Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Why A $35M Built In Canada Startup Still Moved To The US
Startups and Talent | Jan 28, 2026
Built In Canada Doesn't Always Mean Staying In Canada
On January 21, 2026, CTV News reported that a fintech startup built in Canada, Internet Backyard, reached an approx. valuation of $35 million in Canada but ended up relocating to the United States. The story drew attention because the venture succeeded here but still chose to leave after proving product market fit.
See: Which Fintech Processes Are Most Ready for Agentic AI
The founders included a recently graduated international student from Vietnam and her co-founder from Brazil.
The founders built the product in Canada, validated demand, hired talent, and reached scale. After that proof point, they made the decision to move the business south.
The founders cited two main reasons for leaving: access to growth capital and visa limitations. Those challenges aren't unique and reflect structural gaps that continue to impact where ambitious companies choose to grow.
While Canada's become a strong place to attract global founders, students, and early stage builders. The challenge emerges later, when companies move from validation to rapid expansion and require larger capital rounds, senior leadership mobility, and operational certainty. In those moments, founders tend to optimize for speed and certainty rather than geography.
Canada’s Venture Capital Market Makes Scaling Harder
Canada’s venture capital environment continues to constrain companies at the growth stage. According to data cited by RBCx, Canadian venture capital firms raised just over $2 billion in new capital in 2025. That level sits well below longer term averages and reflects a market dominated by a small number of large funds.
The same data shows that emerging fund managers raise only about $249 million of that total. The top five funds account for roughly 83% of all capital raised, concentrating decision making power among a small group of investors. This concentration reduces the number of domestic lead investors capable of supporting large follow on rounds. For founders approaching Series B or later, this structure often results in slower fundraising cycles, fewer competitive term sheets, and increased pressure to secure capital outside Canada.
See: 12 Market Entry Approaches for Fintech Startups
Fundraising constraints also impact capital allocation. Through the first nine months of 2025, total venture capital investment in Canadian companies reached approximately $4.9 billion across 386 deals, compared with about $8.6 billion invested across all of 2024, based on aggregated industry reporting referenced by RBCx.
The conditions make capital availability less predictable at the exact moment companies need speed and certainty. When companies are ready to scale, relocation is increasingly becoming a rational operational decision based on their confidence in the domestic ecosystem, not a reflection of founder loyalty.
Immigration And Founder Mobility Constraints
Capital isn't the only factor. Immigration and founder mobility also impact the decision where founders choose to scale.
Canada’s Start Up Visa program aims to attract global entrepreneurs and support company building inside Canada. In practice, the program faces processing delays and capacity strain. The federal government now applies application caps and limits new intake while it works toward program changes expected to take effect in 2026, according to Immigration, Refugees and Citizenship Canada.
For founders already operating a growing company, these conditions create uncertainty. Delays and intake limits complicate executive mobility, cross border hiring, and decisions about where senior leadership can legally and reliably operate.
By comparison, the United States offers more established founder and talent pathways, including O-1 and H-1B visas, that companies can pursue once growth accelerates. For teams making time sensitive scaling decisions, visa predictability can be a competitive advantage. Having said that, the US administration has introduced new fees which could adversely affect the program.
Why It Matters
When companies leave after proving traction, Canada loses future job creation, downstream investment, and the chance to build repeat founders who recycle experience and capital into the next generation of startups.
Read: U.S. Brain Drain and Implications for Canadian Fintech
The solution is to close the gap between early success and long term scale (reducing top founder frictions). It requires coordinated progress on growth capital availability, immigration execution, and speed of decision making. Until those pieces align, Canada will continue to function as a strong launch environment but a weaker destination for companies once they reach global scale.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
Leave a Reply