The Greater China startup ecosystem has reached a critical inflection point. With 372 unicorns valued at over $1.2 trillion and a strategic pivot from consumer internet to deep technology, China, Hong Kong, and Macau represent one of the world’s most dynamic venture landscapes. For Canadian innovators and investors, this transformation creates unprecedented partnership opportunities, particularly for those who can navigate the complex intersection of climate technology, immigrant entrepreneurship, and cross-border innovation.
NextStars, a Toronto-based global venture studio and accelerator, sits at the strategic center of this opportunity. By focusing on immigrant entrepreneurs and climate-conscious companies, NextStars is uniquely positioned to facilitate the bi-directional flow of talent, capital, and technology between Canadian and Asian ecosystems. Canada ranks first globally among OECD nations for attracting immigrant entrepreneurs, while simultaneously ranking eighth for clean energy investment at $35 billion. These complementary strengths create a natural bridge to Asia’s massive markets and manufacturing capabilities.
The timing is exceptional. Hong Kong entrepreneurs are migrating to Canada at record rates through the Start-up Visa program (337% growth in 2023), while Asian investors deployed $842 million into Canadian ventures in 2024. Meanwhile, China’s commitment to carbon neutrality by 2060 requires RMB 138 trillion in investment, creating massive demand for Canadian cleantech expertise in carbon capture, hydrogen production, and energy storage. This report examines the current state of these three interconnected markets and identifies specific pathways for productive collaboration.
China’s transformation from consumer to industrial innovation
China maintains its position as the world’s second-largest startup ecosystem despite significant headwinds. The country hosts between 340 and 372 unicorns with a combined valuation exceeding $1.2 trillion, accounting for 25% of global unicorns. Beijing alone houses 115 unicorns, the highest concentration of any city worldwide, with 71.3% focused on hard technology rather than consumer applications.
The ecosystem is undergoing a fundamental structural shift. While venture capital funding declined 32% year-over-year to $33.2 billion in 2024 (the lowest since 2014), strategic sectors continue attracting substantial investment. Semiconductors lead with 56 unicorns valued at $161.8 billion, followed by artificial intelligence with 37 unicorns representing 40% of global AI unicorns. Deep technology sectors now capture 38% of venture capital financing, up dramatically from just 10% in 2017.
DeepSeek’s breakthrough exemplifies this transition. Founded in late 2023, the AI company developed the DeepSeek-R1 model rivaling OpenAI’s capabilities while spending only $5.6 million on training compared to over $100 million for US competitors. The achievement sparked what venture capitalist Marc Andreessen called “AI’s Sputnik moment,” demonstrating Chinese innovation potential despite US semiconductor export controls. DeepSeek’s success catalyzed renewed investor interest across China’s AI sector in early 2025.
Government backing increasingly dominates the investment landscape. State-backed investors participated in 60 of the top 100 deals between 2021 and 2024, double the rate from 2017 to 2020. In March 2025, China announced a 1 trillion yuan ($138 billion) National Venture Capital Guidance Fund targeting quantum computing, AI, semiconductors, and renewable energy. Government guidance funds have channeled $912 billion into strategic industries over the past decade, with 23% directed toward AI-related firms.
NextStars can leverage this shift by connecting Canadian deep tech innovators with Chinese manufacturing capabilities and market access. Canadian strengths in AI research (pioneered by Toronto’s Geoffrey Hinton and Montreal’s Yoshua Bengio) complement China’s commercialization speed and production scale. For immigrant entrepreneurs from China or Hong Kong building climate tech or AI companies, NextStars provides the crucial North American foothold while maintaining strategic connections to Asian markets.
Hong Kong emerges as Asia’s innovation gateway
Hong Kong’s startup ecosystem reached record scale in 2024 with 4,694 startups employing 17,651 people, representing 10% year-over-year growth. The city jumped 20 positions to rank 27th globally in the 2025 Startup Genome Report, marking its first entry into the top 40. Most significantly, Hong Kong doubled the number of exits over $50 million compared to 2024, signaling ecosystem maturation beyond early-stage activity.
Fintech dominates with 619 startups attracting $2.4 billion in investments during 2024. The sector benefits from Hong Kong’s position as a global financial center with 160 licensed banks and the world’s fourth-largest IPO market. Seven active unicorns operate from Hong Kong, including four prominent fintech companies: HashKey Group (valued at $1.2 billion after its January 2024 Series A), WeLab ($2 billion valuation, achieving profitability in Q1 2025), Micro Connect, and ZA Group.
The health and medical sector showed explosive 54% year-over-year growth, while sustainable technology startups surged 82%. This concentration in fintech, biotech, and climate tech creates natural partnership opportunities for Canadian ventures. Hong Kong Science and Technology Parks Corporation manages an ecosystem supporting over 2,000 companies with 24,000 workers, including 15,000 R\u0026D personnel. The organization operates specialized facilities including a Microelectronics Centre, GreenTech Hub housing 200+ companies, and ATP GMP Centre for biotechnology.
NextStars can position itself as the primary bridge connecting Hong Kong’s financial infrastructure with Canadian innovation. With 28% of Hong Kong startup founders being non-locals (including significant numbers from mainland China, UK, US, and Canada), the city operates as a natural hub for immigrant entrepreneurs. For NextStars portfolio companies seeking Asian expansion, Hong Kong offers English-language business environment, common law legal system, and straightforward access to the Greater Bay Area’s 86 million consumers across 11 cities.
Government support continues intensifying. Hong Kong’s 2024 Policy Address announced a HK$10 billion Innovation and Technology Industry-Oriented Fund structured as a fund-of-funds targeting five sub-sectors: life and health tech, AI and robotics, semiconductors, digitalization, and future sustainable development. The fund employs a 1:3 government-to-private investment ratio, aiming to attract up to HK$100 billion in investments over the next decade. The HK$2 billion Innovation and Technology Venture Fund was redeployed in 2024 with HK$1.5 billion specifically targeting AI, life sciences, and advanced manufacturing through an enhanced co-investment model.
