{"id":61884,"date":"2025-07-14T10:00:41","date_gmt":"2025-07-14T10:00:41","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/07\/14\/canadian-tech-startups-are-embracing-the-eu-but-can-they-escape-the-pull-of-the-u-s\/"},"modified":"2025-07-14T10:00:41","modified_gmt":"2025-07-14T10:00:41","slug":"canadian-tech-startups-are-embracing-the-eu-but-can-they-escape-the-pull-of-the-u-s","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/07\/14\/canadian-tech-startups-are-embracing-the-eu-but-can-they-escape-the-pull-of-the-u-s\/","title":{"rendered":"Canadian tech startups are embracing the EU. But can they escape the pull of the U.S.?"},"content":{"rendered":"<p> \n<br \/><br \/>\n<iframe loading=\"lazy\" title=\"Trump&#039;s new tariff on copper called &#039;inexplicable&#039;\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/JTscQbsmnT4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> Bottles of sticky-and-sweet maple syrup may not seem like the best way to grab customer attention in Canada, but the golden-hued bottles served as an easy icebreaker for Toronto-based Threat IQ Inc. at Hannover Messe, the world\u2019s top industrial technology trade show, in Germany in April. <\/p>\n<p> Scott Osmond, Threat IQ\u2019s head of sales, who is leading the global expansion efforts for its services that help\u00a0organizations design and implement secure information technology (IT) and operational technology (OT) systems, received \u201coverwhelming\u201d interest from European businesses for its services. <\/p>\n<p> \u201cEvery country that we talked to at Hannover Messe was excited to have Canada focused on working with the EU,\u201d he said. \u201cIt was eye-opening.\u201d <\/p>\n<p> Around 245 Canadian <\/p>\n<p>                        startups<\/p>\n<p>                         showcased their products and services at Hannover Messe, which recognized Canada as its partner country of the year. Red-and-white maple leaf flags and hockey jerseys decorated company booths and hung from the rafters of the cavernous trade show hall. <\/p>\n<p> More broadly, at least 500 Canadian companies have showcased their products and services at technology trade shows in Europe over the past three months as they try to diminish their reliance on the <\/p>\n<p>                        United States<\/p>\n<p>                         for business, capital and expertise. <\/p>\n<p> U.S. President <\/p>\n<p>                        Donald Trump<\/p>\n<p>                        \u2019s attacks on <\/p>\n<p>                        global trade<\/p>\n<p>                         and threats against Canadian sovereignty have helped push Canadian companies away from the U.S. and toward the <\/p>\n<p>                        EU<\/p>\n<p>                        . <\/p>\n<p> American investors still occupy a major role in financing Canadian startups, participating in 32 per cent of all venture-capital deals in Canada in 2024, according to the Canadian Venture Capital &#038; Private Equity Association (CVCA). <\/p>\n<p> But as Canada-EU ties blossom, with Ottawa and Brussels looking to cooperate more closely on defence and the digital economy, some are questioning whether Canadian firms can escape the pull of the U.S. altogether. <\/p>\n<h2>Natural partners<\/h2>\n<p> The EU offers natural advantages for Canadian tech startups expanding internationally, something that is built upon a long history of trade and tech collaboration, industry voices say. <\/p>\n<p> The <\/p>\n<p>                        Canada-EU Trade Agreement<\/p>\n<p>                         (CETA), implemented in 2017, serves as a launchpad. Its introduction was a \u201cgame-changer\u201d for Canadian startups that removed tariffs, streamlined regulation and opened up the EU\u2019s $20-trillion market, said Jayson Myers, chief executive of<\/p>\n<p>                        <span>\u00a0Next Generation Manufacturing Canada (<\/span><\/p>\n<p>                        NGen), an industry group. Since 2017, Canada-EU trade has surged 71 per cent. <\/p>\n<p> \u201cFrankly, CETA is one of the best trade agreements in the world,\u201d he said. <\/p>\n<p> Despite this, most Canadian tech companies have failed to take full advantage of the treaty because the U.S. has long been the priority market for them, Myers said. <\/p>\n<p> \u201cBut that has absolutely changed over the last six months,\u201d he said. <\/p>\n<p><img decoding=\"async\" alt=\" Jayson Myers, chief executive of\u00a0Next Generation Manufacturing Canada.\" data-has-syndication-rights=\"1\" data-license-id=\"3885337\" data-portal-copyright=\"Adam Huras\/Legislature Bureau\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/no0711myers-1.jpg\" title=\" Jayson Myers, chief executive of\u00a0Next Generation Manufacturing Canada.