captial Fund or Angle Investor Group can get quicker processing time for their PR applications. So, highly supported designated organizations must be more and more attractive during the SUV applications in these future years.
Here are some of the most attractive business sectors for startups in Canada’s start-up visa program currently:
The information technology (IT) sector has emerged as one of the most attractive startups in Canada. According to the 2022 report by the Canadian Venture Capital Association (CVCA), IT accounted for 28% of all venture capital funding in Canada last year. This highlights the strong investor interest in the sector.
Canada also ranks first in the world for the availability of competent and skilled professionals in computer science entering the workforce, according to the World Economic Forum. The strong talent pool provides fertile ground for IT startups to access qualified workers. Compared to tech epicenters like Silicon Valley, tech talent in Canada also comes at more affordable salaries, giving startups a cost advantage. Canada’s major urban hubs like Toronto, Vancouver, and Montreal have thriving tech ecosystems. The lower cost of living and operations compared to the United States makes Canada appealing for early-stage tech startups.
With abundant tech talent and more reasonable costs, Canada provides an ideal environment for IT startups to bootstrap their operations. The large active VC funding also results in a vibrant exit environment, with several unicorn success stories in IT coming out of Canada in recent years. All these factors contribute to making IT one of the most attractive startup sectors currently.
Another emerging business area that is highly attractive for startups in Canada is clean technology.
The Canadian government announced investments totaling $68.2 million in 17 cleantech companies through Sustainable Development Technology Canada (SDTC). Shows high support for the cleantech sector in Canada.
Canada is already the 3rd largest cleantech market in the world, but the segment is still in the early stages of development with massive potential for growth. Clean technology spans renewable energy, green buildings, electric transport, waste management, and other sustainability-focused segments. With businesses and governments increasingly prioritizing their net zero emission goals, the demand for clean technology solutions is set to surge.
Canada is also already leading in some cleantech sub-segments like fuel cells. The federal government as well as various provinces have implemented policies to encourage cleantech adoption and sustainability. These backing government policies also boost investor confidence in cleantech ventures. Considering the high growth potential and supportive business climate, cleantech stands out as a promising field for startups to target.
In Canada’s robust public healthcare system, health technology is emerging as a high-potential area for startups. According to the CVCA report, venture capital investment in health technology crossed $1 billion for the first time in 2022. This is almost double the funding received in 2021, showcasing the rising investor appetite.
One factor that makes Canada’s healthcare system ideal for health tech innovations is that it provides startups access to healthcare providers and patients to test and validate new technologies. The single-payer public system also simplifies the implementation of innovative digital health solutions. Canada also has a sizable aging population, driving the demand for health tech products like remote patient monitoring, virtual healthcare, medical devices, and digital therapeutics.
During COVID-19, the adoption of virtual healthcare services by providers and patients in Canada accelerated enormously. This shift increases the opportunities for health tech startups. Given the demographic trends, demand dynamics, and growth in funding, health technology offers promising potential as a startup niche.
In the financial services domain, financial technology or fintech has big potential as a startup opportunity in Canada. According to the Global Fintech Index, Toronto ranked 8th globally as an attractive hub to base fintech operations. The supportive business environment includes government grants and incentives specifically targeted at fintech firms. For instance, the Ontario government provides funding for fintech incubators as well as tax incentives.
The Canadian financial sector is also dominated by a few major established players, giving ample room for fintech startups to disrupt and improve financial services with innovative products. Advanced technologies like blockchain, AI, and machine learning can be applied across areas like digital payments, insurance, wealth management, and lending to offer enhanced financial service experiences. With consumers and businesses embracing digital financial transactions, the demand outlook is strong for fintech solutions. Considering these favorable conditions, fintech stands out as an attractive avenue for startups in Canada.
These four sectors have emerged as appealing domains for startups to target, based on the latest market trends and data. The vital aspects that make them attractive include strong government support, abundant talent, massive market potential as large industries embrace technology and digital disruption, as well as surging investor funding interest.