The Scale-Up Gap: A Research Study On Why Canadian Firms Sell Abroad and How to Anchor Canadian Firms Here

Canada consistently produces world‑class innovation and globally competitive companies. Yet many of these firms are acquired by foreign buyers at the exact moment scaling becomes most complex and capital‑intensive.

Today, the Council of Canadian Innovators (CCI), in partnership with Impact Group, DataAngel Policy Research, Yvan Clermont, and LABmedia Consulting, and funded in part by the Government of Canada, published The Scale-Up Gap: From Value Creation to Value Retention, a national study drawing on in-depth interviews with founders who sold to foreign buyers and analysis of the ecosystem conditions that shape scaling outcomes.

The study outlines why promising companies are sold at the point of scale, and sets out practical policy and marketplace steps to help more firms scale, remain Canadian, and deliver long‑term economic value here at home.

“We heard from founders who  built great products and won early customers, but who faced a system that didn’t provide what was needed right at the precise moment their companies were about to take off,” said Laurent Carbonneau, CCI Vice President of Policy and Advocacy and a research partner on the study. “Policy can greatly improve the odds that Canadian firms stay, scale, and lead here, but creating market frameworks that connect customers, capital, talent, procurement, and commercialization into a coherent pathway for growth is foundational to retaining economic value.”

Canada consistently creates high‑potential firms across sectors. The policy test is whether those firms can convert early success into sustained, independent growth at home. When they cannot, Canada risks losing strategic decision‑making and the long‑term economic value that accrues when firms scale and retain leadership domestically.

“Governments and organizations around the world are supporting innovation firms to reach scale on their own home soil. In Canada, too many companies hit a wall just when momentum matters most,” said Patrick Searle, Chief Executive Officer of CCI. “High‑growth companies anchor domestic supply chains, commercialize IP, and concentrate the managerial and operational experience that fuels future startups. If Canada wants more firms to scale here and stay Canadian, policymakers and ecosystem leaders need to act with urgency to close this gap.”

Key report findings:

• A recurring “scale conversion” problem: many firms reach product‑market fit but face a short window when they must rapidly access capital, customers, experienced leadership, and infrastructure. When those elements are missing or too slow, foreign acquisition often becomes the most viable path.
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• Four structural barriers narrow domestic pathways at scale:
  • Risk: commercialization‑stage risk is poorly matched to the timelines and instruments of domestic public and private capital.
  • Demand: early domestic customers — especially in public and regulated markets — are often inaccessible, making foreign customers the de‑facto source of validation.
  • Fragmentation: support exists across programs and players but lacks continuity, creating repeated reset points and costly delays.
  • Talent & infrastructure: scale‑stage executive experience, specialized hires, and capital‑intensive facilities are difficult to assemble quickly in Canada.
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• Post‑acquisition outcomes are mixed: most firms retain some operations in Canada, but leadership and strategic decision‑making typically shift abroad.
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• Founder trajectories vary: many founders remain active in the ecosystem, but their experience is not consistently translated into stronger domestic scaling pathways for the next generation.
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The Scale-Up Gap: From Value Creation to Value Retention outlines practical steps governments and ecosystem partners can take to strengthen domestic scaling pathways:

• Align financing with commercialization timelines: design funding that matches sectoral realities (e.g., longer horizons for life sciences and capital‑intensive manufacturing), speed up approvals, and enable milestone‑based financing.
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• Use public buying strategically: structure procurement to allow staged pilots and early contracts that validate emerging firms and provide reference customers.
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• Improve continuity across programs: reduce administrative resets, enable shared assessment and handoffs between programs, and coordinate timelines so momentum is preserved.
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• Mobilize talent and infrastructure: accelerate access to specialized immigration routes, support facility and manufacturing scale‑up, and deepen pipelines for experienced senior operators and go‑to‑market leaders.
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• Strengthen domestic growth capital: develop vehicles with sector expertise and willingness to lead large, complex rounds.

Download a full PDF of the report here.

Media contact
Lisa Brody Hoffman
Director of Communications, CCI
lhoffman@canadianinnovators.org.

About the study
The report is a national qualitative study based on 30 interviews with founders of Canadian firms acquired by foreign buyers, conducted in collaboration with The Impact Group, DataAngel Policy Research, Yvan Clermont, and LABmedia Consulting. The research was funded in part by the Government of Canada. Full methodology, appendices, and sample characteristics are included in the report.