Macau focuses on diversification beyond gaming
Macau operates a nascent startup ecosystem focused on economic diversification from gaming dependency. While significantly smaller than Hong Kong, Macau represents a unique strategic asset as a bridge between China and Portuguese-speaking countries. The territory launched its first comprehensive Development Plan for Appropriate Economic Diversification (2024-2028) targeting a “1+4” industrial model: integrated tourism and leisure as the foundation, supplemented by traditional Chinese medicine and big health, modern financial services, high technology and innovation, and conventions/exhibitions/culture.
The government committed 5 billion patacas ($621 million) for science and technology research from 2024 to 2028, more than doubling previous funding levels. The Macau Young Entrepreneur Incubation Centre and Centre for Innovation and Entrepreneurship at University of Macau have successfully incubated over 50 startups in sectors including environmental protection, new materials, IT, medicine, and biotechnology.
The Guangdong-Macao In-Depth Cooperation Zone in Hengqin provides critical expansion space. This 85-square-kilometer area (three times Macau’s land area) hosts 6,521 Macau-backed enterprises as of October 2024. The zone implemented a “two lines” customs system in March 2024, creating relaxed customs between Macau and Hengqin while maintaining strict controls for mainland China entry. This structure allows Macau startups to test mainland market entry with reduced barriers.
Macau’s positioning as a China-Portuguese-speaking countries platform creates specialized opportunities. The territory serves as permanent secretariat for the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries, with trade reaching nearly 30 billion yuan in 2023. The 929 Challenge startup competition connects 9 Greater Bay Area cities, 2 SARs, and 9 Portuguese-speaking countries, facilitating cross-border entrepreneurship with 3,400 participants and 450 projects to date.
For NextStars, Macau offers a specialized entry point for ventures targeting Portuguese-speaking markets in Brazil, Portugal, Angola, and Mozambique. Canadian companies in traditional Chinese medicine, tourism technology, or convention/exhibition solutions can leverage Macau’s unique cultural and linguistic bridges. While the ecosystem remains early-stage, first-mover advantages exist for organizations establishing systematic presence.
Major venture capital players reshaping the landscape
The venture capital landscape across China, Hong Kong, and Macau underwent significant transformation in 2024-2025, marked by geopolitical pressures and shifting investor compositions. Total venture investment in China reached $33.2 billion in 2024, down 32% from $48.9 billion in 2023, representing the lowest level since 2014. Despite declining overall volumes, strategic sectors including AI, electric vehicles, and semiconductors continued attracting substantial mega-deals.
Local Chinese venture firms increasingly dominate the market. HongShan (formerly Sequoia Capital China) operates as an independent entity following its March 2024 split from Sequoia’s US and European operations. Managing approximately $56 billion in assets, HongShan raised an RMB 18 billion ($2.5 billion) fund in 2024 while investing in over 1,077 companies including Alibaba, ByteDance, Meituan, and DeepSeek. The firm particularly focuses on hard technology, having invested in 40+ semiconductor companies since 2020.
IDG Capital maintains position as China’s most active investor with 1,485 portfolio companies spanning early to growth-stage technology. The Beijing-based firm manages billions across multiple funds with offices extending to New York, London, Hong Kong, Seoul, and Vietnam. Qiming Venture Partners manages $9.5 billion across 18 funds (11 USD and 7 RMB funds) with 530+ portfolio companies and 200+ successful exits, focusing on technology, media, telecom, and healthcare at Series A and B stages.
Government-backed funds increasingly fill gaps left by retreating foreign capital. The National Venture Capital Guidance Fund announced in March 2025 targets 1 trillion yuan ($138 billion) in mobilization for hard technology sectors. Government guidance funds collectively raised 11 trillion RMB as of Q1 2020, with 1,863 active government VC funds supporting 45,419 firm investors through 6,514 intermediate funds. State-backed investors participated in approximately 60% of the largest 100 deals between 2021 and 2024, double the participation rate from 2017 to 2020.
International venture firms dramatically reduced China exposure. Foreign VC participation dropped to 8.5% of deals in 2024 from 18% in 2021. GGV Capital split operations in September 2023, with GGV Capital US announcing it “will not invest in China” going forward. SoftBank Vision Fund, while maintaining presence, recorded volatile performance with $32 billion in losses during fiscal year ending March 2023. Tiger Global Management, previously one of the most active international investors, significantly reduced new deal activity.
Hong Kong-based venture firms provide crucial bridge capital. Horizons Ventures, backed by billionaire Li Ka-shing, invested in 332 companies with notable exits including Skype, Siri, Facebook, Spotify, and Zoom. The firm ranks Canada third (after US and Israel) for international deal count, focusing particularly on health and cleantech sectors through its partnership with MaRS Discovery District. Animoca Brands concentrates on metaverse, gaming, and NFTs with 332 portfolio companies. Brinc operates 15 multidisciplinary programs across 7 countries, investing in 242 companies focused on blockchain, AI, robotics, climate tech, and food tech.
NextStars should develop systematic relationships with both local Chinese VCs seeking North American deal flow and Hong Kong-based bridge investors. Horizons Ventures’ partnership with MaRS demonstrates the viability of structured cross-border venture relationships. For NextStars portfolio companies, introductions to firms like Qiming Venture Partners (with offices in both North America and Greater China) or HongShan can facilitate growth capital and Asian market entry. Conversely, NextStars can position itself as the Canadian partner for Asian VCs seeking climate tech and immigrant entrepreneur deal flow.