\" \/><\/p>\n<p> Trump\u2019s annexation and tariff threats have motivated Canadian businesses, particularly those operating in areas such as clean technology, artificial intelligence and cybersecurity, to make a bigger European push. <\/p>\n<p> Jan Gunash, co-founder and chief growth officer at Kitchener, Ont.-based CoeusAI (formerly known as Marsland Institute Inc.), an AI-powered analytics platform for renewable energy planning, initially considered the U.S. as a \u201cgo-to-market. That\u2019s just where we turn naturally as a Canadian company.\u201d <\/p>\n<p> It now regards the EU as its key market outside Canada, given the bloc\u2019s focus on clean energy goals and the Trump administration\u2019s prioritization of fossil fuels. Trump\u2019s recently passed One Big Beautiful Bill dealt a major blow to the U.S.\u2019s renewables sector. <\/p>\n<p> CoeusAI uses a wide range of data sources, including climate, regulatory and financial data as well as nature and wildlife protected area databases, to analyze where to best place renewable energy infrastructure. <\/p>\n<p> But several data sources in the U.S. have gone offline in recent months, Gunash said, and the company is nervous about energy and data sources staying active in the country. <\/p>\n<p> \u201cWe\u2019re more confident that (EU) data sources will be accessible long term,\u201d he said. <\/p>\n<p> ThreatIQ eyed the U.S. when it began its international expansion in 2023. The company, which employs 35 people across Canada, had two U.S.-based employees at the time and subsequently opened a U.S. subsidiary. <\/p>\n<p> \u201cIt made sense from a compliance perspective,\u201d Osmond said. \u201cWhen you\u2019re dealing with critical infrastructure, pretty much anywhere in the world, there\u2019s citizenship requirements to do the work.\u201d <\/p>\n<p> Trump\u2019s recent actions have made travelling to and doing business in the U.S. much more uncertain, he said, which changed their minds about expanding there. <\/p>\n<p><img decoding=\"async\" alt=\" U.S. President Donald Trump while departing the White House on July 11 in Washington, D.C.\" data-has-syndication-rights=\"1\" data-license-id=\"3885340\" data-portal-copyright=\"Win McNamee\/Getty Images\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/no0711trump.jpg\" title=\" U.S. President Donald Trump while departing the White House on July 11 in Washington, D.C.\" \/><\/p>\n<p> The April trade fair in Germany helped ThreatIQ generate hundreds of new EU business leads and secure a partnership with Madrid-based cybersecurity firm CyberScope I.K.E., which operates across Europe and Israel, with arms in the U.S. and South America. <\/p>\n<p> \u201cOur focus is now on Europe. IT and OT security is much more mature there than in North America,\u201d Osmond said. As for its U.S. operations? \u201cWe\u2019re not going to shut (it) down. But will we grow it now? It\u2019s unlikely.\u201d <\/p>\n<p> Other Canadian startups have long regarded the EU as a natural partner complemented by existing diplomatic and trade ties. <\/p>\n<p> \u201cFrom the start, France was our target market for international expansion,\u201d Andr\u00e9anne Passarelli, head of growth and business development at Quebec City-based Videns Analytics Inc., said. \u201cWe had this close relationship working with Quebec\u2019s delegation in Europe. That opened up opportunities right away.\u201d <\/p>\n<p> The startup, which was founded in 2018 and helps businesses develop AI and data platforms, scored a year-long contract in 2022 with European aerospace giant Airbus Group SE to improve construction processes for its A330 and A350 aircrafts and it is in conversation to extend that collaboration. <\/p>\n<p> Videns has also teamed up with Siradel SAS on 3D AI urban mapping projects to improve the energy performance of buildings and public road equipment. <\/p>\n<p> Videns showcased its products and services in Paris this June at VivaTech, Europe\u2019s largest startup and tech conference, which helped it close a new deal to help Siradel develop its agentic AI capabilities, talk to thousands of people and generate 50 high-calibre leads, said Passarelli, who is based in Rome and oversees Videns\u2019 EU expansion. <\/p>\n<p> More than 500 Canadian delegates representing 230 organizations, in addition to Canada\u2019s recently minted AI and Digital Innovation Minister Evan Solomon, participated in VivaTech 2025, which shone a spotlight on Canadian tech by honouring Canada as the country of the year. <\/p>\n<h2>Deepening ties<\/h2>\n<p> Canadian startups say that there\u2019s still a learning curve when it comes to European expansion, especially when it comes to complying with tighter tech regulations and local nuances in different countries. <\/p>\n<p> \u201cIn Europe, everything is different: regulations, operational realities, culture and the way you market your product and pitch to a customer,\u201d said Amanda Arciero, the cofounder and COO of Montreal-based Airudi Inc., which creates AI workforce management tools for companies. \u201cYou have to tailor your strategy to each country, whereas in the U.S., it\u2019s more of a cookie-cutter approach.