Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram LinkedIn
    SnapMunk
    • Startups
    • Crowdfunding
    • Industry Insights
    • Startup Directory
    • Newsletters
    SnapMunk
    Home»Daniel Guttenberg»As US Stock Worries Loom, Canada’s Startup Scene Booms
    Caltech Researchers Develop "Lensless Camera"
    Rocky mountains at Whistler, Canada.
    Daniel Guttenberg

    As US Stock Worries Loom, Canada’s Startup Scene Booms

    Daniel A. GuttenbergBy Daniel A. GuttenbergJune 23, 20173 Comments4 Mins Read
    Share
    Facebook Twitter LinkedIn Email

    Canada’s logging and trapping industries once made it the economic envy of the world, but in recent centuries its luster has faded. Now known primarily for its exports of comedians, weak beer, and a sport white people are good at, Canada’s economy has been in a slump of late. This would typically be a bad sign for the nation’s startups. But these are not typical times.

    Canada’s sluggish economy, dragged down in large part by slumping global oil prices (the Canucks export a lot of that, too), has triggered several other large-scale changes that have actually benefited many newer companies in the tech sector. Several coinciding events and economic evolutions have also contributed to the boom, making this a great time to be un Canadien with a billion dollar idea, the tech savvy to pull it off, and that certain je ne sais quoi that makes startup founders successful.

    Why Canada’s Stumble is Good for Startups

    One of the immediate effects of Canada’s economic downturn was the fall of the Canadian dollar. A Canadian dollar was actually worth a bit more than a US dollar a couple of years after the Great Recession, but the exchange value fell steadily from 2013 to a low of $0.68USD per Canadian dollar at the end of 2015. Since then, it’s basically stabilized at around $0.75USD.

    Source

     
    What this means for outside investors, like big tech companies and venture capital firms in the US, is that Canadian investments are cheap. Investing $100 million CAD in a business only costs you $75 million USD, which is a pretty nice discount. Investors have been in short supply in Canada for a few years, too, so founders and established startups might be willing to part with larger chunks of their businesses in exchange for much-needed cash.

    Of course, for several years US companies were more interested in hiring Canada’s tech talent than investing in Canadian companies. But for the past year or two, that’s been changing. Google Microsoft, Uber, and others are building AI research centers in Canada, and other expansions of US companies’ Canada-bound workforce are underway. This doesn’t directly help Canadian startups, but it means more domestic opportunities for emerging talent and less brain drain out of the country.

    US Uncertainty is Helping, Too

    Though several prominent tech companies are hitting record high valuations, the long rumblings of a bubble burst in the US tech sector are gaining more traction. There will be another “market correction” at some point, so the longer we go without one, the more nervous some investors get. Current political tensions, questions about the ability to hire and retain foreign workers, and other unknowns of the Trump era are fanning the flames. Against this backdrop, the discount on the Canadian dollar makes the right Canadian startups seem like safer bets.

    Startups make for safer bets than traditional Canadian wagers these days.

     
    US tech sector instability also means the talent stream is showing signs of turning around, at least in part. Not only are US companies pulling fewer Canadian tech geniuses out of their frozen homeland, but a growing number of Canadian startups now have the cash clout to attract US engineers and developers, and from healthcare to moose rides there are all kinds of incentives they can offer that US startups can’t match.

    To cap it all off, while the newly elected leader of the US is a seventy-one-year-old time bomb whose only connects to the tech world are tweeting, and sex robots (we assume) Canada’s PM is young, studied science and tech as a postgraduate, and has made millions in government investment available to his nation’s tech businesses (while also ensuring visas for incoming workers are easy for startups to secure).

    That “thanks but no thanks” look is one we’re going to need to get used to. Source

     
    The upshot? Canada’s startups are going to continue seeing a heyday for the foreseeable future. As its economy recovers and the US takes an inevitable slide, we’ll see if they can hold onto their growth or if they’ll slide back like so many BlackBerries before them.

    Daniel A. Guttenberg
    • Website
    • X (Twitter)

    CONTRIBUTOR, SnapMunk Daniel A. Guttenberg is an Atlanta-based writer who fell into the startup world by accident and has been gleefully treading water ever since. He will be survived by his beard and his legacy of procrastination.

    Related Posts

    Why the Last, Shittiest Ever Black Mirror Episode Is Definitely Its Best Ever Episode

    June 13, 2019

    Apple September 2018 Event: iPhone XS, XS Max, and More

    September 13, 2018

    Apple September 2018 Event: What’s in Store

    September 11, 2018

    Self-Driving Technology Set to Tackle Deliveries and Last-Mile Logistics

    February 27, 2018
    TOP POSTS

    Beyond Bonjour: Mastering Languages for a World Without Borders

    March 26, 2024

    Speak Like a Boss: Mastering Languages for Startup Success

    March 26, 2024

    Save Money While Going Green With Arcadia Power

    July 25, 2019

    3 Compelling Reasons Why Your Tech Startup Needs A .TECH Domain

    June 21, 2019

    Subscribe to Updates

    Get the latest creative news from FooBar about art, design and business.

    SnapMunk is dedicated to providing readers with all things interesting, exciting and entertaining in the world of tech news, startup companies and startup culture.

    We're social. Connect with us:

    Facebook X (Twitter) Instagram LinkedIn
    TOP INSIGHTS

    Beyond Bonjour: Mastering Languages for a World Without Borders

    March 26, 2024

    Speak Like a Boss: Mastering Languages for Startup Success

    March 26, 2024

    Save Money While Going Green With Arcadia Power

    July 25, 2019
    GET INFORMED

    Subscribe to Updates

    Get the latest creative news from FooBar about art, design and business.

    Facebook X (Twitter) LinkedIn Instagram
    • Home
    • Startups
    • Crowdfunding
    • Industry Insights
    • Startup Directory
    © 2025 SnapMunk. Designed by SnapMunk.

    Type above and press Enter to search. Press Esc to cancel.