Investment activity concentrates in strategic sectors
Venture investment activity across Greater China showed distinct sectoral concentration in 2024-2025, with artificial intelligence, electric vehicles, and semiconductors capturing the majority of capital despite overall market contraction. The pattern reflects China’s strategic emphasis on technological self-reliance and the “new quality productive forces” framework emphasizing frontier technology development.
Artificial intelligence dominated with $6 billion invested in Greater China AI deals by May 2024, representing 50% of 2023’s full-year total and 32% to 35% of all funding. Major rounds included Moonshot AI’s $1+ billion raise in February led by Alibaba and HongShan, Baichuan AI’s $688 million, and Zhipu AI’s $400 million. DeepSeek’s breakthrough in late 2024 and early 2025 sparked renewed investor enthusiasm, with Chinese funds experiencing an “avalanche” of interest in AI deals. Chinese AI companies raised $38.86 billion in 2024, accounting for 36.7% of the global total.
Electric vehicle and clean technology investment remained resilient with approximately $15 billion in 2023 (22% year-over-year increase, double US investment of $7 billion) and sustained activity through 2024. Notable deals included Avatr Technology’s $1.5 billion Series C in December 2024 backed by Changan Auto and CATL, Zhiji Automobile’s $1.1 billion Series B, BAIC BJEV’s $1.39 billion strategic financing, and Neta Auto’s $693 million. One-third of cleantech deals focused specifically on electric vehicle companies, reflecting China’s dominant position in the global EV market with 28+ million vehicles sold annually.
Semiconductor investment more than doubled in Q1 2024 to $2.7 billion across 108 deals, up from $1.4 billion in Q4 2023. The sector receives prioritized government support given US export controls on advanced chips. Major raises included ChangXin Memory Technologies’ $1.5 billion round at a $19.4 billion valuation for DRAM chip production, CRRC Times Semiconductor’s $599 million, and SJ Semi’s $700 million. Notably, 44% of semiconductor deals occurred at Series A or earlier, indicating strong pipeline development.
Average deal sizes demonstrate China’s scale advantage. Chinese Series A rounds average $20 million to $30 million with an $8.5 million median, approximately three times larger than US counterparts averaging $12 million to $18.7 million with a $5.5 million median. This pattern extends across stages: Series B rounds average $40 million to $50 million, Series C rounds $58 million+, and mega-deals over $100 million occurred 83 times in 2024. State-backed investors participated in 31 of these 83 mega-deals (37.4%), ensuring continued capital availability for strategic sectors.
The investment stage distribution shifted notably. Early-stage activity (seed and Series A) represented 45% to 48% of deal count but only 16% to 27% of total capital value in 2024. Series C funding showed significant recovery with 130% quarter-over-quarter increase in Q1 2024 and median valuations rising 48% to $131.8 million to $195 million. Series D and later stages remained severely constrained with fewer than 8 monthly deals at Series E or beyond.
NextStars can capitalize on this sectoral concentration by focusing portfolio development in areas where Canadian innovation meets Asian demand. Canadian strengths in AI research (with pioneers at Toronto and Montreal universities), carbon capture technology (20% of global large-scale CCUS projects), hydrogen production (abundant natural gas and hydropower resources), and advanced energy storage (zinc, vanadium, and second-life battery solutions) directly address China’s priority investment sectors. For immigrant entrepreneurs from China or Hong Kong, NextStars provides expertise navigating both Canadian non-dilutive funding (SRED tax credits at 35% to 60%, BDC venture debt, EDC support) and maintaining strategic connections to Asian growth capital for later rounds.
Government policies drive strategic sector development
Government policies across China, Hong Kong, and Macau increasingly emphasize strategic sector development through comprehensive tax incentives, direct funding programs, and ecosystem infrastructure. These initiatives create both opportunities and requirements for foreign companies seeking market access.
China’s policy framework centers on “new quality productive forces,” introduced by President Xi Jinping in September 2023 and embedded in the 15th Five-Year Plan (2026-2030). The strategy prioritizes achieving greater self-reliance in science and technology while steering development toward frontier technologies including AI, robotics, semiconductors, and renewable energy. Made in China 2025 targets increasing domestic content of core components to 70% by 2025 across 10 key sectors, while the Strategic Emerging Industries initiative identifies next-generation IT, biotechnology, advanced manufacturing, and innovative digital technology as national priorities.
Tax incentives provide substantial support for qualifying startups. Small and low-profit enterprises with annual taxable income below RMB 3 million, fewer than 300 employees, and total assets under RMB 50 million receive an effective 5% corporate income tax rate (compared to the standard 25% rate). High and new technology enterprises qualify for a reduced 15% rate. R\u0026D super deductions allow 100% additional deduction for expenses not forming intangible assets (effectively 200% total deduction) and 200% amortization for expenses forming intangible assets, valid through December 31, 2027.
Venture capital investors benefit from tax incentives allowing 70% of investment amounts to be deducted from taxable income for investments held 2+ years in qualified tech startups. Angel investors receive similar 70% deductions on equity transfer income. Entrepreneurship guarantee loans provide up to RMB 200,000 for individuals and RMB 3 million for enterprises, while college graduate entrepreneurs receive tax deductions up to RMB 12,000 annually for 3 years plus access to 30% of government-funded incubator space free of charge.
China operates 232 national-level economic development zones generating RMB 16.9 trillion ($2.36 trillion) in regional GDP during 2024. These zones host over 700 national incubators and maker spaces, contain 18.3% of China’s high-tech enterprises, and account for approximately 25% of utilized foreign investment and trade volume. Regional tax benefits include 15% corporate income tax rates for encouraged industries in western regions (valid until December 31, 2030), Shanghai Lingang New Area (first 5 years for qualified enterprises), and Qianhai Shenzhen-Hong Kong zone (valid until December 31, 2025).