\u201d <\/p>\n<p> The EU\u2019s more careful approach to tech regulation, more distant and varied markets and the enduring lure of Silicon Valley capital and ambition mean the U.S. is still enticing domestic startups. <\/p>\n<p> In June, Winnipeg-based Conquest Planning Inc., which makes financial planning software, completed a $110-million Series B that will drive its U.S. expansion, while Toronto-based wellness startup Othership Inc. raised $11 million for the same purpose. <\/p>\n<p> Yet industry voices say there has been a sea change in how Canada and the EU are collaborating. <\/p>\n<p> \u201cSomething has fundamentally shifted. What\u2019s happening in the U.S. (is) making companies look elsewhere for customers, suppliers and innovation partners,\u201d Myers said. \u201cThere\u2019s much more interest from European companies in Canadian technology and vice versa.\u201d <\/p>\n<p> Canada\u2019s established brainpower in fields such as AI, quantum computing, robotics, advanced materials and alternative energy, coupled with its image as a responsible tech leader, already makes it an attractive partner for the EU. <\/p>\n<p> The bloc also offers incentives for Canadian companies to hire, expand and set up shop, from Ireland\u2019s corporate tax breaks to Estonia\u2019s e-residency program, Karen Klink, director of growth and partnerships at startup hub Communitech, said. <\/p>\n<p> Ottawa and Brussels\u2019 deepening relationship could further that momentum. Canada and the EU\u2019s recently inked defence and security agreement will let Canadian companies participate in ReArm Europe, a $1.25-trillion program to significantly boost the EU\u2019s defence spending and capabilities. <\/p>\n<p> \u201cThat opens the door for a lot of companies in defence and other sectors,\u201d Myers said. <\/p>\n<p> Canada is now working with the EU on a potential digital trade agreement to reduce barriers and facilitate greater trade in digital goods and services. Companies such as Airudi welcome the prospect of a digital trade agreement, which could \u201cabsolutely\u201d help Canadian startups in the EU, Arciero said. <\/p>\n<p> The Canada-EU relationship could be \u201can enduring one, but it all depends on our ability to take advantage of the opportunities there,\u201d Myers said. <\/p>\n<p> Canadian startups stereotypically grow to a certain stage and then sell to a U.S. firm, he said, depriving Canada of valuable intellectual property. Europe offers a chance to access alternative capital \u201cin a way that doesn\u2019t sell the whole ranch,\u201d perhaps by integrating into\u00a0a European company doing business globally. <\/p>\n<ul class=\"related_links\">\n<li>What are AI agents and which jobs are they coming for first?<\/li>\n<li>Competition Bureau to probe whether Amazon&#8217;s rules are unfair to sellers and consumers<\/li>\n<\/ul>\n<p> \u201cWe\u2019re not saying that Europe has displaced the U.S.,\u201d Myers said. \u201cBut Canadian companies have just scratched the surface of Europe.\u201d <\/p>\n<p> <em>\u2022 Email: ylau@postmedia.com <\/em> <\/p>\n\n<br \/>Canadian tech startups are embracing the EU. But can they escape the pull of the U.S.?<\/a><br \/>\n<br \/>2025-07-14 10:00:41<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bottles of sticky-and-sweet maple syrup may not seem like the best way to grab customer attention in Canada, but the golden-hued bottles served as an easy icebreaker for Toronto-based Threat&#8230;<\/p>\n","protected":false},"author":2,"featured_media":61885,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-61884","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/61884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=61884"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/61884\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/61885"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=61884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=61884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=61884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}