The National Angel Capital Organization (NACO) has rolled out a new initiative backed by the Government of Canada geared towards helping entrepreneurs across Canada strengthen their networks.

The six-month program, which was announced at Toronto tech conference Elevate Festival on Oct. 3, matches Canadian founders with mentors that are relevant to their business and sector, drawing from a pool that includes senior leaders at companies like Interac, Loblaw Digital, National Bank, Porter Airlines, and WestJet, among others. 

“What we’ve done is we’ve created an environment where entrepreneurs that are accepted into the Fellowship program can build community, can build peer-to-peer support with each other, and also with senior business leaders that are relevant to their business,” NACO CEO Claudio Rojas told BetaKit in an interview.

Participants include Altitude Accelerator, Centech, DMZ, Invest Ottawa, North Forge, Platform Calgary, and Propel.

The program is powered by a network of angel investors, accelerators, incubators, and partners from across the country. Participating organizations currently include Altitude Accelerator, Centech, DMZ, Invest Ottawa, North Forge, Platform Calgary, and Propel. This group will nominate entrepreneurs for this program, and NACO and its advisors will review those nominations and select participants.

Rojas noted that the launch of this Fellowship is being funded by the Government of Canada through its Women Entrepreneurship Strategy. Going forward, he said the program will be financially supported by NACO partners and members across the country.

The entrepreneurs in the program’s first wave will be featured on Season 19 of Dragons’ Den. This group includes Hello Hair founder Anita Grant, Boardball co-founder Amanda Nguyen, Guess Where Trips founder Jess Off, Bold Helmets founder Tina Singh, Trèsolz founder Judy Stewart, Ryercat co-founders Samantha McConnell and Melanie Eng, Mint Cleaning co-founders Monika Scott and Robyn Mair, Lux Bio co-founder Paige Whitehead, Lash Artisan founder Michelle Bong, and Oraki founder Cynthia Savard.

The Fellowship recently kicked off with a full-day session for entrepreneurs and mentors to meet, followed by a reception with members of the broader community, and will involve additional gatherings every month, Rojas said.

NACO is Canada’s professional association for angel investors, comprising 4,000 angel investors and more than 100 organizations, including accelerators, angel groups, incubators, early-stage venture capital funds, and innovation hubs from across the country.

Feature image courtesy NACO.

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St. John’s, NL-based healthtech and software startup Sparrow BioAcoustics has closed $10 million in seed financing following recent regulatory approvals for its heart monitoring software.

According to a statement from Sparrow, the round was led by Atlantic Canada private equity firm Killick Capital, Klister Credit, and Newfoundland and Labrador-based venture firm Pelorus Ventures.

“The team at Sparrow pushed past numerous scientific, regulatory, and business obstacles to get to this stage.”

Mark Dobbin, Killick Capital

A press release issued by Sparrow this week indicated that the startup raised $13 million. However, CEO Mark Attila Opauzsky told Entrevestor Sparrow closed $3 million “a few years ago,” led by Killick, Klrister, and Pelorus, which reinvested $10 million more recently. BetaKit reached out to Sparrow and Opauzsky for more details on the round, but did not hear back before press time.

Founded in 2019, Sparrow has developed a software application, called the Stethophone, that turns smartphones into what it calls a medical-grade stethoscope. The app includes patented bioacoustics technology that it claims can make heart sounds clearer and more audible than medical stethoscopes.

Sparrow’s app allows users to hold their phone to their body, listen and record the sounds of their hearts, and store their examinations in the app. The company said the sound is digitally processed into spectrograms and oscillograms, allowing healthcare providers to zero in on concern areas or unusual sounds.

CEO Opauzsky previously led Toronto-based marketing tech startup PathFactory. In 2019, he almost lost his life to a sudden case of necrotic fasciitis, leading him to step out of the CEO role and focus on his health.

RELATED: PathFactory acquires fellow B2B marketing platform Uberflip in stock-for-stock deal

On its website, Sparrow said that in 2022 trials conducted at Eastern Health Medical Centre in Newfoundland, 67 percent of doctors reported that the informativeness produced by the Stethophone was better than the leading medical stethoscopes.

“In the last 100 days, normal everyday people successfully made 30,000 medical grade heart recordings,” Sparrow’s chief product officer Nadia Ivanova said in a statement. “People use the system with a 96 percent success rate on their first try.”

In 2023, the United States Food and Drug Administration gave the Stethophone clearance for use by both medical professionals and consumers in the US. The company also obtained health authority clearance in Ukraine this year. It is unclear whether the product is available in Canada. BetaKit has reached out to Sparrow for comment.

In June, the startup integrated artificial intelligence-based analysis into its app, which it demoed at this year’s Collision Conference. Opauzsky told Entrevestor the startup is now focused on building AI models that can detect variations in sound that could indicate heart disease. He said the startup is also focused on increasing the market adoption of the Stethophone.

“The team at Sparrow pushed past numerous scientific, regulatory, and business obstacles to get to this stage,” Killick Capital president Mark Dobbin said in a statement. “They have accomplished things that will lead to helping millions of people in a whole new way.”

Feature image courtesy Sparrow BioAcoustics.

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Elevate Festival 2024 closed out its third and final day in Toronto yesterday with seven Canadian tech startups earning a share of this year’s prize money.

Since its launch in 2017, Elevate Festival has consistently spotlighted Canadian companies through various competitions, and the 2024 event was no exception. This year, startups had the opportunity to pitch for over $275,000 in grant money and investment opportunities.

The Firehood upped the ante for the Elevate Women+ prize, committing $200,000 to women and gender-diverse founders.

One of the largest prizes up for grabs this year was the Women+ investment as part of the Elevate Women+ Entrepreneur Incubator, offered in partnership with The Firehood.

Initially announced as a $100,000 grand prize, The Firehood announced on stage that the Women+ competition had doubled that commitment to $200,000. 