Hong Kong’s Innovation and Technology Venture Fund provides systematic co-investment support through an optimized structure deployed in 2024. The HK$1.5 billion redeployment employs a 1:3 government-to-market funding ratio, with government commitment of HK$150 million to HK$250 million per fund and maximum HK$30 million or 40% per investee company. Eligible companies must be incorporated within the last 7 years, maintain headquarters or main operations in Hong Kong, engage in I\u0026T business, employ fewer than 250 people, and ensure 50% of investment is spent on Hong Kong operations including talent and procurement.
The HK$10 billion Innovation and Technology Industry-Oriented Fund launched in 2024 as a fund-of-funds targeting five sub-sectors: life and health tech, AI and robotics, semiconductors, digitalization, and future sustainable development. Structured with a 1:3 government-to-private investment ratio, the fund aims to attract up to HK$100 billion in investments over 10 years. Hong Kong’s competitive 16.5% corporate tax rate with no VAT or dividend tax complements these programs. Greater Bay Area integration policies provide tax equalization for Hong Kong and overseas I\u0026T talent, subsidizing individual income tax exceeding 15% of salary, plus reduced 15% corporate income tax rates for foreign projects in high-tech industries.
Macau’s Young Entrepreneurs Aid Scheme offers up to MOP 300,000 ($37,000) interest-free loans repayable within 8 years for permanent residents aged 21 to 44 starting their first business. The Funding for Enterprise Innovation and R\u0026D provides non-reimbursable grants ranging from under MOP 1 million (Type A) to MOP 3 million to 5 million (Type C) for priority sectors including traditional Chinese medicine, integrated circuits, Internet of Things, big data, AI, new energy, space science, advanced materials, and biomedicine. The Science and Technology Development Fund budget increased from 170 million patacas in 2020 to 350 million patacas in 2022, more than doubling, with 5 billion patacas ($621 million) committed for 2024 to 2028.
NextStars can guide portfolio companies through this complex policy landscape, particularly for ventures pursuing dual-market strategies. Canadian startups entering Hong Kong can leverage ITVF co-investment, reducing dilution while gaining local credibility. For immigrant entrepreneurs from Asia building companies in Canada, NextStars provides expertise accessing Canadian non-dilutive support (SRED tax credits, BDC programs, EDC financing) while maintaining awareness of Asian policy incentives for potential future expansion. Understanding requirements such as Hong Kong’s 50% local spending mandate or China’s high-tech enterprise certification criteria becomes crucial for successful cross-border operations.
Navigating opportunities and challenges in three distinct markets
Each market presents distinct opportunity profiles and challenge sets requiring tailored strategies. Understanding these differences allows for more effective resource allocation and risk management.
China offers massive scale with increasing complexity. The domestic market of 1.4 billion consumers provides unmatched commercial opportunity, particularly for companies achieving product-market fit. Manufacturing excellence through world-class supply chains enables rapid scaling from prototype to mass production, often within weeks rather than months. Government guidance funds with 11 trillion RMB in targeted capital actively support strategic sectors aligned with national priorities. However, intensifying challenges include heightened regulatory scrutiny since 2021 targeting monopolistic practices and data security, geopolitical tensions reducing foreign investment (FDI utilized fell 29.1% in H1 2024), complex intellectual property protection despite legal frameworks, and US export controls restricting access to advanced semiconductors and certain technologies.
The shift from consumer internet to industrial focus creates specific opportunities for B2B and B2G business models in hard technology sectors including semiconductors (56 unicorns, $161.8 billion valuation), AI (37 unicorns, 40% of global total), and new energy/EVs (13% of unicorns). Companies demonstrating technological self-reliance and operating in non-sensitive sectors face more favorable conditions. The DeepSeek success story validates that breakthrough innovation remains possible despite technology restrictions when companies focus on efficiency and novel approaches.
Hong Kong provides international gateway advantages with talent competition constraints. The territory’s position as a stable, English-language business environment with common law legal system and free capital flows offers lower-risk entry compared to mainland China. Access to the Greater Bay Area’s 86 million consumers through CEPA framework advantages combines market opportunity with familiar operating environment. The sophisticated financial infrastructure with 160+ licensed banks, position as Asia’s fourth-largest IPO market (HKD 87.6 billion raised in 2024), and HK$35.5 trillion in assets under management (65% from international sources) facilitates growth financing. Government support through systematic programs including HK$10 billion ITIF, HK$2 billion ITVF, specialized incubation at HKSTP and Cyberport, and strong institutional frameworks creates comprehensive ecosystem support.
Challenges include fierce talent competition from Singapore, Shenzhen, and Silicon Valley for skilled workers, small local market of 7.5 million requiring immediate international expansion, high operational costs with rent and labor remaining top constraints, and funding gaps between seed and Series B stages. Tech salaries increased 25% in 2024, reflecting competitive pressure. However, the 28% non-local founder rate demonstrates international attractiveness, while the 10% startup growth in 2024 and jump to 27th global ranking signal strong momentum.
Macau represents nascent opportunity requiring patience and specialized positioning. The territory’s unique role as a China-Portuguese-speaking countries platform provides differentiated access to markets in Brazil, Portugal, Angola, Mozambique, and other Lusophone nations through Forum Macao connections and cultural bridges. Government commitment with 5 billion patacas for 2024-2028 science and technology development, systematic economic diversification through the “1+4” strategy, and the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (85 square kilometers, 6,521 Macau-backed enterprises) demonstrate serious development intentions. First-mover advantages exist for early entrants given the less crowded competitive landscape.
