Going global: Is Canada a better target than the US?

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Startups with large ambitions invariably take into consideration increasing out of their house market. As the most important economic system on the earth, the US is an apparent goal, however more and more, many corporations want to Canada for his or her North American base.

What are the advantages of selecting Canada over the US? What are a few of the frequent obstacles for increasing corporations in each international locations? How does the funding image differ on the opposite facet of the pond?

We put these inquiries to our panel of specialists on the newest version of Sifted Talks. Our friends included:

Neeraj Gupta, cofounder of authorized coaching platform Lawcubator, an Indian startup which has opened an workplace in Calgary.
Rick Christiaanse, chief government of Make investments Alberta, an organisation which helps join startups to funding within the Canadian province.
Jenny von Podewils, cofounder and co-CEO of the individuals enablement platform Leapsome, a Berlin-based startup which opened a New York workplace in 2022.
Saroosh Gull, CEO of Eventcombo, an occasions asset administration firm that relocated from the US to Calgary earlier this 12 months.

Watch this Sifted Talks right here or examine what we learnt:

1/ Canada is more and more common with increasing startups

The dialog began with a have a look at the advantages of Canada in comparison with the US. Christiaanse defined that Canada’s versatile immigration insurance policies, free-trade offers with markets throughout the globe and restricted forms make the nation a pretty proposition.

Gull added that decrease actual property prices, entry to expertise and worker retention (due to high quality of life) additionally makes the nation common with startups. Additionally, as a smaller market than mature tech hubs reminiscent of New York or San Francisco, it is good for scaling corporations that want to acquire consideration throughout the native ecosystem.

The primary drivers are round entry to expertise, entry to markets, and getting issues executed rapidly. That enables us to carry an increasing number of individuals into the market and drive success” — Rick Christiaanse, Make investments Alberta.

2/ Think about if you should alter your go-to-market technique earlier than increasing

Nevertheless, the maturity of the US nonetheless attracts many European startups. For instance, von Podewils stated Leapsome wished to be in New York reasonably than Canada or San Francisco because it signalled to buyers the corporate may thrive in a top-tier tech hub.

She stated that corporations ought to contemplate if they should localise their product or alter their go-to-market technique earlier than increasing. In some circumstances, corporations can entry these markets with out having to open new places.

We had been seeking to faucet into a really specialised and mature SaaS expertise pool. New York Metropolis, simply given its software program startups and scale up historical past, has that specialised and mature market” — Jenny von Podewils, Leapsome

3/ Authorized and accounting help is essential

Von Podewils highlighted the hidden prices that include growth. Seven members of her workforce relocated to the New York workplace to assist clean the transition, delivering coaching and instilling firm tradition. Whereas she stated this was a hit, there have been many hidden prices related to discovering workplace area, housing employees and easy administrative processes reminiscent of buying social safety numbers.

Gull identified these prices are frequent in any growth, not simply the US or Canadian markets. However Christaanse added that European corporations normally modify higher to Canada, as it’s extra culturally and legally much like the UK than the US.

The panel agreed that an important help to hunt for relocating corporations is authorized and monetary help, as getting these processes incorrect can have severe penalties.

Once you’re shifting, all of the challenges that come up in Alberta come up in New York. All of the challenges come up in New York, come up in Munich, and in Paris” — Saroosh Gull, Eventcombo

4/ Canada is actively attracting world expertise

All through the dialog, our panellists highlighted the significance of expertise in choosing the proper location for growth.

Christiaanse stated the Alberta authorities is aggressive in making an attempt to foster innovation within the province, particularly focussing on sectors reminiscent of agriculture, cleantech, fintech and aviation. Because the native authorities constantly runs in a surplus, it is ready to spend money on these sectors, and is actively attracting expertise to service these industries.

It is a province that is made up of immigrants. And that creates an entire completely different ambiance. I moved right here a few years in the past for this position, and folks simply welcome you and wish you to succeed” — Christaanse

5/ North America’s different VC group presents development alternatives

How does the funding image in North America differ from Europe? Many corporations based mostly within the EU, von Podelis identified, have garnered funding from VC throughout the pond. She shared that Leapsome has used the experience of their main investor of their $60m Collection A spherical to assist with their go-to-market technique within the area.

Gupta gave a succinct overview of the market. He stated that Canada has a bevy of household places of work which are lively within the pre-Collection A market, whereas many corporations then look to the US to entry bigger scale funding of their Collection B and C rounds. He additionally famous that Canada presents non-dilutive capital to revolutionary corporations, by means of its Strategic Modern Fund. Gupta’s earlier firm, Attabotics was given $35m of funding through the Covid pandemic.