One nation’s loss, another nation’s gain: Canada’s startup boom following U.S. travel ban

By startupbeatadmin April 9, 2020

Saba Mohebpour’s life was thrown into limbo with one stroke of the Presidential pen. The CEO and co-founder of Spocket was all but ready in late 2017 to take part in the Techstars Seattle program, a major break that would give his young company access to mentoring, expertise and investors.

However, fate had other ideas. U.S. President Donald Trump’s travel ban came into effect in the weeks before the accelerator to prevent Iranian-born Saba from entering the United States. Saba, therefore, stayed home in Vancouver.

In the wake of the decision, Canada pivoted to cater to the wave of tech talent then unable to enter the U.S. One nation’s loss became another’s gain as Saba continued to do what the entrepreneur does best. Today, Spocket is a success story with a last round valuation that beats most similar startups in the ecommerce space over the same time span. In fact, Saba was recently listed in Forbes’ 30 Under 30, Retail & Ecommerce List for 2020.

Canadian public policy and private enterprise continue to spur entrepreneurial growth by actively providing opportunities for immigrants and potential immigrants.

Over the past decade, employment of skilled technology workers in BC has grown 27%, driven partly by U.S. companies frustrated with their own government’s limit on visas for skilled workers.

Stories like Saba’s are not uncommon. In response to U.S. immigration changes, it is clear that Canada and more specifically Vancouver is an increasingly attractive alternative to Silicon Valley. This is not only supported by the region’s world-class universities and proximity to the U.S West Coast, but legislation as well.

Canada’s Startup Visa program launched in 2016 to give permanent residency to entrepreneurs interested in starting a company in Canada. Beyond its growing local talent pool, the country is attracting skilled tech workers from all over the world with immigrants, often in their 30s and 40s, bringing years of experience to the ecosystem. British Columbia has been especially welcoming in this regard.

Over the past decade, employment of skilled technology workers in BC has grown 27%, driven partly by U.S. companies frustrated with their own government’s limit on visas for skilled workers. Further, BC’s provincial government has made a concerted effort to make it easy for U.S. tech companies to open offices in Canada, providing financial incentives and working with the federal government to expedite visas for skilled foreign workers.

Government and business leaders have moved to seize this moment. The result has been an influx of tech workers — by one count, the number of tech professionals grew by 30 percent from 2017–18. The macro trends are notable, and so too are the personal stories behind the statistics.

A combined effort from the public and private sectors enable people like Saba to escape immigration uncertainty. Spocket, a portfolio company of 7Gate Ventures, gives budding entrepreneurs in dropshipping access to thousands of products from suppliers in Europe and the U.S. So far, more than 33,000 people across the world have launched their own online stores thanks to the company’s solution.

Results like this reinforce the ethos of 7Gate Ventures. The firm’s founding partners each come from a background of immigration, so supporting first and second-generation immigrants in their entrepreneurial ambitions forms an integral part of their investment thesis.

7Gate Ventures is one of the designated VCs in the Canadian Startup Visa Program. This program allows companies to find teams who want to relocate to Canada, and through funding receive visas for team and family members. 7Gate Ventures is one of 23 national venture capital funds with this designation.

Both first-hand accounts and national startup data demonstrate an enriching of the Canadian tech talent pool by supporting skilled immigration. This is the ultimate win-win — one which changes lives and business simultaneously for the better.

Disclaimer: This article includes a client of an Espacio portfolio company.