Significant challenges include very small local market (32 square kilometers, approximately 700,000 residents) requiring immediate expansion, immature ecosystem with limited VC presence and nascent support infrastructure, heavy historical gaming reliance (although declining from 80% to 40% of GDP), constrained talent pool requiring specialized recruitment, and limited track record with no unicorns produced to date. Companies considering Macau should view it as a strategic platform for specific use cases (Lusophone market access, tourism technology, TCM/health sector, convention/exhibition solutions) rather than a primary market.
For NextStars portfolio companies, market selection depends on business model and sector. Enterprise AI, carbon capture, hydrogen technology, and advanced manufacturing startups may prioritize mainland China for scale and government support. Fintech, biotech, and international platform companies benefit from Hong Kong’s regulatory environment and financial infrastructure. Specialized ventures targeting Portuguese-speaking markets, tourism technology, or unique cultural bridges may find differentiated positioning in Macau.
Canada-Asia synergies create natural partnership opportunities
Canada’s relationships with China, Hong Kong, and Macau demonstrate significant depth across trade, investment, immigration, and technology partnerships, creating multiple avenues for productive collaboration despite geopolitical complexities.
Trade relationships provide foundation for business connections. China represents Canada’s largest single trading partner outside the United States and European Union, with over 3,750 Canadian enterprises exporting goods to China totaling $21.3 billion in identified exports as of 2018. Combined bilateral trade with China and Hong Kong reached $38.6 billion in 2018, concentrated in Shanghai, Beijing, Hong Kong, Shandong, and Jiangsu accounting for approximately 70% of exports. Key Canadian exports include agri-food products (canola, soybeans, pork), motor vehicles, wood pulp, and lumber meeting China’s growing consumption needs.
Approximately 200 Canadian tech firms maintain 415 locations across China and Hong Kong, with Hong Kong representing the largest destination followed by Shanghai. Services predominate, especially software/services and analytics, with advanced manufacturing also significant. Most firms maintain subsidiary presence in other Asia-Pacific markets rather than exclusively focusing on China/Hong Kong, demonstrating regional strategy approaches.
Investment flows show increasing Asian participation in Canadian ventures. Asian investors deployed $842 million (9% of total) in Canadian companies during 2024, representing growth from $343 million (5% share) in 2023. Top five Asian investor countries include South Korea, China, Japan, Taiwan, and Hong Kong. Major Chinese/Hong Kong investors in Canada include Horizons Ventures (ranking Canada third after US and Israel for international deals, focusing on health and cleantech through MaRS Discovery District partnership), Tencent Holdings (invested in Element AI co-founded by AI pioneer Yoshua Bengio), and Canadian Chinese Angel Alliance operated by River Capital Beijing comprising 28 prominent Chinese angels investing $50,000 to $8 million per deal.
Notable Chinese investments in Canadian startups include $10 million in Calgary’s GINSMS, $13 million in Toronto’s 500px, $50 million in Waterloo’s Kik Interactive, $39 million in Montreal’s Blockstream Corp, and $3 million in Montreal’s Peak Positioning Technologies. The Canadian Chinese Angel Alliance portfolio spans 17 Ontario ventures including Viafoura ($2.5 million investment), Blitzen, ExpertFile, and Arrowonics. Chinese investors target Canada for lower valuations compared to US counterparts, world-class AI research at Montreal and Toronto universities, North American market access, better IP protection than China with stable legal systems, high-quality tech talent, and less competitive investor landscapes.
NextStars can systematically leverage these established investment flows by positioning as the preferred entry point for Asian capital seeking Canadian climate tech and immigrant entrepreneur opportunities. The organization’s dual focus aligns perfectly with Asian investor interest in Canadian AI research capabilities and cleantech solutions while providing cultural familiarity for immigrant entrepreneurs from China, Hong Kong, and Macau.
Immigration pathways create talent bridges between regions. Canada’s Start-up Visa program launched in 2013 targets immigrant entrepreneurs with innovative businesses, requiring letters of support from designated organizations (venture capital funds requiring minimum $200,000 investment, angel investor groups requiring minimum $75,000 investment, or business incubators). The program has become exceptionally popular among Hong Kong residents, with 115 achieving permanent residence through SUV in the first 9 months of 2023, projected to reach 153 for the full year representing 337% growth from 35 in 2022. Historical growth shows dramatic acceleration from 5 in 2017 to 30 in 2020 to 15 in 2021 to 35 in 2022 to 153 projected in 2023.
An Open Work Permit Program for Hong Kong Residents created in response to China’s clampdown on pro-democracy activists was extended in February 2023 for two additional years, with eligibility expanded from 5 years since graduation to 10 years. A Permanent Residence Pathway for Hong Kong Residents operates as a temporary policy from June 1, 2021 to August 31, 2026, though IRCC paused applications until January 2027, making Start-up Visa the primary option. A 2023 University of Pennsylvania Wharton School study found SUV increased the likelihood of US-based entrepreneurs starting businesses in Canada by 69%.
NextStars can pursue designation as an official Start-up Visa supporting organization (business incubator category), creating systematic pathways for Hong Kong and Chinese entrepreneurs to establish Canadian operations while maintaining Asian market connections. This positioning as an immigration-enabled venture studio provides differentiated value compared to standard accelerators. For the 300,000+ Canadian residents in Hong Kong and significant Chinese diaspora in Toronto, NextStars offers natural cultural affinity and cross-border network access.
Technology and innovation partnerships provide government-facilitated collaboration mechanisms. Canadian Technology Accelerators operate programs in Hong Kong across three focus areas: Hong Kong Sustainability Tech CTA targeting decarbonization and waste reduction technologies, Hong Kong Property Tech CTA addressing the world’s most valuable real estate market, and Hong Kong FinTech CTA focusing on blockchain, AI, machine learning, digital identity, and cybersecurity. The Trade Commissioner Service network spans over 160 cities worldwide including multiple offices in China, Hong Kong, and Macau, facilitating introductions, market intelligence, and pre-arranged meeting programs.
