Something special is happening in the Toronto-Waterloo area

boris August 13th, 2013

It has not been a great couple of weeks for the Toronto-Waterloo area as BlackBerry, the big anchor tech company of that region, is struggling with its turn-around and just put itself up for sale. But where a giant tech company struggles, one of the most exciting startup ecosystem in North-America has emerged over the past 5 years: 500px, Achievers, Desire to Learn, FreshBooks, Kik, Thalmic Labs, Top Hat, Tulip Retail, Upverter, Vidyard, Wattpad, and Well.ca are just some of the thriving start-ups in that area.

Three years ago, I didn’t have a single investment in Toronto. Today, I have four: Top Hat, Upverter, Wattpad and one yet-to-be-announced. In fact, Toronto is now the most important geographical market for version one ventures.

Top tier U.S. funds are beginning to take notice of this area now too. Whenever I talk to NYC- or Valley-based investors these days, they all want to discuss what’s happening in Toronto and most have made investments in a Toronto or Waterloo startup.

What’s driving all these activity in the area? It’s people. The Toronto-Waterloo cluster has an incredible talent pool. First, the University of Waterloo (ranked among the top 50 engineering schools worldwide) has been churning out talented engineers that have been highly prized in Silicon Valley and other tech hotbeds. The University is well known for embracing innovation, featuring cutting edge research in quantum physics and nanotechnology.

In addition to top notch engineers, the area has a great number of high tech senior marketing and sales professionals that can be recruited from larger tech players in the area like BlackBerry, Eloqua, and Kobo among others. The continued downsizing at BlackBerry has released a lot of talent into the local tech community.

It’s an exciting time to be participating in the area, whether as a startup or investor. Tech hubs like New York and Los Angeles may be getting most of the media coverage as alternatives to the Valley, but attention is starting to move northward. This is the time for Toronto startups.

Canada’s Growing Tech Startup Hub In Kitchener-Waterloo To Be Profiled In New Documentary (techcrunch.com)
Jack Dorsey to speak in Waterloo and Toronto on September 19th (betakit.com)
Waterloo’s tech industry moving on despite BlackBerry upheaval (theglobeandmail.com)

37 responses to “Something special is happening in the Toronto-Waterloo area”

TheSmileCeo says:

August 13, 2013 at 11:26 am

I can say very honestly after living in the valley for 8 years, we would be hard pressed to get access to the support, financing and mentorship anywhere else, that we have received since returning to the KW region and becoming part of the Communitech ecosystem and now Hyperdrive and Accelerator programs.
bwertz says:

August 13, 2013 at 12:19 pm

Agreed – Communitech is doing an awesome job!
Jevon says:

August 13, 2013 at 12:43 pm

It’s amazing. If it wasn’t such a pain in the butt to drive between the two places it would be even better.

HYPERLOOP
Amit Bhaskar says:

August 13, 2013 at 12:45 pm

Waterloo has been promoted as THE IT HUB on the east coast for a couple of years now and it seems that now it has started to pay off. Also looking at the fact that it has access to Waterloo region and Toronto with Ottawa not being far off, does it mean that a company has access to more markets than Vancouver.

Toronto is said to be the financial capital of Canada and that might also be one of the reasons for starting up in Waterloo-Toronto region with access to top talent and so many accelerators.
Amit Bhaskar says:

August 13, 2013 at 12:46 pm

Very true, Jevon. How about having access to market in both east coast and west coast. That would be truly amazing.
bwertz says:

August 13, 2013 at 2:00 pm

It is not much different than driving between San Francisco and the Valley 🙂
Allen Lau says:

August 13, 2013 at 7:27 pm

I think it is important for us to treat Toronto and Kitchener-Waterloo as a single ecosystem. Collectively we have thousands of tech startups at various stages and TO+KW is becoming a very sizeable startup hub now.
bwertz says:

August 13, 2013 at 10:40 pm

agreed – not the current perception / feeling but something to aspire to
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed - AnuragP says:

August 14, 2013 at 3:23 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed - Accounting Computer Solutions | Accounting Computer Solutions says:

August 14, 2013 at 4:00 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed « says:

August 14, 2013 at 4:36 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed | Lord of the Net says:

August 14, 2013 at 4:47 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed | Ediary Blog says:

August 14, 2013 at 4:52 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
iPhoneNation.com: Apple News and Technology Insiders – Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed says:

August 14, 2013 at 5:06 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
IT Blog » Post Topic » Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed says:

August 14, 2013 at 6:56 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed | says:

August 14, 2013 at 7:06 am

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
Jevon says:

August 14, 2013 at 8:05 am

I disagree actually,. I find it far more painful and unpredictable.
Jevon says:

August 14, 2013 at 8:06 am

YES we need to meld the two.

Perhaps we can siphon MaRS’s funding and give it to communitech to set up shop in Toronto….

just sayin’
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed | Digital Gadget dan Selular says:

August 14, 2013 at 6:28 pm

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]
William Mougayar says:

August 17, 2013 at 7:05 am

Can I second that motion? ouch 🙂
William Mougayar says:

August 17, 2013 at 7:13 am

Jevon, I racked my brains on that one too, and recently talked to people directly involved in it. A Waterloo-Toronto high speed train will NOT happen in the next 10 years, maybe not even later.

