Web Analytics
Why is Toronto such a capital for financial technology startups - Parkers Legacy

Why is Toronto such a capital for financial technology startups

There are 15,000 tech companies in this city—it’s one of North America’s largest tech hubs.Pair that with 250,000 people who work in financial services and you’ve got a perfect recipe for innovation.All of Canada’s big banks are headquartered in Toronto but it’s also home to major telecoms and national head offices.

Where business is concerned, it’s New York and San Francisco combined.Canadian banks fared well in the financial crisis, and prove to be resilient even now as some foreign stalwarts are facing uncertainty.While they have a reputation for conservatism, the Canadian banks have proven that they can be leaders in tech, adopting new technologies before southern neighbours.

With such a diverse, concentrated population, Toronto is also a perfect testing ground for new technologies.A single regulator and consistent standards across the country mean it’s easy for the rest of the country to then adopt those new technologies.Before roboadvisors and smartbots dominated the fintech conversation, Canada was already investing in artificial intelligence.

Universities in Ontario have strategically injected cash into AI research, producing a huge crop of engineers and researchers.Besides, Toronto has a global view, incorporating ideas from abroad and exporting new innovations around the globe.

It’s because Toranto is the Science capital city of Canada, and the business lead of the people of Canada.Toronto doesn’t have a homegrown unicorn.While the country’s most populous city hosts more 2,500 and 4,100 active tech startups, none of them has reached the billion-dollar valuation threshold required to hoist them into the coveted ranks of world-beaters.

The city is by no means a tech wasteland.The Canadian unicorns – Shopify, Kik, Hootsuite and D2L – have satellite offices in Toronto, as do U.S. giants IBM, Apple, Google, Facebook and Twitter.“Toronto has global leading companies in financial services, yet somehow we question our ability to do so in technology,” says startup veteran Mark MacLeod, former chief financial officer for Shopify Inc. and, more recently, Toronto’s FreshBooks.

Toronto was once ranked among the top-10 tech ecosystems in the world, but in the 2015 Compass Startup Ecosystem Report it slid to 17th, in part because of a perceived lack of “exit options,” through buyouts or public offerings.Compared with other centres, Toronto companies just aren’t keeping pace in the race to convert sky-high valuations into real wealth for investors.Many companies now find it too easy to get seed funding to try and make a single product into a company, to try and hit singles and doubles and not worry about home runs, Mr. Klass warns.

On-base percentage doesn’t create the biggest rewards in the venture world, and singles and doubles don’t create the conditions that attract new entrepreneurs to step up to the plate.“A lot of companies just plateau; they just can’t get over that hundred-million-dollar valuation,” said Chad Bayne, a partner in the Toronto office of law firm Osler, Hoskin & Harcourt LLP.“To basically build small little companies that get taken out effectively for their teams and not their technology, that’s not exciting.

And that’s not what as Canadians we should be striving for.” Entrepreneurs and investors speak highly of the linguistic and ethnic diversity of Toronto’s talent pool, which is also boosted by its close proximity to several world-class engineering schools and universities.Mr. Tory referred to talent as the next gold rush, and believes Toronto is sitting on a talent gold mine that, with focus and luck, can help the city build the economy of the future.“People live where they can get a great quality of life, and a big part of that is making sure you can have a good job, or that you can start up and run and flourish a business; the two go hand in hand,” he said on Thursday.

“Toronto is the economic, innovative and financial centre of this country.As Toronto does well, so Canada does well.” With these many advantages, What else is needed for more startup?

There is a little known tax law dodge that says that if you own a Canadian company that is domiciled in the Bahamas and you live in the Bahamas at least 181 days a year, then you don’t pay any taxes.

As such, the only two major Canadian cities would be Toronto and Quebec and given that Quebec is “French” oriented and Toronto is not, then the default city to succeed was Toronto.

Toronto is similar to london (uk).

Concentration of universities Concentration of investment dollars Availability of skilled legal assitance to navigate commercial and financial regulations Large pool of young grads who want to live in city City itself is a large market that consumes new products Wide variety of skilled immigrants who are often entrepreneurial