The Women+ incubator comprises an eight-week program for women and gender-diverse founders to gain investment readiness skills, meet directly with investors, and earn the chance to pitch for the prize money.

The winner of this year’s $200,000 grand prize is Oakville, Ont.-based Nunafab. The startup, led by CEO and co-founder Cynthia Ene, is developing high-performance materials for the construction and manufacturing industry.

The runner-up prize of $25,000 went to Niagara, Ont.-based Infinite Harvest Technologies. The startup, led by co-founder Tamara Lockwood-Ortiz, has developed a process for the agrifood industry to deal with waste: using insects for bio-digestion of organic waste, it then harvests these insects as ingredients for the pet food, aquaculture feed, poultry feed and organic fertilizer markets. 

A third and surprise prize under the Women+ program was awarded to Montréal-based Oasis Learning AI, which is led by co-founder and CEO Karine Bah Tahé. The startup uses artificial intelligence to deliver personalized, scalable, and updated training programs for employees. Oasis Learning will receive $500,000 in AWS Activate credits, courtesy of AWS.

Athiya Rastogi, CEO of Toronto-based AI startup SnapWrite, won a $10,000 CAD grant from the eCommerce North Innovator Challenge. The challenge is a four-week competition that offers e-commerce startups the opportunity to pitch their startup in exchange for a grant. The competition, presented by Moneris, saw five founders pitch their solutions to a panel of judges and an audience of investors and ecosystem stakeholders.

SnapWrite has developed a platform that allows brands and retailers to automate product detail pages from images while enabling them to create a resale channel for their items.

RELATED: Healthtech startup Medreddie takes home the first Elevate Women+ Pitch Prize

On Day Two, Elevate named the three winners of the six-week Sustainable Changemaker Challenge, which sought out tech startups that are building solutions to cut greenhouse gas emissions to as close to zero as possible.

In first place was Dartmouth, Nova Scotia-based Aruna Revolution, which is developing plastic-free, compostable menstrual pads. The startup, founded by CEO Rashmi Prakash, is taking home $25,000 from the challenge. 

Toronto-based CERT Systems, which came in second place in the Sustainable Changemaker Challenge, won $10,000 for its electrochemical process that converts carbon dioxide emissions into high value chemicals.

The third-place winner was Burnaby, British Columbia-based NANOSentinel Technologies, which has developed a toxic metal monitoring system for clean energy OEMs and the critical minerals industry. The startup took home $5,000 from Elevate Festival.

“We’ve had lots of great news to share lately and I’m excited to continue building momentum,” NANOSentinel CEO and founder Viridiana Perez wrote in a LinkedIn post following the win. “Sustainability in mining is not going to happen overnight and we still have a lot of work to do.”

Feature image courtesy of Elevate.

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French business and technology consulting company Audensiel has acquired Montréal-based digital consultancy Maltem Canada for an undisclosed amount.

The deal, which closed last week, marks Audensiel’s first regional acquisition and comes roughly one year after it opened its Montréal office. It did so with the support of shareholder Sagard MidCap. In a statement, Audensiel said the acquisition gives it close to 100 specialists working under the Audensiel Canada banner. 

Marc Giraud-Sauveur called the deal a “logical and natural progression” that will allow Maltem Canada to grow in an international environment.

“This acquisition consolidates Audensiel’s position in Canada in the fields of digital transformation, cybersecurity, DevOps, and data,” Nicolas Pacault, founder and president of Audensiel, said in a statement.

“We are delighted to be working with the Maltem Canada team within the group, who are experts in serving major Canadian accounts. This partnership is perfectly aligned with our values and our strategic plan to expand our activities,” Pacault added.

Maltem Canada, founded in 2018, focuses on digital transformation for North American businesses. The company offers services under five key areas of expertise: agility, cybersecurity, customer experience, development, and data. On its website, the company said it is trusted by firms like Thales, Télé-Québec, Vosker, MDF Commerce, and Québecor.

“Joining Audensiel is a logical and natural progression that will allow Maltem Canada to expand its footprint within a high-performance international environment and continue offering excellent career prospects to its employees,” Marc Giraud-Sauveur, CEO of Maltem Canada, said in a statement.

An Audensiel spokesperson told BetaKit that Giraud-Sauveur will remain as the CEO of Maltem Canada and general manager at Audensiel Canada, and all of Maltem Canada’s employees have been moved to Audensiel.

Founded in 2013, Audensiel focuses on assisting businesses with their digital transformation initiatives. The firm has over 150 clients and specializes in data and artificial intelligence, the cloud, and cybersecurity. In a statement, Audensiel said it opened its Montréal office one year ago.

RELATED: Sagard hires Georgian’s Parinaz Sobhani as investment firm’s first head of AI

Montréal is a popular choice for French tech companies and investors setting up their international offices, thanks to the city’s strong cultural and linguistic ties to France. It also boasts a deep pool of tech talent, though it recently dropped from 12th to 15th in CBRE’s tech talent rankings. 

Sagard MidCap first announced it was in negotiations to invest in Audensiel for an undisclosed amount in 2022. The private equity fund, which has $2.9 billion CAD (€2 billion) in assets under management, according to its website, invests in the middle-market business services, healthcare, food and consumer, and industrial sectors. 

Sagard MidCap is one of the funds of Sagard Holdings, the global alternative asset manager that was created in 2002 and owned by the Desmerais family’s Power Corporation of Canada. Today, Sagard has offices in Montréal and Toronto, as well as the United States, France, and the United Arab Emirates. The firm recently appointed Parinaz Sobhani as its first head of AI to strengthen its in-house domain expertise.

Audensiel said its acquisition of Maltem Canada allows the company to tap into local expertise and strengthen its position as a go-to partner for large and mid-sized Canadian businesses.

Feature image courtesy Maltem Canada.

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Investor Deck is a six-article series presented by Sage, offering tips for SaaS startups from Canadian VCs. Read the previous installment here.

