The Tech Factor

Are Canadian angel investors half as active as US angel investors? Some stats below, to reflect on this weekend: According to BDC, between 20,000-50,000 Canadians or organizations actively invest in startups. This is about 0.05-0.13% angel investors in Canada of the population (~39M). Simultaneously, according to the Center for Venture Research, there were 363,460 active angels in the US in 2021. This represents 0.11% of the US population (~333M). So population-wise, we seem to have sufficient angel investors in Canada. But: US angels invested US$29B in 69,060 startups in 2021. This would mean about 0.19 investments per investor and average US$420k per deal. As per National Angel Capital Organization (NACO) of Canada, its 4,200 members invested CA$166M in 379 companies in 2022. This is about 0.09 investment per investor at CA$438k per deal. So, prima facie, it seems that an active Canadian angel has half the investment rate of a US angel! Thoughts/experience? #Canada #US #angelinvesting #startups

Women in Tech: Ka-Hay Law, Pollinator Fund on impact investing in Canada Ka-Hay Law has been part of the impact ecosystem for about two decades in Canada and Africa. For well over a decade, she’s been actively making impact investments in Canada. Earlier she held various roles at the Lundin Foundation for nearly 10 years. Now as Partner at TELUS Pollinator Fund for Good, she continues to have a ringside view of the impact ecosystem and is one of the women leading the charge on impact investing in Canada. In this ‘Women in Tech’ interview, The Tech Factor speaks to Ka-Hay on her background, impact investing in Canada, and about female founders in the Canadian startup ecosystem. Ka-Hay Law was born and raised in a small blue-collar town in southern Ontario, surrounded by farmland. She graduated from the The University of British Columbia with a bachelor’s engineering degree in materials sciences in 2004. She started her career in the corporate social responsibility (CSR) area in Canada, but soon moved to Africa. There, she lived and worked in Ghana, Zambia and Kenya, on various roles in small businesses and impact investing, before relocating to Canada in 2010. She says - "I was drawn to the impact ecosystem, as it harnessed the ambitions of founders towards solutions that could be commercially successful and create meaningful change for our communities, our environment, our health.” On the growth of Canada's tech ecosystem, she highlighted - "Canada has always had good pockets of tech ecosystems that have produced significant global companies. Think Vancouver, Waterloo, Toronto, Ottawa. I’ve noted in the last 7-8 years, a significant increase in the depth of startups in each of these markets. And also the expansion into new hubs – Victoria, Calgary, Montreal." On being a woman founder or investor in Canada, Ka-Hay is optimistic - "There’s never been a better time to be a woman founder. There have also been really important initiatives in the industry to support women. Initiatives like Canadian Women in VC have been really instrumental in recent years in building a community and network of support for women in VC. Organizations like Cap Inclusive also do important work as they work with existing funds to help identify how a fund’s culture could better support diversity and inclusion. These would not have existed 10 years ago, and while there is still a lot of work to be done, there is progress to bringing more women into this industry.” Read the detailed interview with Ka-Hay Law in the link below. #WomenInTech #Canada #ImpactInvesting TELUS François Marchand Catherine Leclerc

Insurtech startup QuickFacts raises seed; users triple in a year: Halifax-based Canadian Insurtech startup QuickFacts has raised a CA$2M seed round. Sandpiper Ventures (Rhiannon Davies (she/her)) led the round in the software-as-a-service (SaaS) startup. In addition, other institutions like Killick Capital Inc. (headed by Mark Dobbin), InsurTech NY (David Gritz), and East Valley Ventures also invested in the seed round. Several individual angels have also participated, including Paul Hill, Neil Mitchell, Phil Gibson, and Donald Jacobi. Sandpiper Ventures had also led the company’s CA$1.13M pre-seed round just over a year ago. In fact, Killick Capital, Paul Hill, and Neil Mitchell had participated in the previous round too. Quickfacts had earlier graduated from Propel. Christy Barsalou (Silvestri) and Jeff Barsalou founded QuickFacts in late 2020. The company mentioned to The Tech Factor that the current seed round was oversubscribed. In little more than a year, QuickFacts has tripled its number of active users to reach 2,500 users and 100 brokerage clients. With the capital infusion, it intends to expand into the US and Quebec markets, after recently extending its reach throughout the Canadian Western provinces. Regarding the expansion plans, Christy mentioned why QuickFacts was optimistic about US. She said that the pain points for US brokerages were similar to Canada, just at a much bigger scale. With growing technology adoption, global Insurtech market can triple in five years to over US$32B, per Mordor Intelligence. More details in the article link. #Canada #InsurTech #startups #funding #SaaS #NovaScotia