Export Development Canada, with involvement extending back to 1979, maintains a representative office in Hong Kong providing insurance, financing, guarantees, and bonding programs for sovereign, quasi-sovereign, and private Chinese buyers. EDC supported 440 cleantech companies with $41 billion over the past decade, exceeding 2025 targets two years early. Structured partnership mechanisms include MaRS Discovery District’s 2015 partnership with Cyberport Hong Kong identifying business acceleration opportunities, China Canada Angels Alliance / River Capital providing co-investment and mentorship programs, and SFU Innovates partnering with China Canada Cleantech Innovation Centre connecting entrepreneurs across both countries.
Complementary strengths create natural synergy opportunities. Canada’s global leadership in artificial intelligence (first country to create national AI strategy in 2017, leading research centers in Montreal and Toronto, 670+ AI startups with 263 funded and 5 unicorns) combines with China’s commercialization capabilities and manufacturing scale. Canadian cleantech expertise (ranked 3rd globally for AI-enabled cleantech risk capital, 13 companies on 2024 Top 100 Global Cleantech list, $80 billion environmental and clean technology sector generating 3.5% of GDP) addresses China’s carbon neutrality commitment requiring RMB 138 trillion in investment by 2050.
Specific sector synergies include Canadian AI research enhancing China’s manufacturing automation and Industry 4.0 initiatives, Canadian cleantech solutions addressing China’s environmental challenges and carbon neutrality goals, Canadian R\u0026D innovation combining with Chinese manufacturing scale and speed to market, Canadian natural resources (canola, pork, lumber, minerals) meeting China’s consumption needs, and Canadian service companies leveraging Hong Kong as entry point to broader Asian markets.
NextStars occupies the strategic center of these Canada-Asia synergies. As a Toronto-based venture studio focusing on immigrant entrepreneurs and climate-conscious companies, NextStars provides the systematic bridge infrastructure that larger organizations cannot efficiently deliver. The organization can facilitate bi-directional flows: Canadian climate tech accessing Asian manufacturing and markets, Asian entrepreneurs accessing Canadian immigration pathways and North American customers, Asian capital accessing Canadian innovation with government co-investment, and Canadian companies accessing Asian growth financing for later rounds. This bridge position, combined with specialized expertise in climate tech and immigrant entrepreneurship, creates defensible differentiation in an increasingly crowded global accelerator landscape.
Strategic framework for NextStars as the Canada-Asia bridge
NextStars can establish itself as the definitive bridge between Canadian and Asian startup ecosystems by executing a focused strategy leveraging its unique positioning at the intersection of climate technology, immigrant entrepreneurship, and cross-border venture building.
The market timing creates exceptional opportunity. Canada ranks first globally among OECD nations for attracting immigrant entrepreneurs, with immigrant founders accounting for 34.7% of all early-stage entrepreneurship significantly exceeding most EU, G7, and G20 economies. Hong Kong entrepreneurs are migrating to Canada at record rates, with Start-up Visa approvals growing 337% in 2023. Simultaneously, Canada’s clean energy investment reached $35 billion in 2024 (19% growth, 8th globally), while China’s carbon neutrality commitment by 2060 requires RMB 138 trillion creating massive demand for Canadian cleantech expertise in carbon capture, hydrogen production, and energy storage.
NextStars should pursue three core strategic pillars. First, establish systematic pathways for Asian immigrant entrepreneurs building climate tech companies in Canada. This includes pursuing designation as an official Start-up Visa supporting organization in the business incubator category, creating specialized programming for Hong Kong and Chinese diaspora founders navigating both Canadian non-dilutive funding (SRED tax credits at 35% to 60%, BDC venture debt, EDC support) and maintaining strategic connections to Asian growth capital. The 28% non-local founder rate in Hong Kong, 300,000+ Canadian residents in Hong Kong, and significant Chinese diaspora in Toronto provide natural talent pipeline.
Second, develop structured partnerships connecting Canadian portfolio companies with Asian market access, manufacturing capabilities, and growth capital. This involves establishing formal relationships with Hong Kong-based bridge investors like Horizons Ventures (which already ranks Canada third globally for international deals and partners with MaRS Discovery District), mainland Chinese VCs like Qiming Venture Partners with North American offices, Hong Kong Science and Technology Parks for co-acceleration programming and GreenTech Hub collaboration, Cyberport for fintech and digital entertainment ventures, and Export Development Canada for financing support given EDC’s $41 billion cleantech portfolio.
Third, create specialized climate tech programming addressing sectors where Canadian innovation meets Asian demand. Priority focus areas should include carbon capture and sequestration given Canada’s 20% global share of large-scale CCUS projects and China’s RMB 138 trillion transition financing need, hydrogen economy leveraging Canada’s production advantages (abundant natural gas, cheap hydropower) with Asian demand, energy storage showcasing Canadian innovation in zinc, vanadium, and second-life batteries combined with Asian manufacturing and market scale, sustainable built environment applying Canadian green building expertise to Hong Kong’s 42,000 buildings and China’s massive construction sector, and circular economy solutions pairing Canadian waste management technology with Hong Kong’s per capita waste exceeding Tokyo, Seoul, and Taipei.
Program design should emphasize practical bridge-building over generic acceleration. Standard accelerator programming provides mentorship, network access, and modest seed capital. NextStars can differentiate through concrete services including immigration facilitation for Asian founders (Start-up Visa sponsorship with legal navigation), cross-border investor introductions systematically connecting ventures to appropriate Canadian angel groups (Canadian Chinese Angel Alliance), venture capital (BDC Capital, Horizons Ventures), and Asian growth investors (Qiming, HongShan for later rounds), market entry expertise guiding Canadian ventures through Hong Kong as gateway (leveraging InvestHK relationships, Canadian Technology Accelerator programs, Trade Commissioner Service connections), and manufacturing partnerships connecting Canadian innovators with Chinese and Asian production capabilities through established business development channels.
