The change means Canadian startups will have to be based in the US, Cayman Islands or Singapore to join the accelerator.
Y Combinator has revised the terms of its standard deal to exclude Canada as a permitted site of investment, meaning Canadian startups wishing to join the prestigious San Francisco-based startup accelerator will have to incorporate their companies elsewhere.
As first reported logic On Monday, Y Combinator’s standard deal terms webpage now states that it invests in corporations based in the United States, the Cayman Islands or Singapore. According to an archived version of the webpage, Canada was on that list as recently as November 2, 2025, but the reference was removed by the end of that month. Dozens of Canadian companies have been part of Y Combinator’s many winter and summer cohorts since they were first accepted in 2008.
The terms of the deal state that if a startup is already incorporated in another country that is not one of the listed “three” (formerly “four”) countries, the startup is required to “flip” its corporate structure to have a parent company in one of those three countries.
BetaKit has contacted Y Combinator for comment.
The gravitational pull of Y Combinator’s program on Canadian startups has increased in recent years, aided by remote policies instituted during the COVID-19 pandemic. In the 2010s, any given Y Combinator group typically contained fewer than five Canadian-headquartered companies, according to data collected last year by Bram Sugarman. Between winter 2020 and winter 2022, this number grew to between nine and 15 startups in the program.
Connected: Y Combinator is stealing Canadian startups
It’s common for Canadian founders to set up shop in the valley, especially after participating in Y Combinator. Gary Tan, CEO of Y Combinator, claimed in an
Tan said at the time that he was part of a YC dinner with several Canadian founders who wanted to base their startups in San Francisco after graduation.
One such company is Guelph, Ontario and Irvine, California-based edtech startup OpenNote. Co-founder Vedant Vyas, a member of Y Combinator’s Summer 2025 batch, told BetaKit last July that the firm hopes to expand out of the Bay Area, citing support from US-based investors and growing institutional willingness in the US to launch new edtech solutions.
This tug of war was the topic of conversation at Toronto Tech Week’s Homecoming event in June 2025, where Shopify president Harley Finkelstein, Wealthsimple founder Mike Katchen and Cohere founder Aidan Gomez encouraged the crowd to say no to leaving Canada.
“It’s this valley-or-bust mentality that breaks down the ecosystem and really hurts Canada,” Gomez said.
Image courtesy of Paul Miller, licensed under CC BY 2.0.
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