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Global startup empires are growing close to homeHow Toronto entrepreneurs learned to stop worrying and love the city's startup ecosystem

Toronto sits on the cusp of producing its first generation of tech startup giants, but it wasn't always like this. For years, the city's startups would move to the US or sell early once they gained traction. But now, things are changing.

Companies like FreshBooks, Shopify, ScribbleLive and Wattpad, Desire2Learn and 500px, and promising newcomers like Bionym make headlines around the world. More startups than ever choose to build global empires from home, their HQs firmly planted in the city's streets.

“The past couple of years has seen a burst of activity -- startups demonstrating significant traction and the average person would perhaps just assume they are valley companies and not realize that they are in Toronto,” says Bionym CEO Karl Martin. “The most valuable aspect of this ecosystem is that the more it grows, the more it can breed further success. New startups need references to see what works and what doesn't.” Having a network of experienced entrepreneurs working within the same community provides those points of reference.

Bionym is a promising young company that’s making big waves in the wearable technology space globally, as it tackles a massive challenge of identity authentication and management through heartbeat.

“Our strategy is to build Bionym into a significant business, and not seek an early exit,” says Martin. “The early strategy decisions were essentially a "go big, or go home" kind of play. As we've grown from two to 20, and then to 40, we've never seen a reason why we shouldn't be headquartered in Toronto. We expect to always keep our core team here.”

The vision of going global while staying local just doesn’t sound odd anymore, with companies like FreshBooks, Wattpad and D2L going global and going strong.

FreshBooks on Explosive Growth from TO

FreshBooks founder Mike McDerment has repeatedly turned down offers to sell his online cloud accounting software startup over the years; in an open letter, announcing the company's recent funding gain of $30 million, he put a proud emphasis on Toronto as his hometown. FreshBooks now plans to grow from 150 to 450 employees by 2016 and keep everyone under one roof in a new office space in High Park area.

“I can’t overstate the importance of having big stand-alone tech companies here [. . .] They acquire other startups, employ lots of people and create a virtuous cycle in our ecosystem,” Mark MacLeod, FreshBooks CFO wrote recently in his post aptly named “The Coming Canadian Tech Renaissance.”

So, what accounts for this so-called renaissance? According to MacLeod, there are a number of factors: the new startup visa, recent changes in taxation related to foreign investment as per Section 116, and access to the strong talent pool coming out of local colleges and universities. There's also, now, a precedent. 

“Now you have more people here who have been through the startup cycle, and so we are growing a more experienced talent base in the city,” MacLeod said. “When I started, many enterprise software companies wanted to be where the customers were, but now in terms of doing business, access to talent and capital, borders effectively don’t matter anymore.”

Toronto’s startup ecosystem owes much of its strength to FreshBooks virtually sponsoring most every major startup event and conference over the years, unwavering in its support of the community. With its legendary company culture – pancakes at the office and #Freshoween14, anyone? – FreshBooks continues to inspire other startups and founders as it expands globally and keeps everyone under one Toronto roof, for now.

Social Storytelling Knows No Boundaries: Wattpad Story

Toronto-based Wattpad, once a humble mobile app that allowed people to write stories, evolved into a global community of writers and readers. The ambition to grow Wattpad into a billion-user company from Toronto is part of the company’s DNA.

“You couldn’t find a more wonderful place to build a tech startup, despite the Polar Vortex and all the snow,” says Melissa Shapiro, Head of Global Marketing at Wattpad.

Shapiro explains that everyone struggles to attract top talent. Because Toronto is smaller and less competitive than, say, California, that challenge is a little bit easier.  

With over $70 million in funding, a TV series based on Wattpad stories and its breakout success, the company shows no signs of resting on its laurels. 

Shapiro feels truly optimistic about the state of tech in Toronto. “I got here about 18 months ago from California, and in that time I’ve seen the size, scope and scale of Toronto startups grow." She adds that events like HoHoTo and Toronto Maker Faire, help promote a sense of an active and thriving community.

It takes the right kind of city to produce and sustain a company the scale of Wattpad. It also takes a city that is open to trying things out: Wattpad is disrupting traditional publishing models with its brand of social and digital storytelling, from a beautiful and bright space just steps away from the iconic Flatiron building. And the investment is paying off on a global scale.

eLearn All The Things

Desire2Learn (D2L) is a Kitchener-based eLearning software company taking over the world one student at a time.

“We have 15 million students using the platform now, and we’re hoping to grow the user base to over hundred million, to have a lasting impact on learning for schools, universities, and companies all over the world,” said John Baker, president and CEO of D2L.

D2L employs over 800 people, and plans to add 100 more to the team shortly. Its Toronto office celebrated a two-year
anniversary by hiring top-tier developers and throwing a party. They have every reason to celebrate. With $165 million in funding, D2L is a true stealth giant.

“We are building a big company here, and that takes time,” Baker says. 

Learning is central to the company’s culture. Go to any tech conference worth its salt, and you’re almost guaranteed to run into someone from D2L. Their success helps build much-needed bridges between Toronto and Kitchener-Waterloo startup and tech communities. D2L made headlines recently when the company hired former premier McGuinty as a lobbyist. The little guy eLearning company had "made it," for all to see. 

Toronto the Startup City

While many Canadians are still relocating south for professional opportunities, many others are returning home. Events like Toronto Homecoming, aimed at bringing top talent back home, have made the transition more appealing. Then there are events like the recent Startup Open House, which invited startups across the city to open their doors to anyone curious to see what working at a startup might look like. 

For Bionym and other startups in the city, geographic location is quickly becoming irrelevant, when it comes to accessing customers and talent. Martin of Bionym takes it a step further saying that in Toronto, we have a world in one city. “Toronto, being such a diverse, global city, allows us to view our product through a global lens, rather than a narrower one, like that of Silicon Valley,” Martin says.

Toronto startups have got that empire state of mind, remaking Toronto the Hogtown into the Startup City, through hard work, coffee and code.
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