The venture studio model provides particular advantages over traditional accelerators. By taking hands-on operational roles building portfolio companies, NextStars can demonstrate deep expertise navigating cross-border complexity, justify higher equity stakes funding more intensive support, create replicable processes for Canada-Asia expansion, and build proprietary networks across both ecosystems over time. This approach aligns with the immigrant entrepreneur focus, as founders relocating from Asia particularly value operational guidance establishing Canadian entities, accessing government programs, understanding regulatory requirements, and building local customer relationships.
NextStars should target ventures at specific inflection points. For Asian entrepreneurs, support those with validated business models in home markets seeking North American expansion and permanent residence pathways, technical founders with deep technology expertise requiring business development and market access support, and second-time entrepreneurs with exits or significant corporate experience leveraging diaspora networks. For Canadian companies, focus on those with proven technology readiness requiring manufacturing partnerships and Asian market entry, ventures with immigrant founders possessing inherent cross-border networks but lacking systematic access strategies, and climate tech companies at Series A/B stages needing growth capital where Asian investors increasingly participate.
Partnership opportunities exist across multiple levels. Government programs including Canadian Technology Accelerators in Hong Kong (sustainability tech, property tech, fintech focus), Export Development Canada for cleantech financing ($41 billion deployed to 440 companies), and Trade Commissioner Service for market intelligence and introductions provide institutional support. Ecosystem organizations including MaRS Discovery District for cleantech programming and investor networks, Foresight Canada as Canada’s largest cleantech accelerator for co-marketing and shared deal flow, DMZ Toronto Metropolitan University ranked number 1 globally for university-based incubation with immigrant entrepreneur focus, InvestHK for Hong Kong market entry facilitation, and Hong Kong Science and Technology Parks / Cyberport for co-acceleration and facility access offer operational collaboration. Strategic investors including Horizons Ventures already partnered with MaRS focusing on health and cleantech in Canada, BDC Capital with $1.6 billion climate/cleantech commitment and active international syndication, Qiming Venture Partners with both North American and Greater China presence managing $9.5 billion, and Canadian Chinese Angel Alliance providing systematic access to 28 prominent Chinese angel investors create capitalization pathways.
Marketing and positioning should emphasize NextStars as the specialized bridge between Canadian innovation and Asian opportunity, leveraging Canada’s number 1 OECD ranking for immigrant entrepreneurs while connecting to Asia’s manufacturing scale and massive markets. Thought leadership content should address practical topics including navigating Canada’s Start-up Visa program for Hong Kong entrepreneurs, accessing non-dilutive Canadian funding (SRED, grants, tax incentives), manufacturing partnerships connecting Canadian cleantech with Chinese production, Asian market entry strategies using Hong Kong as gateway, and cross-border venture capital including Asian investors in Canadian rounds.
Success metrics should track bi-directional activity demonstrating bridge effectiveness. Portfolio company metrics include number of Asian immigrant founders supported through Start-up Visa pathway, Canadian ventures achieving Hong Kong or China market entry, ventures securing Asian venture capital participation in Canadian rounds, and exits involving Asian acquirers or listings on Hong Kong exchanges. Network metrics include partnership agreements with Hong Kong and Chinese ecosystem organizations, designated organization status for Start-up Visa program enabling direct sponsorship, and systematic deal flow from both Canadian and Asian sources.
The competitive landscape includes generic global accelerators like Y Combinator, Techstars, and 500 Global providing standard programming without cross-border specialization, regional Canadian programs like MaRS, DMZ, and Foresight offering local expertise but limited Asian market connections, and Asian programs like Hong Kong Science Parks, Cyberport, and Chinese incubators supporting companies in home markets without North American entry support. NextStars can differentiate through dual-market expertise operating effectively in both Canadian and Asian contexts, climate tech and immigration specialization at the intersection of high-value trends, hands-on venture studio model providing operational support beyond mentorship, immigrant entrepreneur focus with cultural competency and relevant networks, and systematic bridge infrastructure connecting specific organizations, investors, and programs across regions.
The fundamental value proposition positions NextStars as the organization that understands both worlds. For an immigrant entrepreneur from Hong Kong building a carbon capture company, NextStars provides Start-up Visa sponsorship, SRED tax credit navigation, BDC venture debt access, customer introductions in Canadian oil and gas sectors, and eventual connections to growth capital from Qiming or Horizons Ventures. For a Canadian energy storage company seeking Asian manufacturing and market entry, NextStars provides introductions to Hong Kong Science Parks GreenTech Hub, facilitation through Export Development Canada financing, strategic guidance on IP protection and partnership structuring, and connections to potential Chinese manufacturing partners and distribution channels.
This bridge position becomes increasingly valuable as geopolitical complexity grows. Unlike US-based organizations facing political constraints around China engagement, Canadian organizations benefit from greater flexibility. Unlike Asian organizations lacking deep Canadian ecosystem integration, NextStars offers genuine local expertise and government program access. The combination of climate tech focus (addressing one of the century’s defining challenges), immigrant entrepreneur specialization (leveraging Canada’s unique strength), and systematic cross-border infrastructure creates defensible competitive positioning in the rapidly evolving global innovation ecosystem.
The path forward for Canada-Asia innovation collaboration
The venture landscape across China, Hong Kong, and Macau reached an inflection point in 2025. While China’s total venture investment declined to $33.2 billion representing the lowest level since 2014, strategic sectors including AI, electric vehicles, semiconductors, and climate technology continue attracting substantial capital. The ecosystem transformation from consumer internet to deep technology, combined with increasing government backing through the 1 trillion yuan National Venture Capital Guidance Fund and systematic policy support, positions the region for sustained innovation despite geopolitical headwinds.
