Why Waterloo Region Startups Move to Toronto, Move to the Valley, or Stay

In October I went to my first Techtoberfest, Communitech's festival at the Tannery. The first keynote was Vass Bednar of the SHIELD Institute, who told the room it was her first Techtoberfest too and that it won't be her last, which made me feel a lot better about being new. Partway through, she talked about companies leaving Canada.

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I do understand why it happens. The rounds can be bigger there. The customers are bigger there. And sometimes the honest answer to why did you move is because nobody here was writing the check.

The next afternoon, Devon Galloway of Garage Capital opened the founder pitches by saying he and his partners had spent "tons of time in the Valley, tons of time abroad", and still picked here.

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And we chose to build here for the long term because of a real deep belief in both the incredible talent this region has to offer, but also the support that this region, I think, just does an incredible, incredible job for.

I left wondering which of those two stories I'd hear more often if I went looking. So I picked 30 well known companies that started here and read what their founders said in interviews and posts, and what reporters wrote, about where they ended up and why.

14stayed in Waterloo Region
6split between here and somewhere else
7moved to the Bay Area
3moved to Toronto

Thirty companies I picked myself is a small sample, so for a more complete view I went through Velocity's company pages. It has a page for 629 of its companies, and 256 of them say where the company is today.

Waterloo Region159
Toronto area62
Elsewhere outside the US18
Bay Area12
Elsewhere in the US5

Some of those pages haven't been updated in a while, but the picture is pretty clear. Most stay, Toronto is the most common place to go, and the Bay Area is a long way behind it.

Why most of them stayed

When founders talked about why they stayed, the answer that came up most was the people around them.

The people and other founders around them7
Co-op students and young engineers4
Customers close by3
The university3

A company can give more than one reason. Matt Rendall of Clearpath Robotics grew up in Toronto, and he put it better than I could in an interview with Waterloo EDC.

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The pond is big enough that you can achieve scale here, but small enough that you can navigate and network and interact with basically anybody inside of the community.

John Baker started D2L as a UW student in 1999, and UW gave him a co-op term off to work on it. D2L went 13 years without venture money, listed on the TSX in 2021, and still has its head office in Kitchener. What an amazing run!

Armen Bakirtzian of Intellijoint Surgical told Communitech they went to the US to learn from medical device mentors and brought it all home, "because it was our intention to stay in KW." The surgeons they work with are within an hour, so "we don't need to be in Toronto, we don't need to be in Hamilton, we don't need to be in London."

Kurtis McBride of Miovision couldn't find enough Canadian customers early on, so he started selling to the US from Kitchener instead of moving. "I stopped calling Canada and started calling the U.S., and we started to hit a ramp," he said. Miovision still builds everything in Kitchener.

Upside Robotics is one of my favourites in the whole list, because it did the opposite. Jana Tian and Sam Dugan launched in San Francisco in 2024, picked Waterloo as home, and spent a growing season living in an RV on Ontario corn farms testing their robots. Jana told Farmtario they came "because of the market, but also because of the talent", and she was very direct about the Bay Area.

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The Bay Area is really focused on software because it's so scalable, but it's less suited to robotics.

Upside raised a US$7.5 million seed round in February, and Garage Capital and Clearpath's founders were in it. I love that. Local money and local founders backing a company that chose to come here.

That pattern shows up a lot. Seven of the 14 that stayed make physical things, like robots, sensors, lab instruments and an electric flying boat. Software stays too, though. Harleen Kaur of Ground News pitched at Techtoberfest and said they've been building in KW for almost a decade, and that it's usually the number one app in the news and magazines category of the US App Store. From Kitchener!

Plenty of them came here from somewhere else

Staying doesn't have to mean growing up here. Martin Basiri came from Iran to study at UW, his brothers Meti and Massi followed him to Conestoga, and in 2015 the three started ApplyBoard. It's still in downtown Kitchener, and Martin has called the Region "a perfect place for creating a tech company."

Mallorie Brodie and Lauren Lake moved here in 2013 and started Bridgit a year later. Mallorie said of Communitech, "They make everything simple." TitanFile came all the way from Halifax in 2011 for the Accelerator Centre, "to be closer to the core of the Canadian innovation community."

Local money shows up a lot

Bednar's talk got me curious about who wrote the cheques. The Velocity Fund backed Ground News. Garage Capital has been in every round of Quo since its first. The Golden Triangle Angel Network co-led Nicoya's seed, and Archangel invested in Pontosense in 2024. At the pitches, Alex Cooper of UpScale Quantum thanked the Garage team and Golden Ventures for writing his first cheque, for a company built on research from his own UW lab.

The CVCA counted 32 venture deals in Kitchener and Waterloo in 2025, worth $111 million in all, and Waterloo on its own was fifth in Canada by number of deals.

Most of the Valley moves started with Y Combinator

Six of the seven that moved to the Bay Area went through YC first.