Propel announces seven graduate companies in its Traction and Growth cohort: Propel, the Atlantic Canada-based virtual startup accelerator, has announced seven startups that recently graduated from its Traction and Growth program. This program works with entrepreneurs who have a proven product, generating over thousand dollars in monthly revenue, and are also full-time. Propel provides pre-revenue and revenue-generating startups with customized programming and mentoring through a series of cohorts held throughout the year. Last year, it commemorated its 20th anniversary of supporting tech entrepreneurs in Atlantic Canada. Propel is led by Kathryn Lockhart, Elaine McKinnon & Angela Hodgson. The seven graduates (in brief) are: 1. Three Hippies Inc.: Price Edward Island based and led by Gordie Noye (CEO) and Cleve Myers (CFO) - SaaS solution to solve ticket fraud. 2. Seathru Technologies Inc.: Holyrood, Newfoundland and Labrador based - tech for remote, real-time monitoring and maintenance of vital marine equipment. 3. Air Clarity Solutions: New Brunswick based & founded by Mike Rushton - innovative air filtration systems to reduce workplace industrial air pollution. 4. dependbuild: New Brunswick based and founded by Conor O'Brien and Tom Cooper - AI powered co-pilot for project delivery for municipalities and infrastructure developers. 5. AIR Institutes: Halifax, Nova Scotia based and founded by ⭐️ Dr. Jackie Kinley - coaching, education & training programs to build employee mental resilience. 6. iNav4U: Oxford, Nova Scotia based and led by Olivier Hendrikx (CEO) and Brenda Robinson (COO) - sophisticated yacht operating system using intelligent analysis of sensor data. 7. Remotecon: Nova Scotia based - cutting-edge sensors and communication solutions for ocean-tech. Details in the article in link below. #AtlanticCanada #startups #technology

Stripe Adaptive Pricing to help Canada firms sell better globally: Global payments giant Stripe has just launched its no-code Stripe Adaptive Pricing in Canada, alongside about 25 other countries globally. Some of the other countries & regions included in the launch are US, EU, UK, India, UAE, Japan, Australia and Singapore. Business from these countries can use Stripe Adaptive Pricing to let their customers in more than 150 countries pay using local currencies. The company has built Stripe Adaptive Pricing in a no-code form for businesses. Accordingly, users can enable Stripe adaptive pricing from their dashboards, without needing engineering chops. As per Stripe, checkout conversion continues to be a massive roadblock for online ecommerce businesses. In an interaction, Matthew B., Head of GTM at Stripe Canada told The Tech Factor that the average ecommerce conversion rates in ecommerce stores were around 2.5% to 3% only. Further, it highlighted that according to Statista, overall ecommerce conversion rate in Canada were even lower at just 1.9% in 2023. Against this backdrop, the launch of Stripe Adaptive Pricing intends to reduce the friction for international customers in making a purchase online. In terms of the positive impact of the Stripe Adaptive Pricing on conversion rates, the company said that it initially tested the product in UK, US, EU and Canada. It claimed that the product led to an average 17.8% uplift in cross-border revenue for businesses. It added that when given the option, 90% of customers chose to check out using their local currency. #Stripe #Fintech #Payments #Canada #Ecommerce

Clean tech firm Sustane Technologies Inc. gets new CA$950k grant: Halifax-based Sustane Technologies, a clean tech firm focused on waste management, has secured a CA$950k grant from Canada’s federal government via ACOA - APECA. The company focuses on municipal solid-waste diversion and repurposing through its 40,000 square foot plant located in Chester, Nova Scotia. The company claims that its innovative & patented technology can recover and reuse up to 90% of curb-side garbage. The company also produces synthetic naphtha fuel and fertilizer by recycling this waste. Peter Vinall, President and CEO of Sustane Technologies, said that this garbage, a lot of which is plastics, would otherwise typically go to the landfills. With this government grant, Sustane Technologies will create, test, and certify a synthetic naphtha fuel (gasoline) made from end-of-life and single-use plastics. It will market and export its non-combustible recycled fuel to petrochemical businesses. As a result, they can potentially utilize this fuel instead of fossil fuels to make new plastics. Overall, this circular supply chain converts waste into a marketable commodity, reducing carbon emissions and keeping it out of landfills. Vinall added that each year, its processing facility can recycle 70,000 tonnes through municipal solid-waste diversion & repurposing. In fact, this equates to its factory eliminating 216,000 tonnes of greenhouse gas (GHG) emissions annually. This is roughly same as removing 50,000 automobiles off the road and is almost 10% of Chester’s total carbon footprint, the company said. Gudie Hutchings | Robert Richardson | Fraser Gray #cleantech #climatetech #grant #government #Canada