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‘Cut costs. Conserve cash. Get lean.’ 

For the past two years, these mantras have echoed across boardrooms as investors urge startups to pull back on growth and double down on unit economics.

“I feel like there are a lot of entrepreneurs that are not as encouraged to think bigger, and that’s just not good long term for any ecosystem.”

Until recently, Maria Pacella, Managing Partner at Pender Ventures, was admittedly one of those voices. But in the last few months, she’s changed her tune.

“Startups need to stabilize financially, yes, but cutting costs can’t be the only focus,” Pacella said. “They have to think about focusing on that long-term growth opportunity. That’s what really counts at the end of the day.”

Vancouver-based Pender Ventures seeks out these opportunities daily. While the venture firm, which counts Swift Medical, Jane, Drugbank, and Copperleaf in its portfolio, does look for strong unit economics, it also prioritizes companies with strong potential for scale, impact, and long-term resilience.

This focus on resilience is especially crucial now, as Pacella has watched founders get pushed to their limits over the past five years. From the chaos of the pandemic to the tech boom, AI frenzy, and now a bear market, constant upheavals and changing investor sentiment have worn entrepreneurs down and left many more cautious than ever.

The result for most companies is a fear of risk and a default to playing it safe. But Pacella is pushing back against this reluctance to invest in new growth opportunities. In her view, the real danger isn’t in taking risks—it’s in avoiding them altogether.

“As a founder, you have to have a lot of endurance,” she said. “Right now, I feel like there are a lot of entrepreneurs that are not as encouraged to think bigger, and that’s just not good long term for any ecosystem.”

Eric Sleeth, Senior Product Marketing Manager at Sage, believes that many companies aren’t properly set up to assess risk and reward.

“The market is evolving rapidly, with shifting interest rates, back-to-back election cycles in the US and Canada, and the rise of AI,” Sleeth said. “SaaS startups are being forced to make decisions on risks and opportunities very quickly, but the processes that they have in place to do so are very poor.”

Pacella watched one SaaS startup in her portfolio stay overly focused on its existing clients, avoiding risks and opportunities in adjacent markets. But as competitors adapted, the company missed out on deals that could have been theirs. This reluctance to explore new avenues didn’t just slow that company’s growth—it resulted in meaningful revenue loss for the business.

“You can’t be bogged down by slow processes when the market demands quick decisions.”

Pacella advises her portfolio companies to explore diversification by turning to their greatest resource: their customers. 

“One truism, regardless of the cycle you’re in, is if you have a maniacal focus on delighting the customer, you will do well,” she said. “And that doesn’t just mean having product-market fit.”

One of her portfolio companies misread a temporary spike in demand during the pandemic as market validation. The company funneled resources into sales and marketing, confident it had hit the mark, but as the pandemic-driven craze of 2021 faded, so did its customer retention.

Sleeth agrees that founders need systems to gather continuous customer feedback and ensure that teams like customer support and success have the data they need to truly understand their options and where to focus. 

Leadership, however, often lacks access to this data, which affects planning around  forecasting, spending, and growth. 

“Too many business leaders are flying blind, trying to make real-time decisions with data that’s months behind,” he said. “They’re missing growth opportunities because outdated systems can’t keep up with the pace of the market.”

Sage for SaaS & Technology plan was designed to help startups track real-time performance metrics. The platform centralizes data, automates processes, and speeds up the return on investment. The goal is to implement a system seamlessly so leaders can focus on good decision-making.

“Startups need real-time data and agile systems to steer the ship right now,” Sleeth added. “You can’t be bogged down by slow processes when the market demands quick decisions.”

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Discover how Sage Ahead empowers startups with SaaS Intelligence and real-time dashboards. Request a demo now. 

Photo provided by Maria Pacella.

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Halifax-based photography technology company Iris Booth is bringing on Shopify director Brandon Ghaeli to steer the business through its next phase of growth.

Ghaeli is taking the reins from Iris Booth founder and CEO Sue Siri, who is stepping down after a decade at the helm. Going forward, Siri will remain involved at the board level, where the photographer-turned-tech entrepreneur will continue to offer strategic guidance. Ghaeli is leaving Shopify this week and assuming leadership of Iris Booth on October 7. 

“We are thrilled to welcome a leader of Brandon’s calibre to Iris Booth.”

Ian Black, Rundle Partners

The leadership change comes shortly after Toronto-based Rundle Partners purchased a controlling stake in Iris Booth, which has built a profitable, growing business selling self-service photo booths and accompanying software to schools, companies, and healthcare institutions. Rundle and Ghaeli see room to leverage their learnings to help Iris Booth scale to another level.

“Stepping into a CEO role for a business that’s so exceptionally positioned for growth I think excites me quite a bit,” Ghaeli told BetaKit in an exclusive interview.

Ghaeli is a go-to-market (GTM) leader who has spent the last five years at Ottawa e-commerce giant Shopify, most recently as its director of global incubation sales. Previously, he was Shopify’s director of enterprise customer success for North America and head of revenue and merchant experience for Canada, among other roles. Before Shopify, Ghaeli spent over two years at Toronto food ordering and pickup app Ritual as director of inside sales.

Founded in 2015 by Siri, Iris Booth aims to make high-quality headshots more accessible and affordable for large institutions. Today, Iris Booth has hundreds of customers across North America, with 80 percent of its business from south of the border. The firm’s profits are in the single-digit millions and it has grown 80 percent annually for several years.

Led by former Shopify and Uber leader Ian Black, who serves as managing partner, Rundle seeks to buy small, profitable, high-potential, founder-owned Canadian tech and tech-enabled startups and grow them as their founders step back. 

Siri believes Ghaeli is the right successor. “The moment I read Brandon’s resume, I realized he was immensely qualified to step into the role,” Siri told BetaKit. “The moment I met him, I realized what a perfect fit he would be for the team!”

