Why U.S. Money is Pouring into Canada
America’s proximity to neighboring Canada has always fostered partnerships between the two countries, with businesses easily forming long-term working relationships. This is especially true in the digital age, when professionals can stay in touch via videoconference and instant messaging. Even in-person meetings require only a short plane ride or road trip, making it especially attractive to businesses based near the border.
But proximity isn’t the only reason American companies invest in Canadian companies. Businesses around the world see value in the enterprising ideas coming out of the “Great White North”.
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One of the most recent examples of this recognition of innovation was Bain Capital’s decision to purchase a majority stake in Canada Goose. Based in Toronto since 1957, the company manufactures outerwear designed to provide warmth in extremely cold temperatures. The company’s coats have become so popular, the company has been forced to spend the last few years battling counterfeiters and, as a result, have begun to sew holograms into its clothing to certify authenticity.
Canada Goose is one of many companies that have attracted American attention over the years. Tim Hortons, Seagram, and digital printing software company Creo are all high-profile examples. Each of these investments was a win for both the Canadian and American economies, helping the investors, the businesses, and the surrounding economies impacted by the boost in funds.
Technology-driven companies are especially attractive to investors seeking innovative concepts that have big potential. Vancouver-based Trulioo is an example of such a company. Specializing in cyber identity verification, Trulioo’s solution is widely sought by companies around the globe as a way to authenticate users in real time. The company is the pioneer and leader in social verification and is disrupting how individuals are verified online.
Two major investment firms recently cemented Trulioo’s future by pouring $6 million in US funds into the Canadian company. Tenfore Capital, based in New York City, and Blumberg Capital in San Francisco funded the investment, which will help Trulioo move to the next level. Venture capitalist David Blumberg, one of the managing partners of Blumberg Capital, is one of many investors seeing promise in Vancouver after the phenomenal success of his portfolio company, Vancouver-based HootSuite.
“Vancouver is a growing tech hub with great entrepreneurs and investment opportunity with supportive government,” Blumberg said.
In addition to the fact that Vancouver is being labeled “Silicon Valley North,” there are other incentives for American investors to turn their collective attention to Canada. Several government grants are available to facilitate investments in area businesses, including the Industrial Research Assistance Program (IRAP), which helps connect Canadian businesses and investors across international borders. American investors can also benefit from the Scientific Research and Experimental Development Tax Incentive Program, which encourage Canadian businesses to conduct research that leads to global innovations.
This spirit of innovation shines through in everything Canadian businesses do and the advantages to staying in their home country are not lost on the business savvy entrepreneurs. “Now is the best time to be a Canadian entrepreneur”, says Stephen Ufford, CEO of Trulioo, “with significant provincial and federal support, it is no wonder international investors are flocking to find the next big thing in Canada.”