Authors
Contributors
- Sam Andrey
- Karim Bardeesy
- Sumit Bhatia
- André Côté
- Charles Finlay
Scaling Cyber: Advancing Canada’s Cybersecurity Startups
December 2022
Executive Summary
The development of new and innovative cybersecurity companies has been recognized by global leaders as critical to advancing both national security and economic growth. For this reason, cyber innovation was identified as one of the three key themes of Canada’s National Cyber Security Strategy.1 Yet, while the country has had some success in creating successful cybersecurity firms, Canada has been struggling to keep up with its geopolitical peers when it comes to successfully bringing new cybersecurity products into the market. Informed by a literature review, jurisdictional scan, interviews and a round-table discussion, this report analyzes the obstacles to commercialization experienced by Canada’s cybersecurity startups and the opportunities for overcoming these obstacles.
Key commercialization challenges faced by Canadian cyber startups include:
- A relatively small domestic market: The limited growth opportunities within the country lead to cybersecurity founders looking for opportunities outside of Canada.
- Risk-aversion and a lack of innovation mindset in Canada: Canadian investors and customers are more likely to be risk-averse than their international counterparts.
- Struggles to secure early adopters: With insufficient support from the innovation ecosystem to help startups find initial customers, entrepreneurs typically rely upon existing connections or personal referrals to find their first customers.
- Procurement hurdles: Canadian public procurement processes are often too time-consuming and arduous for smaller businesses, limiting opportunities for governments to act as early purchasers and validators.
- Lack of cybersecurity expertise and connections among investors: Canadian startups feel that investors are less familiar with cybersecurity than other digital technology subsectors, leading to challenges in securing funding for continued growth of their product.
- Lack of perceived value of IP protection: Canadian cyber startups struggle to find support for IP protection, and also struggle to see its utility when confronted with the high costs and time requirements for patent filing.