1. KW is focused first on their own inter-city system. It was just recently funded.
2. Anything outside of KW will go through Pearson first. They see the airport as the missing link, not Toronto Union station. I realize that over time the Airport-to-Union will get faster.

So, that’s a reality check we have. I was going to write a long blog on it, but you’ve got the gist of it there. So, get in a car and drive 50 mins to KW from the airport, or 90 mins from downtown.
William Mougayar says:

August 17, 2013 at 7:14 am

Don’t get me started on the Toronto – KW conundrum.
If Toronto had what Waterloo has, and if Waterloo had what Toronto has, then….

But despite of that, I’m seeing the 2 communities coming together at the ROOT levels, way more and way better than at the top-down levels.
Jevon says:

August 17, 2013 at 7:16 am

I’d say 2 things:
– Who cares about reality? If we think things are right and needed then we should be a broken record as a community.

– I don’t actually hear a chorus coming from Kitchner/Waterloo asking for this (even though I think it would be a huge win)– so either they don’t really care about it or aren’t doing nearly a decent enough job getting it on the agenda…
William Mougayar says:

August 17, 2013 at 7:31 am

Good points.
a) who cares about reality? –> “reality” has the dollars to make it happen, that’s what I learned by being there 4 times in May alone. The powers at be don’t have that on their agenda, and it took years to get the current inter-city subway passed

b) I heard it from a couple of entrepreneurs, but more as a refrain than with conviction. Other reality is, that (hypothetical) train would pass through 2 or 3 jurisdictions, and no one in each of them is interested in fighting a battle of co-operation with the other side.

I’m with you about the need, and how wonderful it would be if…But this thing isn’t going to be driven by people like you or me who are pontificating about it, and aren’t even in that area. I could say Toronto needs this, but who cares if Waterloo says I don’t need it now. I’ve heard the other side where they say, it’s not a big deal, I can drive and be in Toronto in just over an hour, and at the airport in 50 minutes.

Maybe if Communitech took over Toronto, then we’re talking 🙂
Matt A. Myers says:

August 17, 2013 at 10:26 am

I see why I like you more and more – you’re not stuck in the status quo.
Matt A. Myers says:

August 17, 2013 at 10:30 am

I’m moving to Toronto in the early fall – in part because I see these changes too. Needing to be closer to investors, advisors, and other human resources like developers.

The atmosphere is really starting to solidify from just the dreams (and rallying) that existed before.
Matt A. Myers says:

August 17, 2013 at 10:34 am

I have future plans that would need a hyperloop built. Just need to get my startup off the ground first – it’s unrelated, though its success is relevant to the ability to move forward with the future plans.
Matt A. Myers says:

August 17, 2013 at 10:36 am

Do you think because it’s less competitive (more time available from less startups) and/or better quality support?
Matt A. Myers says:

August 17, 2013 at 10:38 am

There definitely seems to be a lot of money in Toronto, though they’re only recently seeming to to grasp the investment game / business models of online startups.
Allen Lau says:

August 17, 2013 at 8:08 pm

BTW, is Wattpad your first TO-KW investment? I think so but not 100% sure ….
bwertz says:

August 17, 2013 at 9:40 pm

Yes, it was – it all started with Wattpad 🙂
TheSmileCeo says:

August 18, 2013 at 1:01 pm

I have tendency to believe that few things in life are black or white, and this is no different. A unique mix of high quality ingredients, blended in a unique way that leads to a certain personality that happens to be working well. Not something that you can just replicate anywhere, the ingredients have to match the personality of the region and its people. Either way I’m glad we found where we fit and we’re prospering collectively because it 🙂
Matt A. Myers says:

August 18, 2013 at 3:01 pm

I wouldn’t think it to be easy to replicate. 🙂
Aanchal Dhir says:

August 19, 2013 at 3:46 pm

You are very right about the talent pool! The University of Waterloo ranked as the only Canadian University in the poll for the Top 25 Schools to churn out Entrepreneurs: http://info.crunchbase.com/2013/08/12/entrepreneurs-and-universities/.
Mark Evans says:

August 20, 2013 at 5:00 pm

Glad to see you’re excited. Both communities have come a long way in the past few years, although they need more time to mature and, of course, more capital to support and drive growth.
bwertz says:

August 20, 2013 at 8:37 pm

Fully agreed – still a long way to go but the current trajectory feels great
Thalmic Labs Gets Two Ex-BlackBerry Execs (Including One Who Just Left) To Help The MYO Armband Succeed | BaciNews says:

December 27, 2013 at 10:49 pm

[…] The new hires and rapid growth of the Thalmic team, which is on track to surpass 50 employees by the end of the year, reflects the unintended bounty that could befall the Kitchener-Waterloo region as BlackBerry continues to struggle. It’s likely there will be a lot of talent injected into the market for the growing startup scene in the area to take advantage of, and that’s something investors are taking note of. […]

Something special is happening in the Toronto-Waterloo area

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