$2.8 billion was invested in local startups during 2021, more than the previous 10 years combined

More than $2.8 billion was invested in local startups during 2021, more than the previous 10 years combined, said Chris Albinson, chief executive officer at Communitech.

“That is up 200 per cent year-over-year,” said Albinson. “It’s an exponential curve, I like exponential curves, they are fun.”

The are more than 26,000 tech workers in the region, which is also the western node of the Toronto Waterloo Corridor — the fastest growing innovation hub in world, said Albinson.

The corridor is growing about four times faster than Silicon Valley.

These employment and investment numbers put Communitech years ahead of its 2025 targets of 24,000 tech workers and $1 billion in investment annually.

After consulting with 1,100 founders across Canada, Albinson and his team have developed new objectives and a four-part strategy for doubling the size of the region’s tech workforce to 55,000 by 2030.

By then Communitech also aims to have 14 companies earning at least $1 billion a year in revenues, and venture capitalists investing at least $1 billion annually in startups and rapidly-growing companies here.

Communitech’s new strategy is based on big data, talent attraction, expanding markets and creating a new venture capital fund.

First, Communitech will wrap itself in the thickest layer of data it can build, putting all technical, human and financial resources of the sector in a single place. That will make possible faster connections among institutions and companies looking to solve technical challenges, and find the right tech firms for the job.

Albinson points to Grand River Hospital, which needed new training programs for nurses, and Axonify, which develops mobile learning tools. It allowed nurses to keep working during the pandemic and avoid taking time off the wards for new training.

Talent attraction is the next part of the plan, and Communitech Outposts now enables member companies to hire, pay and manage international employees working from 160 different countries. It reduces the time and costs of international hires.

“The talent war is global,” said Albinson.

Integrated markets is the third focus — locally developed tech should be quickly deployed in other markets across Canada. Albinson said the tech Axonify developed for Grand River is now used in Calgary and other Canadian cities.

“Now that is spreading across the country, that’s how integrated markets work,” said Albinson.

More work needs to be done to open additional markets across the country.

“Canada is the only country in the world that does not buy its own stuff,” said Albinson.

The fourth part the growth strategy is a venture capital fund to channel investments into Canadian tech companies. Albinson is working on that fund now, and said it’s important for the future control of Canadian tech.

Of the record-setting $2.8 billion invested in local startups during 2021, 81 per cent came from the U.S. That gives Americans a lot of influence with board positions and senior leadership, said Albinson.

The renewed focus on big data at Communitech is happening as the Data Hub, now at 14 Erb St. West in Waterloo, is moving into the Tannery at 151 Charles St. West in Kitchener. In the past five years it has become essential to Communitech’s plans for growing the tech sector.

Kevin Tuer, Communitech’s vice-president for Data and Advanced Technologies, said more than 50 startups went through the Data Hub since it opened in 2017, creating more than 400 jobs and attracting millions in investment.

“It was very impactful,” said Tuer. “I think we are just getting started.”

Tuer put together Canada’s Open Data Exchange, which includes data sets from local, regional, provincial and national governments.

The data was used by startups working on 5G networks, AI, Cloud computing and autonomous vehicles. Big data is a key element of artificial intelligence, which is becoming an important driver of the economy, said Tuer.

The Data Hub is where Martin Basiri and his brothers first started working on ApplyBoard, the fast-growing startup that helps international students quickly secure places at colleges and universities in North America, the U.K and Australia. ApplyBoard had $400 million of the $2.8 billion invested last year in local startups.

From The Record

How downtown Hamilton is poised for a big 2022

Like many other places across the country, local businesses in Hamilton have taken some of the hardest hits from pandemic closures and restrictions. One side effect of this is that the downtowns that were once vibrant and attractive destinations have diminished in importance when it comes to our housing decisions.

However, with the end of the pandemic on the horizon, many are now taking a more serious look at the role these businesses will play in local economic recovery as well as attracting new residents.

We spoke to Sandy MacKay, a top local realtor from the Hamilton area, about the role local businesses play in real estate in the city and why investors should pay attention.

Hamilton has seen a lot of interest in recent years both from migrants out of the GTA and those from smaller towns looking to move urban. According to MacKay, Hamilton has a lot to offer its new residents, including “affordability and a lower cost of living, yet still within reach of all the GTA has to offer. Hamilton is the closest city to Toronto, which is not part of the GTA, so it’s very attractive to those who want to live a city life, at an affordable cost.”

The challenge now for the city is to offer the same attractive amenities that have made the GTA region so appealing. Though Toronto is a city known for it’s good eats and variety of dining establishments, MacKay highlights how Hamilton has a burgeoning hospitality industry of its own.

In particular, Mackay cites the downtown area of the city both for its businesses and for its real estate opportunities. The area is the heart of local business in the city with a wide selection of businesses to explore. This also has the effect of making it a hot spot for real estate as inhabitants come to live and work in the surrounding neighbourhoods.

“Hamilton has become a hot spot for restaurant owners and chefs in recent times,” said MacKay. “The cost of running a business like this in Hamilton is far less than in Toronto, largely due to the lower cost of space. With the pandemic hitting, and restaurants changing their business models, this has only increased the movement of business out of the GTA and into cities like Hamilton.”

There is also a wide variety of available properties in the area.

“There are plenty of mixed-use and live-work opportunities in these areas,” said MacKay. “Opportunities also exist to convert some commercial units into residential units, where the commercial units are no longer needed. Many of the side streets just off the main streets could work well for this. There are also many multi-family residential units available around these locations, which are still great investments as well”

The hope is that as a local business is reinvigorated by easing restrictions, many more will be drawn to the area to live and work, allowing for businesses to grow and presenting a great opportunity for investors. For now, however, we should support our local businesses where we can as they work through the hard times.

“Hamilton has a thriving young entrepreneurial population. With a diverse economy and proximity to the GTA, there is opportunity in Hamilton for practically every type of career focussed individual.”

The city of Hamilton has already shown huge growth potential in recent years and a look at recent market statistics out of Hamilton proves this fact. In December of 2021, the average sale price for a home in Hamilton rose to $861,695, around a 30% increase from December of 2020. Detached homes averaged at $924803, while semi-detached and apartment properties went for $761,318 and $605,958 respectively. High demand for homes in Hamilton has made housing supply drop in recent years and it currently sits at its lowest level on record.

In terms of affordability, the city is still doing much better than nearby cities in the GTA. For comparison, detached homes in the GTA averaged at over $1.5 million for the same period, with prices for residential properties costing almost 40% more on average than in Hamilton.

For investors looking at Hamilton as a potential spot to put down some money, MacKay says now is as good a time as any.

“Waiting for prices to go down or cash flow to increase is simply not realistic and you most likely will be disappointed in that approach,” says MacKay. “In Q1 we should see more price increases and activity. More and more migration from the GTA into Hamilton should also increase rental and housing demand. We are projecting another strong Q1 and spring market for practically all types of Hamilton real estate.”


From Canadian Real Estate Wealth Magazine