As we approach the end of a very turbulent year, we can take some time to assess the state of the Greater Toronto Area (GTA) tech market. We’ve all had to battle the challenges that come with a global pandemic and efforts to contain it. This has negatively affected many people and, of course, businesses.
Even in the midst of all of these hurdles, the GTA tech market is surviving. In fact, according to Hockeystick, VC funding reached $665 million at the end of October. We can see that while we are still very much dealing with COVID-19 and its effects, there is still healthy growth in this market, which means that there is opportunity here for success.
In order to formulate a strategy to give your tech company a route to this success, you must first understand the way the industry is shifting. Here’s what you need to know about the GTA tech market right now.
Toronto is growing in more than just the tech world. Because of the region’s reputation and appeal, more and more people are moving here. As the population grows, so too does the economy. Many industries are on the rise here, but tech is chief among them.
Why is this? One factor is the education system here. The GTA is home to several public colleges and universities with an emphasis on both technology and business programs. These universities also have generous intellectual property policies, meaning that companies started by students graduate with them. Remote learning has allowed these opportunities to continue at a safe distance.
Near-shoring also plays a part in this phenomenon. Many companies like Uber, Intel, LG, Amazon, and Microsoft are either moving to Toronto or are investing here. Their presence only boosts the reputation of the region and makes it a more attractive place to do business. This is especially true as US companies look for a new strategy while dealing with COVID. Many have looked to expand and grow outside of the US in an effort to bolster their performance.
On the start-up side, the GTA is home to over 5,000 of these growing businesses. Over the past decade, it has become the second-largest tech hotspot in all of North America.
Venture Capital Investment
VC funding is incredibly high in Toronto and is continuing to grow. One report found that the tech industry raised $3.1 billion in funding last year. This is about a 68% increase from 2018. The region also experienced over 300 investment rounds, 54% of which were seed rounds.
In the last quarter of 2019, investment in the life sciences industry was noteworthy. VCs invested $302 million in this field and have made comparable investments in Q1 of 2020.
FinTech, however, seems to be the catalyst behind much of the growth in Toronto. From Q1-Q3 of 2019, we saw $776 million invested across 31 rounds in this industry.
Whatever branch of tech you work in, it is likely seeing a rise in VC funding, which means more entrants into the industry and increased competition. As we can see from that $665 million reported by Hockeystick, people are investing in technology even in the midst of COVID. While this is helpful for innovation, it also poses a challenge.
The Labor Market
Toronto has an incredible pool of talented, qualified candidates due to the aforementioned university system and its immigration policies. It’s even considered one of the top markets for tech talent in all of North America.
However, given the recent challenges we’re all facing, now is as important a time as ever to consider if you have your best team lined up to succeed in a challenging market. Companies are still hiring and continuing to grow, but for those that aren’t, or who have recently let go of staff, there are now far more candidates on the market looking for opportunities. This creates more noise in the job applicant pool for employers and makes it harder for qualified candidates to stand out. This means that unless your company is prepared with an efficient hiring process, you could lose out on the top talent that is still scarce and valuable. This is incredibly important in an industry with so many competitors at play.
Michael Page can help you to not only acquire top talent in the market but also access those candidates who are not actively seeking a new position. These are known as passive candidates. Through our vast networks and industry knowledge, we can help your business to make staffing decisions that will keep you on the right track as the market continues to grow and change.
To learn more about our services, please feel free to reach out to our team of expert consultants today. You can also explore more of our industry insights in our Michael Page advice section.