“We are thrilled to welcome a leader of Brandon’s calibre to Iris Booth,” Black told BetaKit. “Brandon has a track record of designing effective [GTM] strategies, as well as rolling up his sleeves to execute them. His experience bringing products to market, leading teams, and scaling businesses makes him an ideal fit for the next phase of growth at Iris Booth.”

Black and Ghaeli met while working together at Shopify, which was an early customer of Iris Booth. At Shopify, Ghaeli used Iris Booth’s product for the first time. “I remember even then that it was pretty obvious it was a world-class product [with] beautiful construction, quality materials, [and] the [user experience] and [user interface] was very strong,” he said.

Ghaeli said he was attracted to Iris Booth’s high customer satisfaction and retention rates, as well as its impressive operating discipline. “Sue has done a phenomenal job,” he added.

RELATED: “Gordon Ramsay doesn’t want to flip burgers”: Rundle acquires photography startup Iris Booth as founder prepares to step back

To date, Iris Booth has grown primarily via word of mouth and events. Iris Booth’s event division, which enables it to make money while also showcasing its product to other prospective customers, has been the startup’s only form of marketing.

Ghaeli sees “no need for a major transformation” of Iris Booth. However, he does see an opportunity to leverage his background in marketing and sales to bolster Iris Booth’s efforts on both fronts by shifting from inbound to outbound and building out a proper GTM function.

He hopes to accelerate Iris Booth’s growth in existing markets like education, and newer areas such as government organizations, targeting emerging use cases like security badges and government-issued identification as well as more global expansion.

“We do one thing really, really well, and that is, take the perfect headshot every time, and there’s a large runway to continue building a win-win partnership with our core customer base,” Ghaeli said. “But even more exciting than that is this opportunity that’s emerging in front of us to step into new customer bases.”

Feature image courtesy Iris Booth.

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Japanese IT services company Fujitsu has launched Takane, a Japanese-language large language model (LLM) powered by Toronto-based enterprise artificial intelligence (AI) startup Cohere. 

Fujitsu claims Takane has achieved industry-leading performance in multiple Japanese-language benchmarks.

The new LLM is a product of a partnership struck between the two companies earlier this year, in which the companies agreed to develop a Japanese LLM for private cloud usage. As a result, Fujitsu made “a significant investment” into Cohere’s $500 million USD ($687 million CAD) Series D round in July. 

According to Fujitsu, Takane is designed for enterprise use in secure private environments, such as the finance, manufacturing, and the security sectors, and will be integrated into its Kozuchi, data intelligence, and Uvance platforms. 

“We are very excited to bring Takane’s advanced Japanese LLMs to global enterprises,” Cohere CEO Aidan Gomez said in a statement. “Our partnership with Fujitsu accelerates AI adoption in this critically important market by offering secure, performant AI designed specifically for business use across Japanese and other languages.”

Cohere released Command R+, the LLM Takane is based on, earlier this year. The model had a focus on multilingual use, which Gomez said is “crucial for equitable utility of this technology” at the time. Studies have shown that LLMs are largely trained on English language data and, as a result, are less likely to understand other languages like Japanese. 

RELATED: Cohere and Float once again top LinkedIn’s Top Canadian Startups list

Fujitsu claims that, with additional training and fine-tuning, Takane has achieved industry-leading performance in multiple Japanese-language benchmarks language understanding, natural language inference, reading comprehension tasks, semantic understanding, and syntactic analysis. 

In a statement, Fujitsu said that characteristics of the Japanese language, including the mixed use of multiple character types, omitted subjects, and honorific expressions, have posed significant hurdles for general-purpose LLMs. The company added that an accurate Japanese LLM is important for the government, finance, healthcare, and law sectors where “minor language errors can have serious consequences.”

Cohere has become one of Canada’s largest AI players, having topped LinkedIn’s annual list of top Canadian startups for the second time last week. The list is based on the platform’s data on employee growth, jobseeker interest, engagement within the company and its employees, and talent attraction. 

Feature image courtesy Cohere.

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Toronto-based Koho Financial has raised a $190 million CAD round of debt and equity funding as it continues its efforts to secure a Schedule 1 banking licence. 

The $40 million equity financing was led by PROPELR Growth with participation from return investors Drive Capital, TTV Capital, and BDC Capital. New York-based Rockefeller Capital, founded by oil baron John D. Rockefeller, also participated in the round as a new investor. 

Eberhard said Koho is “meaningfully through” the second phase and expects to clear it by the end of next year.

PROPELR Growth managing partner Sanjiv Samant will join Koho’s board of directors as a result of the round.

Koho also secured an additional $150 million in debt through a credit extension that was provided in partnership with new and existing partners, the company said in a statement. 

The secured capital will be used to fund Koho’s growth, expand its lending book and product offerings, and support its effort to secure a Schedule 1 bank licence. 

In an on-stage conversation with BetaKit editor-in-chief Douglas Soltys at Elevate this week, Koho CEO Daniel Eberhard said that the company didn’t necessarily need the capital but wanted to create a buffer and keep its foot “on the growth pedal.” The credit facility also allows Koho to perform loans without using the capital on its balance sheet, an expensive process the company had been doing up to this point. 

“Our [bank licence proposal] says our lending book is going to be of a certain size, and our deposit base is going to be of a certain size, and we need to start building our way towards that,” Eberhard said. “This allowed us to do it without using our own capital, which would have been very expensive for the organization to go and raise $200 million of equity.”

Koho became transparent about its plans to become a bank earlier this year, shortly after it secured an $86 million Series D extension at the end of 2023. The FinTech firm had previously secured $210 million in February 2022. 

While Koho already provides a variety of bank-like offerings, including credit building, spending, and high-interest savings products, it has to rely on third-party partnerships with regulated players like Peoples Trust to deliver its financial products.