Eric Migicovsky built his first smartwatch in Waterloo at one of Velocity's earliest companies. When YC took Pebble in 2011, the team moved to Palo Alto, and in 2012 Pebble raised about US$10 million on Kickstarter, which was huge. He later told the Globe and Mail that in 2010 he couldn't raise serious money for hardware in Canada. Fun twist, in 2025 he started Core Devices to make Pebble watches again.

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In 2010 in Canada, there wasn't that faith, the sometimes blind faith, in start-ups that there can be down here.

Mahyar Raissi and Daryna Kulya built Quo, then called OpenPhone, at Velocity in 2017 and went to YC in 2018. Mahyar told BetaKit what kept them there.

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The decision to stay here came after we started raising money and met some of our early employees in the Bay Area.

Daryna has also said "We both feel strongly connected to the community in Waterloo." The newer ones went the same way. Rahul Gudise, Haokun Qin and Rishabh Sambare started Gale as UW students and did YC in 2025. Rahul said Velocity was "instrumental in helping us get to YC", and Haokun called going "kind of a no-brainer." Humza Ahmed built Automax.ai on Enterprise Co-op and at Velocity, did YC the same year, and runs it from San Francisco now, but he says "pretty much everyone I've hired so far has been from Waterloo."

2011
Pebble does YC and moves to Palo Alto
2011
Vidyard does YC and comes back to Kitchener
2016
Varden Labs, a self-driving shuttle from Velocity, does YC and stays in California, later as Embark
2018
OpenPhone, now Quo, does YC and stays in San Francisco
2019
Fuzzbuzz does YC and raises its next round from Bay Area funds
2025
Gale and Automax.ai do YC and stay in San Francisco
2026
Simantic and Liquid Energy are in YC this fall, and both list Waterloo

And then there's Vidyard, the one that came back. Michael Litt says Paul Graham told them going home would be "a 10-pound weight." They went home anyway, and Litt said why. "I was raised locally, this community is very important to me." By his telling, Graham later called it probably one of the best decisions they could have made. Litt and Galloway also run Garage Capital now, and they invest in companies here.

The three that moved to Toronto

Three of the 30 moved the whole company to Toronto. I couldn't find anything where their founders talk about why they moved.

Float started at Velocity in 2019 with Griffin Keglevich and Ruslan Nikolaev, who were doing a UW and Laurier double degree. It's in Toronto now, raised an $85 million round led by Inovia this year (with Garage Capital in it too), and says it serves more than 7,000 Canadian businesses.

Shiva Bhardwaj started what became Pitstop as a UW engineering student, went through ODX's first cohort in 2016, and later moved to Toronto. Fullbay bought it this March, so congrats to the Pitstop team!

TitanFile, the Halifax company that came here for the Accelerator Centre, moved on to Toronto by 2017.

The one founder in my list who talked about Toronto on the record was opening a second office, not moving. Mallorie Brodie told BetaKit why Bridgit opened there in 2019 while keeping its home in Waterloo.

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It was the easy choice given that a lot of our investors are there, our customers are there, and it's a really strong talent pool.

Is it cheaper to stay here?

Not by much compared with Toronto, it turns out. Job Bank puts median pay for software engineers at $56.77 an hour in Kitchener-Waterloo-Barrie and $56.49 in Toronto. CBRE worked out what a 500-person tech office costs a year, wages and space included.

SF Bay Area87
Toronto41.4
Waterloo Region39.7

So the Region and Toronto are close, and both are about half the Bay Area. Neither number counts what it costs to rent a place to live, and I didn't find a good number for that.

Lots of companies do both

Six of the 30 split the work between here and somewhere else. Brian NeSmith of Arctic Wolf has said his co-founder Kim Tremblay was in Waterloo, so "we made the decision early on to do all development in Canada." In 2020 it picked Eden Prairie, Minnesota, for its head office because "the bulk of our customer base is in the U.S.", and all of its research and development stayed in Waterloo.

Aryan Afrouzi and Alexander Stratmoen started Voltra as UW students at Velocity, raised from Contrary in San Francisco, and are hiring in Waterloo and Mountain View. Aryan's line made me laugh. "Waterloo is way more famous in San Francisco than it is here, for sure."

Avidbots, counted with the ones that stayed, builds its floor cleaning robots in Kitchener and sells from offices in Silicon Valley and Hong Kong.

Sales that kept the work here

When Rockwell bought Clearpath in 2023, Rendall said "we are planning to stay in K-W," and they did. Carol Leaman said Axonify's buyer agreed in the deal to keep its jobs here. When Fleet Complete bought BigRoad in 2017, its 45 people stayed in Waterloo. And after Aeryon Labs sold to FLIR, its core team started ENVGO and its electric flying boat right here.

I'd love to hear from you

If your company moved to Toronto or the Bay Area, or stayed, I'd love to hear the story behind it. Reply to The Weekly or use the contact page. And if you want to work at one of the companies that stayed, they're on the jobs page.

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