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Why UK startups should consider expanding into Canada

 
 
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Patrick Lor, managing partner at Panache Ventures, Canada’s most active seed-stage venture capital fund, on why the Great White North is the perfect home for UK startups.

Canada is a great place for entrepreneurship for several reasons. The economics around the Canadian dollar are second to none, government programmes are designed to help startups grow, and the Canadian people are welcoming, particularly to those who want to help us build a better country. A huge bonus is that Canada is a gateway to the US, the largest consumer market and business market in the world. If we expect a Canadian company to do a million dollars revenue in Canada, our proximity to the US gives it a chance to do a 20x multiple.

So, what sectors are in demand in Canada? For that, we need to look at Canada’s strengths. We have natural resources in abundance, so there’s a lot of interest in resource development, whether that’s agriculture, oil and gas, or clean technologies. We also have a highly subsidised education system, which makes Canada one of the best-educated countries in the world, and an attractive location for EdTech startups. Lastly, our subsidised healthcare system has led to a national database of healthcare outcomes. Startups often struggle to find data to run their AI algorithms against and this makes Canada extremely attractive to MedTech startups. 

Advice for UK startups looking to expand into Canada

Number one is to show the people of Canada, whether it's the government or investors, that you want to invest in and give back to Canada. Then, in a flip of the script, you say that most of your business is going to come from the US and the rest of the world. You understand that Canada is only 37 million people out of more than 7 billion. You’re the hometown team that wants to launch into the rest of the world.

The second thing is to leverage Canadian intellect. Try to work out how best to take advantage of our government research programmes or our education programmes. We recently invested in a business that helps international students gain entry into Canadian and US universities and colleges. That’s a $4 billion company. So, perhaps that explains why there are so many extremely intelligent people with PhDs in AI, computer science and engineering that are available at available at a reasonable wage.

Lastly, understand that Canadians are some of the friendliest people in the world. Yes, that is certainly true on the street level and on the tourism level, but it also extends to our entrepreneurial ecosystem. Once Covid restrictions are lifted, get over to Canada, start going to events, start talking to people, and you'll find we are very open to conversations. After a month or two, you'll be introduced to everyone's network. It doesn't take much to become a well-known entity in any Canadian cities.

Where can I find support?

You’ll be able to seek support from three major areas. One is from the private sector and angel investors. All it really takes is a connection to a single successful entrepreneur, who will know at least five to ten investors they can connect you to. 

Second is to leverage the hybrid government, private organisations that are in place to support startups. In Calgary, we have Platform, which is a civic partner that brings together many elements of its tech startup ecosystem. Startup Edmonton in Alberta is an entrepreneurial campus and community hub with much of the same vibe. Toronto has TechTO, which is now an online monthly meetup for around 400 people.

There’s also pure government. We have organisations such as the NRC IRAP (National Research Council of Canada Industrial Research Assistance Program), which helps take research from labs to the marketplace. There are also tax incentives to the tune of millions of dollars if you spend a lot of money and are working on something sufficiently difficult from a technical standpoint. NRC IRAP will also grant money to organisations, sometimes in the form of subsidies or an interest subsidy so they can hire people. They also have a lot of engineers who will advise on your project and business model.
 

A final message

Hopefully, I’ve given a compelling argument for Canada as a great location for startups, but something founders often overlook is employee experience. The cost of living in Canadian cities is ultra-reasonable. You can hire the right people at the right price and give them a good quality of life. Healthcare, education, infrastructure, and schools are the best in the world. All of this together makes Canada one of the best places in the world to grow your startup.

Addedenum Going Global report
Published: Friday 26 November



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