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Google to launch its first Canadian incubator and three new offices as part of national expansion plan

A rendering of Google’s planned office in Waterloo, Ont. Google
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Google is launching its first Canadian accelerator for “high-potential, early-stage” tech startups seeking to harness the power of artificial intelligence and machine-learning capabilities, The Logic has learned.

The three-month accelerator—called Google for Startups Accelerator Canada—will be based in Waterloo, Ont., where the company has a growing physical and technical footprint. Google confirmed the launch as part of a national expansion plan announced Thursday, which includes growing its workforce to 5,000 employees by 2022 across new offices in Toronto, Waterloo and Montreal.

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Talking Point

Google’s first Canadian incubator is part of an expansion plan that will see the company set up new offices in Toronto, Montreal and Waterloo to house 5,000 employees. The accelerator is launching 15 years after the company first established roots in Waterloo, Ont. Until now, Google had chosen to partner with startup hubs like Communitech, offering its resources and mentorship to entrepreneurs, but shied away from creating its own programming for startups. Steve Woods, Google’s senior director of engineering, told The Logic that this accelerator is trying something new by sharing both Google’s expertise and its partnerships, offering “an ecosystem of support.”

“We are at the phase of growth and maturation in Canada that we can do this,” said Steve Woods, Google’s senior engineering director. 

The company first set roots north of the border in 2001 with a single employee. Its Canadian workforce currently numbers 1,500, but the company expects to add more engineers to work on cloud and security, as well as gaming developers, sales and marketing staff and AI researchers.

While 5,000 employees would represent a significant increase in Google’s Canadian footprint, it would still lag the larger workforces some of its Big Tech competitors have here. Amazon expects to have 15,000 employees in Canada by 2022; IBM currently has over 13,000. 

The completion dates for Google’s new offices are “staggered,” said spokesperson Aaron Brindle. The Montreal location, which will host up to 1,000 employees on 425 Viger Ave. W. in the downtown core, may be ready to move in “as early as the end of this year.” Google’s cloud gaming firm, Stadia, made its first investment in the city last month with the purchase of Typhoon Studios.

A rendering of Google’s planned office in Montreal on 425 Viger Ave. W. Google

In Toronto, the company “may have bridge spaces to accommodate near term needs, but we will not be moving out of our current location on Richmond or our offices on Adelaide [streets],” Brindle said.

The expanded plans do not mention Sidewalk Labs’ proposed Google Canada headquarters at Villiers West in Toronto. Google has been described as an anchor tenant at the site its sister company wants to develop as part of a controversial smart-city project. In its Master Innovation and Development Plan, Sidewalk Labs said parent company Alphabet was targeting 500,000 square feet of space in the development to accommodate 2,500 jobs. 

“We’re in discussions with Waterfront Toronto as well as with Google and Alphabet about if we can move [the headquarters] over to Quayside,” Sidewalk Labs CEO Dan Doctoroff said at a Toronto Region Board of Trade event last month. “There’s a number of really good possibilities there, and so our focus is that we’ll be able to do that.”

Sidewalk’s proposals for the waterfront “did not factor into decisions around this new office,” said a Google source who was not willing to be identified. The company remains “very excited” about the work Sidewalk Labs is undertaking “and committed to exploring a future headquarters on Toronto’s waterfront if it continues to be part of Sidewalk Labs’ innovation plan.”

A rendering of Google’s planned Toronto office, which won’t replace its current locations in the city. Google

The most immediate outcome of Thursday’s announcement, however, will be the launch of the accelerator. It will accept two cohorts this year, with eight to 10 startups in each group. Applications for the first open March 2. The program will be led by Ashley Francisco, Canada startup ecosystem lead, who has been with the company for almost five years. In the coming weeks, the company will be exploring themes for the first cohort, which could range from health to graphics to gaming.

Woods said that in the 15 years the company has been in Kitchener-Waterloo, home to Google’s biggest Canadian office, he has seen the region grow from an emerging tech scene to a vibrant centre of innovation. It currently hosts almost 1,000 of the company’s engineers, along with its cloud health division. 

Until now, Woods said, Google had chosen to partner with hubs like Communitech to offer mentorship and resources to entrepreneurs, rather than run its own programming. But as it looks to keep growing and giving back to the community, it wants to take on a more active role.

The lobby of Google Canada's engineering headquarters in Waterloo, Ont. on Friday, Jan. 22, 2016. Cole Burston/Bloomberg

Woods said the new incubator will fill a gap the company has observed in Canada. While the country hosts many incubators that attract companies looking to scale up, he said Google’s accelerator will focus on revenue-generating tech startups in the seed or Series A stages—“normal kinds of startups, interesting startups.”

Big Tech-backed accelerators have been taking root across the country. Microsoft Canada announced a business accelerator in Ottawa earlier this week. Canada’s first Amazon Alexa incubator was launched late last year, also in Waterloo. IBM created its first-ever innovation incubator in Toronto four years ago.

“Accelerators are hard to define,” Woods said. “Each has a different focus.” Google, he added, is trying something new by offering the technical expertise and relationships it has garnered in the region alongside the ecosystem it has supported and become a part of. 

“We’re exposing companies to an ecosystem of support, not just us. That’s rare across Canada, or even the world,” he said.  

Google’s decision to set up the incubator “was less of an instantaneous change and more of a gradual decision,” Woods said. The company has spoken to all of its community members who are “on board” and will work collaboratively with the firm to create an ecosystem in which the startups can grow. 

According to a 2019 economic impact report the company released Thursday, Google’s search and advertising products helped generate up to $23 billion for more than 500,000 businesses in Canada last year. The study, conducted for Google by opinion research firm Public First, claims the company’s impact was equivalent to approximately 1.1 per cent of Canada’s entire GDP.

“Canada’s digital economy is now bigger than its forestry, mining and gas industries, and the transition to digital reflects incredible momentum for Canadian businesses leveraging data and online technologies,” said Alphabet and Google CFO Ruth Porat in a statement, citing a May 2019 Statistics Canada report.

This will be Google’s 12th incubator globally; it has similar startup incubators in Japan, Brazil, India and Mexico. 

The goal for the Canadian iteration is to tie Google’s success to that of Canada’s startups, Woods said, and make the country “a destination for people to build companies and grow companies.” Woods hopes the accelerator will help emerging firms retain talent and expertise.

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“This is not a zero-sum game for the region, for Canada, for anyone,” Woods said. “It’s not our incubator, it’s the community’s, who can take advantage of our capabilities. 

“It’s an experiment. We’ll see how it works.”

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