RELATED: Koho set to launch line of credit offering through partnership with Propel Holdings

As part of the Elevate panel, Eberhard and Koho chief banking officer Peter Aceto laid out the multiple phases of acquiring a banking licence. 

The first phase required Koho to outline its business plan with the Office of the Superintendent of Financial Institutions (OFSI). Koho has since moved onto the second phase, which involves planning policies and infrastructure in conjunction with OFSI, before it can move into a final audit phase. Eberhard said Koho is “meaningfully through” the second phase and expects to clear it by the end of next year.  

Despite being deep into the process, Eberhard said product velocity is central to the business, and Koho will prioritize that over a banking licence. 

“We’re trying to run this in a way where we stay really intellectually honest through the process, and if it doesn’t fit [Koho’s needs] in six or 12 months, or if we learn something where we say this is no longer the best path for the business, then we have to be prepared to pull up,” Eberhard said.  

RELATED: Koho rolls out reporting feature to help Canadian renters build their credit history

The FinTech firm has been rapidly rolling out features in recent months. In August, Koho launched a rent reporting and cashback feature, allowing users who pay rent through its platform to build credit history, as well as a tenant insurance offering through a partnership with Walnut Insurance. 

Last month, Koho announced an upcoming line of credit offering through a partnership with fellow Toronto-based FinTech firm Propel Holdings. The partnership will see Koho introduce and manage the line of credit as one of the core lending products in its app while Propel powers the technology, underwriting, servicing, and funding of the loans, which will range between $1,000 and $15,000, through its lending platform Fora Credit.

Koho has more new offerings coming soon, including a buy now, pay later tool that’s currently in beta and a travel insurance offering. 

Feature image courtesy of Elevate.

UPDATE (10/04/2024): This story has been updated with commentary from an Elevate panel featuring Peter Aceto and Daniel Eberhard.

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Toronto-based PocketHealth has launched new breast health tools that will provide personalized cancer risk assessments, eligibility alerts for mammograms, and mammogram booking support for its users. 

Launched on the first day of breast cancer awareness month, the tools aim to help detect cancer early and address gaps in breast cancer screening. 

A recent survey found that 73 percent of Canadians have not been screened for breast cancer at all. 

The healthtech startup, which closed a $45-million CAD Series B funding in March, created the new tools in response to the government of Ontario’s reduction in breast cancer screening age. In October 2023, the province lowered the eligibility age of self-referral for publicly funded mammograms from 50 to 40 beginning in fall 2024. 

Available first in Ontario, the new tools aim to help women aged 40 to 49 who are now covered by the Ontario Breast Screening (OBSP) program through the eligibility expansion and who may be booking a breast health exam for the first time. 

PocketHealth’s new breast health tools include a personalized risk assessment that calculates a person’s cancer risk score, screening eligibility alerts and reminders for mammograms, and a feature for booking mammogram appointments. 

A representative from PocketHealth told BetaKit that one of the tools uses natural language processing (NLP) to identify key terms in mammogram reports. It’s also designed to simplify complex medical terminologies to help users understand their breast cancer screening results. 

“Despite breast cancer being the most commonly diagnosed cancer among women, more than 40 percent of eligible women in Ontario have not been up to date on their mammograms over the past decade,” the company said in a news release. 

Studies have shown that there is a 99 percent five-year survival rate when breast cancer is caught early. However, many Canadians are not getting screened early. 

A recent Breast Cancer Canada survey has found that 73 percent of Canadians have not been screened for breast cancer at all. 

RELATED: Orpyx closes $26.9 million CAD in growth capital to fuel US expansion

PocketHealth’s new tools claim to help address these gaps in screening access and participation. 

Founded in 2016 by Citigroup alum Rishi Nayyar and his brother, former Google software engineer Harsh Nayyar, PocketHealth allows patients to access, store, and share their medical imaging records with doctors. 

The company raised $9.1 million CAD in its first funding round in 2020. In 2022, it secured $20 million CAD in Series A financing that was used to ramp up its presence in the United States (US) and add AI-powered tools to help users understand their medical imaging results. 

Two years later, in March 2024, PocketHealth secured a $45-million CAD Series B round that the company said would be used to continue investing in AI and expand its footprint across Canada and the US. 

“We want to get PocketHealth in front of every patient and every provider in North America,” PocketHealth co-founder and CEO Rishi Nayyar told BetaKit in a previous interview.

Feature image courtesy PocketHealth.

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The United States (US) Department of Defense (DoD) has awarded $12.9 million ($17.8 million CAD) to Burnaby-based battery materials company Nano One.

Nano One offers a processing technology for lithium iron phosphate (LFP) to produce the high-performing battery materials used in electric vehicles, energy storage, and consumer electronics. The company claims that, as opposed to other battery material processing techniques, its processes eliminate sodium sulfate by-products, require less water and less energy, and produce more durable battery cathodes. 

The DoD grant will go towards expanding its research and development efforts as well as the production capacity at Nano One’s Candiac, Québec plant, which the company claims is North America’s only LFP production facility. Nano One said the project supports product validation and potential sales with customers that include suppliers to the US government.  

“Shoring up domestic production capabilities across key nodes of the large-capacity battery supply chain is essential for meeting growing battery demands,” Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale said in a statement. “This award is another important advance towards increasing the availability of safer, lower-cost, and longer-lasting battery materials, which will strengthen US national security.”

RELATED: Lithium-ion battery developer UgoWork closes Series C funding to expand HQ, production facility

The funding comes from the DoD’s Defense Production Act Investments program, which uses funds earmarked by the US Inflation Reduction Act to expand support for the domestic production of critical materials in key supply chains. According to the DoD, Canada has been considered a domestic source of materials and thus eligible for Defense Production Act funds since 1992.

The DoD added that LFP has “considerable advantages” for military applications, including high-power and safety characteristics, and that all LFP inputs can eventually be sourced in North America, reducing reliance on foreign sources.

