Vancouver plunges down list of top global startup ecosystems

Vancouver has dropped from No. 15 to No. 24 in a ranking of the world's top startup ecosystems | Shutterstock

What happened: Vancouver falls nine spots to land outside the top 20 list of top global startup ecosystems

Why it matters: The city is losing ground to emerging ecosystems while levels of funding available to local startups remain ‘static’

Much like the value of Bitcoin since 2017, Vancouver’s ranking as a top ecosystem for technology startups has taken a deep dive the past two years.

A May 9 report from Startup Genome reveals the city has tumbled nine places to land at No. 24 among startup ecosystems across the globe.

But the Global Startup Ecosystem Report 2019 did have high praise for the city’s blockchain ecosystem, highlighting it as a city to watch in terms of development for this technology.

The report made particular mention of the Vanbex Group Inc. completing Canada’s largest initial coin offering by raising $33 million with a $65 million market capitalization.

Vanbex, however, has been at the centre of fraud allegations this year.

A civil forfeiture claim was granted in March to seize the assets of Vanbex CEO Kevin Hobbs and founder Lisa Cheng, including a Vancouver property listed at $7.9 million, two Land Rovers and multiple bank accounts.

Update (May 9, 2019 — 12:42 p.m.):

In response to an inquiry from Business in Vancouver Startup Genome president and chief policy officer Dane Stangler said most of the research for the ecosystem profiles was conducted in December and January.

“In this case, it appears that much of the news about Vanbex broke in late March and early April (as best I can tell). We were not aware of this, nor were we made aware of it by anyone,” he said in an email.

“If we had known, we would not have included it. We will take appropriate steps to remedy this.”

Hobbs stated in a tweet the day the report was released that "it’s a FACT we are innocent and our company builds some of the best tech blockchain has to offer."

As for Vancouver’s displacement as a top 15 startup ecosystem — one that was previously the highest-ranked in Canada — the report stresses two main reasons.

The first is the ascendency of newcomers to the list: Washington, D.C., San Diego, Denver-Boulder and Lausanne-Bern-Geneva.

Consideration for the life sciences sector was added to this year’s rankings and three of those regions making their debut have life sciences ecosystems that rank among the top 20 in the world.

Vancouver’s life science ecosystem placed outside the top 20.

“Second, compared to other top ecosystems, their [Vancouver’s] levels of funding are static,” the stated.

But it also highlighted the fact Vancouver “stands out for having current startup

founders with a lot of past scaleup experience and adoption of best practices for startup success (like having advisors with equity).”

The report ranked Vancouver’s performance in team experience as being “on par with Silicon Valley.”

The report also pointed to Vancouver’s emerging cleantech ecosystem, noting the city is home to 25% of all the country’s clean tech companies (220) employing 3,500 workers.

Toronto also managed to overtake Vancouver on the list, jumping from No. 16 in 2017 to No. 13 this year.

Silicon Valley, New York City, London, Beijing and Boston rounded out the top 5.

While Vancouver saw its status plummet as a global ecosystem, it has been improving domestically by some accounts.

Last year the BC Tech Association and KPMG released a report card on B.C.’s ecosystem, bumping it from a ‘B’ grade to an ‘A’ grade compared with other provinces since the previous report card was issued in 2016.


—With a file from Albert Van Santvoort