When Canadian agri-tech company Resson announced earlier in 2016 its plan to open an office in San Jose, California, it was hardly a bombshell. After all, Silicon Valley is the go-to place for tech companies, and Resson’s investment was just another to add to the pile. However, the move was also part of another, much quieter trend: Canadian tech companies pushing ahead with overseas expansions.
The Canadian tech scene may not get the same recognition as that of Silicon Valley, London or Berlin, but it creates a significant amount of outward tech FDI. So much so, that with 418 projects worth an estimated $4.6bn originating in Canada since 2010, the country was one of the top tech investment sources worldwide, according to greenfield investment monitor fDi Markets.
And while BlackBerry (formerly known as Research in Motion), the country’s most famous tech company and to date its most active tech investor, struggles to keep up with other smartphone manufacturers, there are many other challengers out there. Take CGI Group, a system integration and outsourcing company, which employs 65,000 people worldwide. Since 2010, CGI has launched 30 greenfield projects and invested an estimated $839m in overseas ventures. CGI’s investments, most of which were into centres of excellence and technical support centres, were allocated predominantly in France (nearly half of all the company’s investments in that period), the UK and the US.
Another Canadian company that in recent years has been increasing its international presence is OpenText, an enterprise information management software firm that employs more than 8600 people worldwide and has annual revenues exceeding $1.9bn. In the past five years, the company has invested an estimated $200.6m in greenfield projects across Asia, South America, Europe and Australia. Most of the company’s investments were allocated in ICT and infrastructure, alongside sales, marketing and support, followed by design and development, as well as technical support projects.
Also in the top five of Canadian tech investors are BlueCat Networks, a Toronto-headquartered IP address management firm, and BTI Systems, a network infrastructure firm, which at the beginning of 2016 was acquired by Juniper Networks, a networking equipment giant based in Silicon Valley. BlueCat has expanded predominantly in Asia (China and Singapore), Europe (the Netherlands and Sweden), as well as the US and Australia, focusing predominantly on sales offices and regional headquarters. BTI Systems followed similar a continental spread – expanding to Malaysia, China, the UK and the US, mostly investing in new centres of excellence.
Following the money
Toronto, home to companies such as BlueCat, GuestLogix and Carlton Group, is the leading source of investment in Canadian tech with 109 projects in the past five years. Meanwhile Montreal, home to CGI Group among others, has originated 86 software and IT projects since 2010. Canada’s two largest cities also account for 46% of Canada’s total tech projects launched since 2010. Other significant sources are Vancouver and Ottawa, which since 2010 have recorded 41 projects and 36 projects, respectively.
Like many Canadian companies, Resson is not shouting from the rooftops about its successes. But while its Silicon Valley project might have gone relatively unnoticed, Canadian investment potential in tech is slowly making its voice heard.