Nano One acquired the Candiac production facility along with its team in 2022 to pilot and demonstrate its LFP process at a commercial scale. The company said its long-term plan is to license and deploy its LFP battery materials globally, and to diversify its revenue streams with licensing fees, engineering services, equipment procurement, and sales from its Candiac plant. 

Feature image courtesy Nano One. 

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Payfare is initiating a strategic review of the company after losing the business of its largest customer.  

Payfare claims it is “well capitalized to fund ongoing operations and new strategic initiatives.” 

The Toronto-based earned wage access (EWA) company announced last week that DoorDash had decided not to renew its agreement with Payfare, which was powering the food delivery app’s DasherDirect program. Payfare called the prepaid debit and mobile banking app for DoorDash’s delivery workers its largest program, adding that the revenue derived from the program was a “substantial proportion” of its total revenues. 

As a result, Payfare withdrew its previously issued 2024 financial guidance for revenue and earnings. In response, the price of Payfare shares on the Toronto Stock Exchange (TSX) plummeted from $8.35 CAD to $2.00, a more than 75 percent reduction. It is the lowest that Payfare has ever been valued in the public markets. 

The shareholder response prompted Payfare’s board to engage with legal and financial advisers to launch a strategic review of the company’s options. 

“This review process will assess strategic alternatives that may include, but are not limited to strategic partnerships, strategic investments, accretive acquisitions, a potential sale, merger or other business combination,” Payfare said in a statement released Sunday night.

RELATED: Lightspeed confirms strategic review of business as company reportedly explores sale

The company said there is no deadline or definitive timetable for the strategic review, and that there are no guarantees the review will result in any transactions or outcomes. The company also claimed it has over $100 million in cash, cash equivalents, and guaranteed investment certificates, and that it is still “well capitalized to fund ongoing operations and new strategic initiatives.” 

“Although the loss of the DasherDirect program will have a substantial impact on the Company’s revenue profile, Payfare intends to right size its operating expenses to align with the near to mid-term reduction in revenues while providing the flexibility to execute on new business and initiatives to build long-term value,” the statement reads. 

Payfare’s EWA offering looks to provide gig workers with a way to access their earnings more quickly, rather than wait for a payday, as well as cashback rewards. Earlier this year, Payfare announced a long-term extension of a similar partnership with Lyft. 

The company said Payfare and DoorDash will establish a transition plan in the fourth quarter of 2024, and  that it will continue to support the DasherDirect program and its cardholders until the agreement ends in early 2025.

Feature image courtesy DoorDash. 

The post Loss of DoorDash partnership prompts Payfare share price plummet and strategic review first appeared on BetaKit.

Calgary-based digital therapeutics startup Orpyx Medical Technologies has closed $26.9 million CAD ($20 million USD) in growth capital to expand its diabetic foot ulcer prevention product south of the border.

The financing, which closed in July, came exclusively from New York-based Perceptive Advisors, which invests in life sciences companies and has also invested in fellow Canadian company Fusion Pharmaceuticals.

“This partnership allows us to accelerate our commercial efforts in delivering life-changing solutions to patients and healthcare providers.”

A spokesperson for Orpyx told BetaKit that Perceptive is a new investor in the startup but declined to disclose whether the round included any secondary capital or venture debt.

In a statement, Orpyx CEO and founder Dr. Breanne Everett said the new funding will support the startup’s goal of saving limbs and preventing debilitating foot complications for those living with diabetes and neuropathy.

“This partnership allows us to accelerate our commercial efforts in delivering life-changing solutions to patients and healthcare providers, ultimately improving outcomes for those most in need,” Everett added.

According to a 2019 study in The Lancet, one quarter of people living with diabetes develop foot ulcers over their lifetime, and one in five of them experience complications that lead to amputation. A 2016 study indicates that 85 percent of diabetes‐related lower extremity amputations are preceded by foot ulcers.

Orpyx has developed a solution aimed at preventing diabetic foot ulcers, using shoe-based sensor technology to help people with diabetes stay mobile. 

Orpyx operates primarily through a B2B model, targeting healthcare providers, clinicians, and organizations that specialize in diabetes care and wound management. The startup partners with podiatrists, orthotists, diabetes specialists, and wound care clinics to distribute its technology. Orpyx also markets its products directly to individuals living with diabetes who want to manage their foot health.

RELATED: Amplitude Ventures, Gates Foundation lead Radiant Biotherapeutics’ $35-million USD Series A

Orpyx introduced its Sensory Insole system in 2020. The tool offers real-time feedback for diabetic patients and individuals with foot numbness to help prevent diabetic foot ulcers. The system tracks foot pressure, temperature, and movement using sensor-equipped custom insoles, delivering audiovisual alerts and offloading guidance to smartphones and smartwatches when it identifies a potential risk of foot injury.

The startup was founded in 2010, and it has previously raised capital from Calgary-based Paddock Capital, as well as Aphelion Capital, Thin Air Labs, InterGen Capital, and Relentless Venture Fund.

Orpyx’s spokesperson said over the last year, the startup has been focused on gaining commercial traction in the United States, which includes expanding in the veteran affairs market and engaging with more commercial payers. The company has offered its product in the US market since 2020, and more recently, initiated partnerships with the Veterans Health Administration and US health plans.

The spokesperson noted that Orpyx’s offering has been prescribed to thousands in the US in Canada, but declined to share specific numbers. They stated that the new capital will be used to fuel Orpyx’s expansion in the US, focusing on both the veterans affairs sector and commercial payers.

Feature image courtesy Orpyx via Facebook.

The post Orpyx closes $26.9 million CAD in growth capital to fuel US expansion first appeared on BetaKit.

How do you make sure your tools can scale as fast as your business?

Zoho believes the answer is simple: grow together.

That’s the focus of Zoholics Canada 2024, Zoho’s flagship user conference taking place at Montréal’s Palais des Congrès from October 8 to 9. The event will bring Zoho users, industry leaders, and tech experts together for two days of learning about how Zoho has evolved its products to meet the evolving needs of businesses.