Hong Kong’s remarkable ecosystem growth to 4,694 startups with a 20-position global ranking improvement demonstrates emerging market maturity. The concentration in fintech (619 startups, $2.4 billion in 2024 investment), health and medical (54% year-over-year growth), and sustainable technology (82% growth) aligns closely with Canadian strengths. Government commitments including the HK$10 billion Innovation and Technology Industry-Oriented Fund and HK$2 billion Innovation and Technology Venture Fund with systematic co-investment structures provide institutional support infrastructure. Macau’s nascent ecosystem, while significantly smaller, offers specialized positioning as a China-Portuguese-speaking countries platform with 5 billion patacas committed for 2024-2028 development.
For Canadian organizations, these markets represent both substantial opportunity and meaningful complexity. The complementary nature of Canadian innovation in AI and cleantech with Asian manufacturing capabilities and market scale creates natural synergy. Canada’s ranking as first globally among OECD nations for attracting immigrant entrepreneurs, combined with Hong Kong entrepreneur migration increasing 337% through the Start-up Visa program, demonstrates systematic talent flows. Asian investors deploying $842 million into Canadian ventures in 2024 (up from $343 million in 2023) signals growing capital interest.
NextStars occupies a unique strategic position to facilitate these connections. As a Toronto-based venture studio focusing explicitly on immigrant entrepreneurs and climate-conscious companies, the organization addresses the precise intersection of Canada’s competitive advantages (AI research, cleantech innovation, immigrant entrepreneurship) with Asia’s massive opportunities (carbon neutrality requiring RMB 138 trillion investment, manufacturing scale, growth capital availability). By developing systematic bridge infrastructure including Start-up Visa sponsorship capabilities, formal partnerships with Hong Kong ecosystem organizations like HKSTP and Cyberport, structured relationships with cross-border investors like Horizons Ventures and Qiming Venture Partners, and specialized programming for ventures navigating dual-market expansion, NextStars can establish defensible positioning as the definitive Canada-Asia innovation bridge.
The venture studio model provides particular advantages over traditional accelerator approaches. Taking hands-on operational roles building portfolio companies allows deeper engagement with cross-border complexity, justifies higher equity stakes funding more intensive support, creates replicable processes for systematic scaling, and builds proprietary networks across both ecosystems over time. For Asian immigrant entrepreneurs seeking Canadian permanent residence while building climate tech ventures, NextStars offers comprehensive support from immigration facilitation through non-dilutive funding navigation to eventual growth capital connections. For Canadian cleantech companies requiring Asian manufacturing partnerships and market entry, NextStars provides structured pathways leveraging government programs (Export Development Canada, Trade Commissioner Service, Canadian Technology Accelerators) and ecosystem relationships.
Success requires discipline and specialization. Rather than attempting broad geographic or sector coverage, NextStars should maintain tight focus on climate technology sectors where Canadian innovation meets Asian demand (carbon capture, hydrogen, energy storage, sustainable built environment, circular economy), immigrant entrepreneurs from Greater China with technical depth and cross-border networks, and ventures at specific inflection points requiring systematic Canada-Asia bridge infrastructure rather than generic acceleration. Partnership development should emphasize government programs providing institutional support (EDC, TCS, InvestHK), ecosystem organizations enabling operational collaboration (MaRS, Foresight, HKSTP, Cyberport), and strategic investors facilitating capitalization (Horizons Ventures, BDC Capital, Qiming, CCAA).
The fundamental opportunity stems from market structure inefficiency. Despite substantial cross-border investment flows, systematic bridge infrastructure remains underdeveloped. Large organizations lack incentive to build specialized Canada-Asia programming given modest individual transaction sizes. Generic global accelerators provide standardized services without regional depth. Regional programs excel in home markets but lack cross-border capabilities. This structural gap creates space for a specialized venture studio combining deep expertise in both Canadian and Asian ecosystems, climate technology and immigrant entrepreneurship focus areas, and hands-on operational support navigating cross-border complexity.
For NextStars, the strategy forward involves systematic execution. Pursue Start-up Visa designated organization status enabling direct immigration sponsorship. Establish formal partnerships with 2-3 key Hong Kong organizations (HKSTP for climate tech, Cyberport for fintech/digital). Develop structured relationships with cross-border investors managing $50+ million seeking Canadian climate tech deal flow. Create specialized programming addressing concrete needs: immigration facilitation, non-dilutive funding access, manufacturing partnership development, Asian market entry execution, and growth capital connections. Build replicable processes allowing each portfolio company success to inform subsequent cohort support.
Market both directions simultaneously. In Canada, position as the specialized accelerator for immigrant entrepreneurs building climate tech companies with built-in Asian market access. In Hong Kong and China, position as the systematic pathway to Canadian permanent residence, North American market access, and non-dilutive government funding for climate tech ventures. Thought leadership content should address practical cross-border topics demonstrating expertise. Network development should prioritize quality over quantity, focusing on strategic relationships that create systematic rather than opportunistic deal flow.
The intersection of climate technology urgency, immigrant entrepreneurship trends, and cross-border capital flows creates a generational opportunity. China’s commitment to carbon neutrality by 2060, Hong Kong’s transformation to innovation hub through HK$10 billion+ government investment, and Canada’s leadership in both immigrant attraction and cleantech innovation converge at a unique moment. NextStars, through disciplined focus on this specific intersection and systematic development of bridge infrastructure, can establish itself as the definitive organization connecting Canadian and Asian innovation ecosystems while building valuable companies addressing one of the century’s defining challenges.
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