The Martin Prosperity Institute here in Toronto recently published a new report that looks at worldwide venture capital investment by city. The report is called Rise of the Global Startup City.
The data is from 2012, because that’s what was available from Thomson Reuters, so keep in mind that there might be some variation in the rankings if we were to look at more recent data. Some of the cities sit fairly close.
Nonetheless, here are a few of the broader takeaways (from the report page):
“The United States accounts for nearly 70 percent (68.6 percent) of total global venture capital, followed by Asia (14.4 percent) and Europe (13.5 percent).”
“Just two broad regions — the San Francisco Bay Area and the Boston-New York-Washington Corridor — account for more than 40 percent of global venture investment.”
“Global venture investment is highly uneven and spiky — it is concentrated in a small number of large cities and metros around the world.”
Here are the top 20 cities by total venture capital investment (in USD millions):
And here are the top 20 cities according to venture capital investment per capita:
Given the variation in these two lists, you realize that some cities are largely benefitting from sheer size. London, for example, drops off the list when you look at venture capital investment per capita.
In fact, in this second list, 19 of the 20 cities are in the United States. The only non-American city that remains is Toronto.
The Globe and Mail published an interesting article this evening looking at the 21 largest venture capital investments in Canadian tech over the last 18 months. It’s called: Who needs Silicon Valley? Canadian startups scoring bigger deals.
To put things into perspective, total venture dollars invested in Canada last year (2014) was around $1.9 billion. In the US, that number is estimated to be somewhere around $48 billion. So there’s a big spread here. But the Globe is arguing that there’s a shift towards medium-sized Canadian tech companies raising larger and larger rounds.
Here are the top 21 largest venture capital investments made in Canada over the last 18 months:
At the same time, there’s also an attitude change that seems to be taking place. Confidence is growing. Here’s a quote from Mike McDerment of Freshbooks from the same article:
“Our goal is to be an anchor tenant in Toronto. At Freshbooks, we want to build a global company that really contributes in some meaningful way to the city,” Mr. McDerment said. He touts the local schools and talent pool and downplays the Valley’s head start.
“The money is shameless – it’ll just go wherever. It wants the opportunities,” Mr. McDerment said. “I don’t see why Toronto can’t beat Silicon Valley.”
All of this is important because the medium-sized companies of today will hopefully become the large-sized companies of tomorrow. And that’s what you need to build a thriving startup hub. You need big successes. You need those companies going public and generating wealth for their employees and communities.
Thankfully, that seems to be where we’re headed. The first company on the list above – Shopify – is already preparing for a dual US-Canada IPO.