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Toronto has one of the largest startup ecosystems in Canada and North America with some of the world’s most well-known startups located here. Shopify, Wattapad, FreshBooks, WealthSimple, Clearco, and Cohere, among countless others, all started their journey in Toronto.

Canada’s Unicorn Explosion

In the past few years, Canada’s technology sector has experienced a remarkable rise in the number of startups reaching unicorn status, with valuations surpassing $1 billion. Canada now proudly features more than 20 enterprises that have crossed this milestone, a symbol of the evolution and maturity of Canada’s startup ecosystem. 

Of course, this wouldn’t have been possible without government backing, a significant infusion of international investments, increased engagement from corporate ventures, and a thriving community of early-stage Canadian investors. 

In this blog, we’ll dive into the world of Toronto’s unicorn companies, tracing their unique paths to success and highlighting some of the city’s most notable exits!

Toronto’s Unicorns and How They Got There:

Toronto has many unicorns to its name. Let’s explore some of these success stories:

  1. Wealthsimple:
Wealthsimple logo and phone

Wealthsimple, founded in 2014, revolutionized the Canadian financial services industry with its accessible, simple online investing and financial management platform. Its commitment to making investing easy for everyone, regardless of wealth or financial knowledge, quickly attracted a broad audience. 
In May 2021, Wealthsimple achieved unicorn status following a $610 million CAD funding round, valuing the company at about $4 billion CAD.

2. Clearco (formerly Clearbanc):

Clearco logo

Clearco, launched in 2015 by Michele Romanow and Andrew D’Souza, aimed to disrupt traditional venture capital with its unique revenue-share model for funding entrepreneurs. By providing non-dilutive capital for digital ads in exchange for a percentage of revenue, Clearco offered a novel solution for startups looking to grow without giving up equity. 
In July 2021, the company proudly announced it had reached unicorn status after raising $215 million in new funding, valuing the company at almost 2 billion.

3. Ada:

Ada logo

Ada, a leading Canadian tech company known for its innovative customer service automation platform, achieved unicorn status in May 2021. This milestone was reached following a funding round that raised $130 million USD, valuing the company at $1.2 billion USD. Ada’s success in automating customer interactions through AI-driven chatbots transformed customer service models for companies worldwide.

4. Figment

Figment logo with computer screen showing the application

Figment, a Toronto-based blockchain infrastructure and services provider, has made a significant impact in the rapidly evolving world of decentralized technologies. Founded in 2018, Figment has positioned itself as a key player in the blockchain ecosystem, offering a comprehensive suite of services that include staking, node infrastructure, and developer tools designed to support the growth and adoption of blockchain networks.
In December 2021, after securing $110 million in Series C funding, the company achieved a valuation of $1.4 billion, officially earning its unicorn status.

5. 1Password:

1password logo

1Password, emerged as a pivotal force in the cybersecurity realm, offering a sophisticated solution to manage passwords and secure online information. Since its inception in 2005, 1Password has grown from a simple idea to enhance online security into a global leader in password management. 
By consistently introducing features that address the evolving challenges of digital security, 1Password has stayed ahead in the competitive tech landscape. This dedication culminated in a landmark achievement in July 2021, when 1Password secured $100 million in a funding round led by Accel, propelling its valuation to $2 billion and marking its ascension to unicorn status.

Exit Strategies: Mega Acquisitions and IPOs

In the world of startups, achieving unicorn status is huge, but the journey doesn’t end there. Strategic exit strategies, like mega acquisitions and Initial Public Offerings (IPOs), often define the next phase of a company’s evolution. These pivotal moments tend to secure a startup’s legacy. Let’s delve into some of Toronto’s most notable exits:

  1. Wave Financial:
Founders of Wave Financial sitting on a couch

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One of Toronto’s biggest success stories is Wave Financial, a leading financial planning platform for small business owners, which was acquired by H&R Block, a global tax preparation company, for $537 million CAD. Announced in June of 2019, this acquisition aligned with H&R Block’s strategic goals to expand into new growth areas and the small business market, enhancing its offerings with Wave’s suite of accounting, invoicing, payroll, and payment solutions. 

Wave Financial, founded in 2009 in Toronto’s Leslieville neighbourhood, had grown substantially, serving over four million customers globally. The company, which had previously raised around $77 million USD through various funding rounds, made notable acquisitions and launched features to expand its service offerings.

2. Wattpad:

Wattpad logo in front of a wall of books

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Originating as a unique platform for readers and writers to publish, share, and interact with stories across various genres, Wattpad was founded in 2006. Its innovative approach to storytelling quickly garnered a massive global community.

In 2021, the company was acquired by Naver, the South Korean internet conglomerate and parent company of the digital comics platform Webtoon, in a deal worth over $600 million.

This cash and stock transaction combined Wattpad’s vast user base of over 90 million, including 5 million writers, with Webtoon’s 72 million monthly active users, enhancing its global storytelling reach. Wattpad had already seen around 1,500 of its stories published or adapted for TV and film at the time, and the acquisition opened up access to Naver-owned digital and entertainment platforms. 

Under the agreement, Wattpad continued to operate from Toronto, led by its co-founders CEO Allen Lau and Chief Strategy Officer Ivan Yuen.

3. Ecobee:

Ecobee thermostat

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Although not a unicorn yet (but certainly on it’s way there) Ecobee, known for its smart thermostats and headquartered in Toronto, was acquired by Generac Holdings in 2021. The deal was valued at approximately $770 million USD and made Ecobee a subsidiary of the generator giant. 

Ecobee was established in 2007, and has grown beyond thermostats to include a voice-controlled home security camera system. Despite the competitive smart thermostat market, with rivals like Google’s Nest and Amazon, Ecobee was able to maintain its edge through compatibility with various smart home platforms. 

This move also marked Generac’s expansion into residential energy technology, aiming to integrate Ecobee’s technologies with its energy solutions to enhance home energy efficiency and support grid operators.

Toronto’s Future as a Startup Hub

Toronto’s ascent as a startup hub is no accident. The city thrives on a dynamic ecosystem underpinned by a solid economy, governmental support, a wide variety of industries, and a comprehensive network of accelerators, incubators, and coworking spaces designed to nurture startups. This environment, coupled with Toronto’s reputation as one of the world’s most livable and diverse cities, draws talent from across the globe, enhancing its competitive edge. Moreover, its success in securing investments and a dedicated focus on cultivating tech talent solidify Toronto’s position as a pivotal force in the international startup arena.

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