Y Combinator Removes Canada from Investment List on Website

Y Combinator has officially removed Canada from its list of investment sites, a significant shift for Canadian startups. This change requires aspiring applicants to incorporate in the United States, Cayman Islands, or Singapore to be eligible for the renowned accelerator program.

Y Combinator’s New Investment Policy

As reported on November 2, 2025, Y Combinator’s standard deal terms previously included Canada. However, by the end of that month, Canadian startups were excluded, as the terms now specify that eligible companies must be based in one of the three allowed countries.

This development implies that Canadian startups already incorporated elsewhere must “flip” their corporate structure to qualify for Y Combinator’s investment. This rule has significant implications for the startup landscape in Canada.

Impact on Canadian Startups

Historically, numerous Canadian companies have participated in Y Combinator’s winter and summer cohorts since the program’s inception in 2008. The attraction of Y Combinator has surged, especially following the pandemic, which encouraged remote participation.

• In the 2010s, fewer than five Canadian-headquartered companies typically joined each cohort.
• From winter 2020 to winter 2022, this number increased to between nine and 15 startups.

Y Combinator CEO Garry Tan highlighted the trend that Canadian founders often relocate to the United States, particularly after graduation from the program. Tan noted that Canadian startups remaining in San Francisco had a higher likelihood of becoming unicorns, achieving valuations of over $1 billion.

Voices from the Community

This migration trend was a hot topic at Toronto Tech Week’s Homecoming event in June 2025. Notable figures, including Shopify president Harley Finkelstein and Wealthsimple founder Mike Katchen, spoke against the “Valley-or-bust” mentality that they believe damages Canada’s startup ecosystem.

Furthermore, startups like Guelph, Ontario-based edtech company Opennote, which is part of Y Combinator’s Summer 2025 batch, exemplify the trend as they seek to grow with the support of U.S. investors.

As the Canadian startup landscape undergoes this transformation, it remains to be seen how founders will adapt to the new requirements set forth by Y Combinator.