“These conversations are critical to shaping our strategy and ensuring we’re meeting real demands on the ground.”

Zoho offers a suite of cloud-based software tools designed to help companies of all sizes streamline their operations, from managing customer relationships to handling finances, marketing, and human resources.

Now in its sixth year, Zoholics Canada is set to explore the trends that have shaped Zoho’s platform over the past 12 months.

Chief among these, according to Zoho Canada Managing Director Chandrashekar Lalapet Srinivas Prasanna (LSP), is showing users how they can navigate their next phase of growth with Zoho’s tools.

“I think the biggest takeaway from an event like this is to gain an understanding of how Zoho can help them scale,” LSP said.

In 2018, Zoholics’ debut year in Canada, nearly 80 percent of the conference attendees had been using Zoho for just six months to two years. Today, more than half of Zoholics Canada’s collective attendees have relied on Zoho for three to ten years, which LSP believes reflects a deeper, long-term engagement with the platform.

“Our customers’ needs have changed,” LSP said. “As a business owner or senior leader, you need to understand how these tools fit into the stage you’re in. For companies that have been using Zoho for three to ten years, they’ve already gone deep into the platform, so the conversations at this stage will be much more focused.”

Zoholics will feature seven curated content tracks covering sales, finance, analytics, human resources, and more. Attendees will get an inside look at what’s coming next on Zoho’s product roadmap, join learning sessions led by Zoho leaders, and hear real-world stories from customers about how they’re using Zoho to optimize their businesses for growth.

One of the highlights of the event is the Experience Centre, where attendees can talk face-to-face with product owners and experts and network with customers and implementation partners. During the conference, attendees can also book time with Zoho’s leaders, product experts, managers, customer support reps, and sales teams to share their thoughts on Zoho’s offerings and get their pressing product questions answered.

“This creates a beautiful feedback loop,” LSP said. “Our roadmap hinges upon these interactions.”

LSP sees this as the core of Zoholics Canada: bringing Zoho and its users under one roof to better understand what the market needs and how Zoho can deliver.

“As much as we’re here to show what we’ve built, this is also about learning how we can better support our users,” LSP said. “These conversations are critical to shaping our strategy and ensuring we’re meeting real demands on the ground.”

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Ignite your business potential with Zoho’s cutting-edge tools. Master key strategies, connect with experts, and transform your processes for real growth.

On Oct. 8 & 9, Zoholics Montreal is where you’ll gain insights to optimize workflows, improve customer engagement, and make data-driven decisions that propel your success. Click here for tickets.

All images provided by Zoho.

The post What to expect from Zoholics Canada 2024 first appeared on BetaKit.

The first close of Toronto-based GreenSky Ventures’ sixth fund puts it in the 99th percentile of all Canadian venture capital (VC) firms over the past decade.

The early-stage VC firm announced a more than $15-million CAD first close of Fund VI from a group of limited partners (LPs) that includes undisclosed family offices and high-net-worth individuals, many of which are returning. 

“We do think that if we can minimize the number of failures, that’s one way you could really contribute to growing attractive long-term returns.”

Marian Hoffmann, GreenSky

GreenSky ultimately aims to raise a total of between $20 million and $25 million by the end of 2024 for its sixth fund, which it expects to be its largest to date, topping its $21-million Fund V.

Reaching a sixth fund puts GreenSky in some rare company. According to recent research from RBCx, only one percent of Canadian VC firms have graduated to a sixth fund (excluding all opportunity, continuity, and alignment funds) over the last 10 years.

GreenSky managing partner Marian Hoffmann believes the firm has gotten to this point—and done so amid such a tough VC fundraising environment—thanks to its consistent strategy, team continuity, and performance.

Fund VI will look a lot like GreenSky’s prior funds, with a focus on investing in Canadian business-to-business deep technology and enterprise software startups at the seed and Series A stages and building a concentrated portfolio of eight to 12 companies that fit this bill.

“We’re really proud of the results that we’ve been able to generate following this strategy,” Hoffmann told BetaKit in an exclusive interview. “We’ve been doing it for almost a decade now, so [we’re] just going to keep doing what we’ve been doing.”

GreenSky was founded in 2010 by managing partner Mike List as a company that primarily invested its own capital and money drawn from its immediate network, and took equity from businesses in exchange for advisory services, including help fundraising. In 2015, GreenSky transitioned away from this advisory model with the launch of its first fund. Since then, GreenSky has focused on backing early-stage Canadian tech startups, raising smaller VC funds from LPs more often (typically once every two years) than many of its peers.

Hoffmann, who joined GreenSky last year for Fund V, will co-lead GreenSky’s investment efforts for Fund VI alongside List and partner Neil Peet.

RELATED: GreenSky expands team, secures $17-million first close of Fund V as firm sees opportunity amid the downturn

Including this initial $15 million for its sixth fund, GreenSky has now raised a total of approximately $70 million to date. Broken down by fund, that is: Fund I ($3.1 million), Fund II ($5.1 million), Fund III ($8.4 million), Fund IV ($17.2 million), and Fund V ($21 million), which GreenSky finished deploying a few months ago.

Across its six funds to date, the VC firm has invested in 31 Canadian tech startups in total including Captain AI, Direct-C, Funnelytics, Mesosil, Micharity, Mission Control, Ontopical, PhenoTips, ProNavigator, Pulse Industrial, Symboticware, and WiseDocs.

GreenSky’s Fund VI LPs include ex-Research in Motion chief information officer and Virgin Mobile Canada CTO Valdis Martinsons (who now works as GreenSky’s chief technologist) and former Ontario Teachers’ Pension Plan investment committee chair Bill Chinery (who now sits on GreenSky’s investment committee).

