Canada’s flagship tech corridor just posted its strongest global ranking in years. Government policy just needs to keep up.
Startup Genome and the Global Entrepreneurship Network released the 2026 Global Startup Ecosystem Report (GSER 2026) today, ranking Toronto-Waterloo at #13 globally, up seven positions from last year, and tied with Paris.
Vancouver and Montreal tied for the 40th spot.
The Ontario corridor’s strong showing is driven by its AI-native startup cluster. These are companies where AI is core to the business model or product from day one, not an add-on.
The report draws on data from more than 5.5 million companies across 350+ entrepreneurial innovation ecosystems.
AI is driving recovery and picking the winners
Global startup funding spent two years contracting. According to last year’s report, total ecosystem value around the world fell by 31% between the second half of 2022 and 2024.
This year’s numbers signal recovery.
Worldwide ecosystem value reached $10.9 trillion, up 40% in a single year. Total exit value rose 164% year-on-year to nearly $800 billion, significantly above pre-pandemic levels, though still below the 2021 peak of nearly $1.9 billion.
AI-native exit value alone jumped over 500% to $243 billion. Late-stage funding climbed approximately 17% in 2025 to around $210 billion, surpassing pre-pandemic levels.
Startups where AI is the core product are now the defining sub-sector in global startup value, on track to become the largest share of global startup ecosystem value within three years.
Their global ecosystem value has grown 969% since 2021. Comparatively, non-AI tech startups grew 101%. Funding for AI-native companies grew 218% from 2021 to 2025, even as overall tech funding shrank 36% over the same period. Late-stage funding into AI-native companies more than doubled in 2025 to $108 billion, over half of all late-stage funding globally.
North American startups received 73% of all early-stage and 86% of all late-stage AI-native funding globally. Silicon Valley’s ecosystem value has now surpassed $3 trillion, nearly three times the next largest ecosystem on the planet (New York City).
North American ecosystem value grew 51% since last year’s report, against a global increase of 33%. The region now accounts for 64% of global late-stage funding, up from 56% in 2021.
Defence tech is now the fastest-growing tech sub-sector outside of AI, with Series A value up approximately 60% and deal counts up 15% over the past year, as European venture capital (VC) constraints on defence investment give way to geopolitical reality.
Seed funding is also being structurally rewritten. Large VC funds are now deploying $20-50 million checks at this stage to lock in top AI-native startups early, compressing the traditional funding ladder in ways that will affect how and where the next generation of companies gets built.
Where Canada fits and notable global standouts
Toronto-Waterloo is Canada’s highest-ranked ecosystem (#6 in North America), but Calgary, Ottawa, and Edmonton are each building on distinct advantages.
Calgary ranks in the #41–50 range of emerging ecosystems, with $6.9 billion in ecosystem value, and is in the top 10 in North America for affordable talent. Ottawa climbed more than ten positions to the #61–70 range. Edmonton ranks in the top 10 in North America for funding runway and third for affordable talent.
The rankings shifts aren’t limited to North America. A few ecosystems outside the Canada-U.S. corridor are worth noting for what they signal about where momentum is building globally.
- Mumbai entered the rankings as the #1 Emerging Startup Ecosystem globally, leading all emerging ecosystems in performance, funding, talent, and market reach.
- Stockholm emerged as the standout performer among European ecosystems, jumping eight positions to #23, which is the biggest climb of any European ecosystem in the Top 40.
- Auckland made the most dramatic climb of any emerging ecosystem in the entire Top 100, surging more than 75 positions to the #31-40 range.
“Global Ecosystem Value is up nearly 40%, but three U.S. ecosystems captured two thirds of that growth,” said Startup Genome founder and CEO JF Gauthier. “Governments are spending their scarce budget on compute infrastructure and corporate AI adoption — importing U.S. solutions — leaving too little to fund updated policies that accelerate the building of a local AI-native startup ecosystem that produces exports and ensures their future prosperity.”
Jonathan Ortmans, president of the Global Entrepreneurship Network, frames the same problem as a question of will rather than capacity.
“That answer lies in the choices made now,” he said. “Whether governments treat entrepreneurs as partners, whether corporations open their doors to startups, and whether ecosystems double down on inclusion when the temptation is to retreat.”
That’s a pointed pair of observations for Canada, having just released its national AI strategy. The $2.3 billion ‘AI for All’ commitment is weighted heavily toward infrastructure and adoption rather than the startup creation and scaling the report says matters most.
The report’s concentration data shows that the AI-native startups most likely to solve enterprise problems at scale are increasingly being built in U.S. hubs.
The multi-sector movement to buy and build Canadian has its hurdles, as Canadian companies want to buy local, but the structure around them often makes it harder than it should be.
Toronto-Waterloo’s rise to the 13th top ecosystem in the world shows Canada can compete with the best. Whether the country as a whole can climb higher depends on what the federal and provincial government prioritize next.
“The next chapter of global innovation will be written by those who make the boldest decisions,” said Ortmans.
Final Shots
- Toronto-Waterloo’s climb to the 13th spot globally is driven by AI-native startup density, the same factor now determining where late-stage capital concentrates worldwide, with 86% of AI-native late-stage funding flowing to North America and the bulk of that to U.S. hubs.
- After two slow years, the global startup recovery is here, with ecosystem value up 40%, exits up 164%, late-stage funding above pre-pandemic levels. This is, however, being captured unevenly, as three U.S. ecosystems account for two thirds of the growth.
- Startup Genome’s central warning is that governments funding infrastructure and importing U.S. AI solutions risk absorbing AI’s disruption without capturing its economic returns.