Techstars reportedly has an interest in establishing a Canadian chapter for its mentorship-driven startup accelerator program. Sources close to the organization said one of the leading candidates for a new chapter is Montreal.
Techstars co-CEO David Brown said that while the program doesn’t currently have anything to announce, they “hope to at some point in the near future.”
“Given that I was born and raised in Montreal, I would love nothing more than to have an accelerator in Montreal,” Brown told MTLinTECH. “We believe that Montreal is an amazing area for startups.”
Sources close to the program are pushing for a chapter to open in Montreal, and to make things better, investors in Montreal told MTLinTECH they’re supporting the idea.
“There are people within Techstars who really want to make it happen,” said a source. “Everyone is saying that an international high-level accelerator like that in Canada would create a positive effect.”
But there seems to be just as much potential for the Toronto-Waterloo corridor to be chosen as an expansion point. Brown acknowledged that “both Toronto and Montreal are excellent startup ecosystems that fully support entrepreneurship with access to both capital and mentors.”
In other words, precisely what the program has been known to look for in new markets.
The well-known accelerator program for startups was founded in Boulder, Colorado in 2006 by David Cohen, Brad Feld, David Brown, and Jared Polis. Today it holds 13-week programs in Boulder and nine other American cities, London, Tel Aviv, Cape Town and Berlin. It’s considered one of the best startup accelerators in the world next to Silicon Valley’s Y Combinator.
Fewer than one per cent of companies that apply to Techstars are accepted. The program has accelerated nearly 1,000 startups. The Techstars brand also owns the notable Startup Weekend, Startup Week, Startup Digest and Startup Next initiatives.
Sergio Escobar is the managing director of Founder Institute’s Montreal chapter. Escobar has been associated with Techstars since he helped cofound the Startup Next program, which was acquired by Techstars in June 2015.
He told MTLinTECH that he wasn’t aware of any Canadian intentions for Techstars. Still, he feels strongly that Canadian markets have “reached a readiness level.”
“I would love to see Techstars come to Montreal and it’s always looking to expand into new ecosystems. They just opened Australia, Israel and South Africa, so why not Canada?” Escobar told MTLinTECH.
“I think we have reached a readiness level to attract a big international program. Bottom-line, if we want to be the best, we have to bring the best of the best to Canada,” he added.
This isn’t the first time the subject has been discussed. In 2014 the Financial Post’s Quentin Casey reported that Techstars was exploring a potential expansion to Toronto or Waterloo, after CEO David Cohen was in Toronto on a speaking engagement. Nothing came of it though.
The conversation took off in Montreal recently when Escobar polled local Montreal entrepreneurs in a Facebook post, asking “Would you agree it’s time to have one of those top tier US accelerators, like Techstars or other, opening a program in #Canada?”
The majority reacted in favour of the idea. One of those who voted in favour was Chris Arsenault, managing partner at Montreal’s iNovia Capital venture firm. iNovia has previously invested in successful startups like AppDirect, Lightspeed, Luxury Retreats (acquired by Airbnb last week) and more.
“Would Montreal benefit from having a Techstars program? Absolutely,” said Arsenault.
“Techstars is slightly different from, let’s say, a Y Combinator. Techstars is more of an ecosystem enabler. They play a role within ecosystems and techhubs and I’m supportive of bringing it here to help solidify and build the ecosystem.”
Techstars would require a large amount of “pull” or buy-in from local investors, corporations and other tech institutions, according to Arsenault. In that sense, he sees players like Escobar as being “well, well positioned to make this happen if he could push for it.”
“I think the community should get behind him.”
A source close to Techstars argued that welcoming Techstars could give Canadian tech the boost it needs to compete with other countries.
“If we want to cultivate the best startups from all around he world, of course the first choice is going to be the place with the biggest network of mentors, investors and corporate partners. If we want to empower Canada to be a truly global startup hub, especially now with Trump’s immigration policies, now is a big opportunity for us to adapt one of the big brands,” said the source.
“If you ask me what’s the value of YC, 500 and Techstars, it’s the network. Once you do a Demo Day with them, within half an hour you can reach Brad Feld, Sequoia, whoever you want among the best investors, mentors and corporate partners. We don’t quite have that yet,” said the source, who preferred to remain anonymous.
The recent entrance from California’s 500 Startups was a step in the right direction, signalling that at least one major international brand decided the market was ready north of the border.
500 Startups is an early-stage venture fund and seed accelerator founded by Dave McClure and Christine Tsai. It recently welcomed its 20th cohort of startups. But 500 Startups has also expanded all over the world, and only just arrived in Canada this summer. That’s after it had already had a presence in Mexico City for over two years.
David Dufresne heads up the Montreal office as venture partner within the new 500 Startups Canada. He said his group considers Techstars a great program and organization.
“We love seeing founders benefit from the education, mentoring and networking that they provide,” said Dufresne. “And we love considering Techstars graduates for investment by 500 Canada.”
Montreal’s FounderFuel has served as a long-time institution in the city, pumping out two cohorts of startups per year through its accelerator program. Over six years the program has completed 10 cohorts, accelerating around 80 teams. FounderFuel is funded by Montreal’s Real Ventures.
A new competitor in the community may not be such a bad thing, said FounderFuel’s Isaac Souweine.
“When we fund companies ultimately we need other investors in other ecosystems. It’s global trade – everybody has to work together,” he said.
With every passing year it seems more and more likely a large US brand may make a move given Montreal’s growth. Souweine said FounderFuel doesn’t look over its shoulder wondering if and when that may happen.
“It’s not worth our time trying to predict how other people are going to move,” said Souweine. “I come from a startup background and you learn not to spend your time looking at what the competition does… It’s the same here. We don’t spend time thinking about what other people are going to do because we have such great opportunities in front of us.