Tale of two cities: Waterloo no longer sole hub of local tech sector

A job seeker looks at a brochure for the Kitchener-based software firm Desire2Learn at the Communitech Tech jobs + recruitment event in Kitchener on Wednesday, Nov. 13, 2013. (Geoff Robins / The Canadian Press)

Look out, Waterloo: Your next-door neighbour is hot on your tail.

While Waterloo has generally been synonymous with the burgeoning local tech sector, Kitchener has been asserting its own high-tech bona fides more and more over the past few years.

It’s an evolution Dan Silivestru has seen firsthand.

When he founded his first startup in 2009, he – like most others – chose to locate in Waterloo, near the University of Waterloo and the then-RIM campus.

Not long after, Silivestru’s Tiny Hippos was one of the first tech companies to make the move south to Kitchener, where Communitech was just starting to establish its hub at the newly renovated Lang Tannery.

“We found that the density of tech startups … was growing extremely fast,” Silivestru says.

“It offered us a great location, being just steps away from all of that.”

Fast-forward a few years, and Kitchener is no longer the upstart little brother of the relationship.

Big-name firms like Google, Motorola and Square have picked Kitchener over Waterloo, and once-small startups have grown out of the Tannery and into new digs elsewhere in the southern city.

Communitech CEO Iain Klugman calls the rise in Kitchener’s fortunes an “evolution of the ecosystem” that is Waterloo Region’s tech sector.

“There are a lot of people who always said ‘I want to be downtown, I want to be able to walk to restaurants, that’s the culture I want for our company,’” he says.

Those are precisely the thoughts that prompted Silivestru to stay in Kitchener for his newest venture, bitHound.

He sees pros and cons in both cities – proximity to restaurants and the Communitech hub in Kitchener, and ample parking and office space in Waterloo – which appeal to different sorts of businesses.

Another advantage Slivestru sees in Kitchener is its abundance of “brick-and-beam”-style old buildings, especially in contrast to what’s available in Waterloo.

“They’re pretty plain. They used to be cubicle farms,” he says of the buildings once owned by BlackBerry and now seeking new tenants.

Craig Beattie knows a thing or two about brick-and-beam architecture.

He’s a partner in Perimeter Developments, which has redeveloped the Breithaupt Block and other sites in Kitchener.

While he sees positive signs across the Waterloo Region market, he says a number of companies prefer the “vibrant, urban environment” on offer in downtown Kitchener.

“What we’ve seen … even in the last two years or three years, has been huge strides in terms of the number of companies downtown,” he says.

“They like the idea of being near and close to other tech companies.”

Klugman estimates that after years of a one-sided battle, Kitchener and Waterloo now attract about an equal number of high-tech tenants to their offices, with some even moving between the two cities.