In this July review, we discuss if the VC sentiment in Canada is turning a corner. Big news include: Clio & Cohere raise US$1.4B put together + Another interest rate cut. Read the detailed summary of the month in Canadian startup & tech space. #newsletter #canada #startups #VC #tech

US$500M Cohere Series D funding; Value doubles in a year: Canadian generative AI startup Cohere has raised a US$500M Series D funding round, valuing the company at US$5.5 billion, news broken by BNN Bloomberg. Canadian pension fund PSP Investments led the funding of the Toronto-based company. Cisco, Fujitsu, AMD VENTURES, LLC and Canada’s Export Credit Agency (EDC) are the other new investors in the company. This round effectively more than doubles the company’s valuation from last year, when it raised a US$270M Series C round. Montreal-based Inovia Capital had led that round, which had valued Cohere at US$2.1-2.2 billion. Cohere is now one of the biggest startups in Canada and one of the most valuable artificial intelligence companies in the world today. It’s part of a small group of businesses that are creating enormously complex LLMs from scratch, due in part to the high cost and difficulty involved. BNN Bloomberg added that Cohere now has hundreds of clients, including Oracle, Notion Labs, and TD Bank. Read more details in the link. #generativeAI #AI #Cohere #startups #funding

Clio’s Series F funding the largest ever in Canadian tech sector: Burnaby-based Clio - Cloud-Based Legal Technology has announced a behemoth US$900M Series F funding round. This makes it the largest-ever software fundraise in Canada’s tech sector till date. The company’s release mentioned that Clio’s Series F funding values it at over US$3 billion. New Enterprise Associates (NEA) has led Clio’s Series F funding round with a substantial cheque of over US$500M. Goldman Sachs Asset Management, Sixth Street Growth, CapitalG, and Tidemark are the other new investors in the round. Existing investors TCV, JMI Equity, OMERS, and advisory clients of T. Rowe Price have also participated in the round. Jack Newton, Founder & CEO of Clio, indicated on X that the round had significant secondary component to it. He said that the company wanted to ensure that it generated enough liquidity for early investors and employees. Further, he added that despite the secondary exit element, none of the investors have fully exited the company’s cap table. More details on the link. #legaltech #clio #funding #startups

Women in Tech: Kate Tomen, VP AIO on angel investors in Canada For the past six years, Kate Tomen has been a constant presence in the angel investment ecosystem in Ontario. As VP at Angel Investors Ontario (AIO), she has a front-row seat to the early-stage funding ecosystem in Canada. In this ‘Women in Tech’ interview, The Tech Factor catches up with Kate on her background, angel investors in Canada, and the role of women in it. Brief excerpts - On Canadian ecosystem: "There is a real collaborative spirit here in the Canadian tech ecosystem. It takes a village to raise a child but a community to raise a company. And I really think that sums up the tech ecosystem here." On angel investors in Canada: "The biggest difference between Canadian and US angel investors is simply speed. Americans move quicker and experiment more. Due to lack of exits, in Canada, we now have a preoccupation with them. When you try to overly plan towards exits, you create meaningless checkpoints. You find yourself trapped in that cycle, instead of focusing on building." On opportunity for Canada tech: "There's an exciting opportunity to build on our collective strengths. If we take a step back, focus on our strengths and knit together the provinces with more interprovincial collaboration, we can build something special and uniquely Canadian." Advice to women angel investors: "Angel investing is a team sport! Leverage your network and get involved with an angel group (shoutout to The Firehood). I think that goes for founders too – there is power in your network!” Read the detailed interview in the link. #angelinvesting #Canada #WomenInTech