“I met GreenSky when we were separately pursuing an early-stage tech investment,” Chinery said in a statement. “GreenSky’s diligence process so impressed me that I joined the investment committee. My early-stage investment portfolio is now run exclusively through GreenSky.”

RELATED: Mesosil secures $2.2 million to develop infection-fighting biomaterials for medical devices

Hoffmann acknowledged that the fundraising process has been slow for GreenSky, but said things “felt far worse” when it set out to raise Fund V in late 2022. Given GreenSky’s past performance and the interest it has seen to date, including a high degree of support from existing backers, Hoffmann is confident the VC firm will hit its Fund VI target later this year.

After many LPs invested heavily in Canadian VC when the market was hot, investors have become more cautious and selective amid the tech downturn, which has led to smaller funds and longer fundraising timelines for the VC firms that invest directly in Canada’s tech startups. According to RBCx, the first half of this year put 2024 on pace to see the fewest total dollars allocated to Canadian VC funds in a decade. Since then, things have picked up a bit with Radical Ventures’ $800-million USD AI growth fund among other recent VC fundraises.

“We’re lucky enough that we’ve been able to continue to have exits [and] return capital to our investors,” Hoffmann said. As GreenSky’s fourth and fifth funds are so recent, Hoffman pointed toward data on the performance of the VC firm’s first three funds. 

Across this group, GreenSky claims that as of June 2024, all of the firm’s portfolio companies have raised follow-on funding, its DPI is 212 percent, its annualized internal rate of return (IRR) is 26 percent, and its total value to paid-in capital (TVPI) is 2.9x. This includes four exits, including Akira Health, Cyclica, Mirexus Biotechnologies, and Rank Software, and only one company failure.

Cyclica was acquired by American biotech Recursion last year for more than $53 million. GreenSky received shares in Recursion, which it held for a period and then sold for a profit in what Hoffmann described as a successful exit.

GreenSky’s performance has steadily improved with each of its first three funds according to data shared with BetaKit. For Fund I, the firm has posted 88 percent DPI, 7 percent IRR, and 1.79x TVPI. With Fund II, GreenSky has generated 183 percent DPI, 20 percent IRR, and 2.49x TVPI. For Fund III, GreenSky has posted 277 percent DPI, 63 percent IRR, and 3.61x TVPI.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

According to a recent BDC report on Canada’s VC landscape, those DPI, IRR, and TVPI figures for GreenSky’s second (2017 vintage) and third (2019 vintage) funds place the firm beyond the upper quartile of Canadian VC funds from that timeframe in terms of performance. BDC reported that the average upper quartile DPI, IRR, and TVPI for funds from this period was 37 percent, 12.7 percent, and 1.37x, respectively. 

Perusing Carta’s recent VC fund performance report shows that GreenSky’s metrics also appear competitive with US VC funds of the same vintage.

Hoffmann views GreenSky’s focus on deep tech companies, which typically develop products based on significant scientific or engineering innovations that can be tougher to evaluate than conventional software solutions, as a differentiator relative to other Canadian VC firms. She noted that GreenSky has been investing in deep tech for close to a decade and successfully exited multiple startups in the space, including Cyclica.

She also believes GreenSky’s alignment with its LPs—by being “heavily invested” alongside them—has been beneficial: across its first five funds, approximately 25 percent of invested capital came from the GreenSky team and family members.

RELATED: Fading 2023 VC performance underscores Canadian tech market’s “vulnerability,” BDC reports

For Fund VI, GreenSky has brought on former Verstra Ventures associate Justin Dunnion as senior associate to source deals and assist with due diligence. Hoffmann noted GreenSky is also shifting to doing one capital call this year, one in 2025, and one in 2026. “In our investors’ minds, it can be like, ‘Okay, that’s our allocation to VC for the next couple years,’” she said.

GreenSky plans to write $1.5-million to $2-million initial cheques for Fund VI, out of which it has already made four investments, backing Botni.vision, Brickeye, Edgecom, and Ethica Channel Enablement.

Hoffmann said GreenSky also recently exited a company she declined to name from its fourth fund for a return just above the amount it invested after that investment did not go as planned and it was approached by another VC that wanted to buy its stake. While this outcome was not the “home run” the firm initially sought, Hoffmann said it also wasn’t a failure, arguing that it illustrates the approach GreenSky has taken to managing its portfolio.

“Venture is a very bifurcated investment profile, where you get [a] few big wins and then most else [are] failures, but we are not just focused on getting the really big wins,” Hoffmann claimed. “We do think that if we can minimize the number of failures, that’s one way you could really contribute to growing attractive long-term returns.”

Feature image courtesy GreenSky Ventures.

The post GreenSky’s $15-million first close of Fund VI puts VC firm in rare company first appeared on BetaKit.

What does the future of tech look like on Canada’s Best Coast? That’s the question I’ve been asking myself in the run-up to our BetaKit Town Hall in Vancouver. 

Taking place on October 22 at UBC Robson Square, the event will be headlined by a fireside chat with Clio CEO Jack Newton. Clio just raised the largest software funding round in Canadian tech history on the back of $200 million USD in ARR, international expansion, and smart forays into FinTech and AI. Jack is a passionate and forthright speaker, and I know he’ll deliver the goods to founders looking for tips on how to build with ambition.

But back to the question up top.

Our first Town Hall also featured the CEO of a leading Canadian tech company holding court, but that wasn’t really the point. BetaKit is a vibes-powered publication, and back in May, the vibes were most certainly off. So in pulling together a pulse check on Canadian tech, we made sure to include a variety of vantage points—with the highlight of the night perhaps being a 22-year-old University of Waterloo student telling the assembled room their hiring practices sucked. Sources could not confirm nor deny if this prompted Shopify to revamp its internship program, but I’m taking the win. 

So how are the vibes in Vancouver? The recent PitchBook Global VC Ecosystem Rankings placed Vancouver 77th, behind Calgary, Ottawa, Toronto, and Montréal—and near dead-last for growth. In response, one longtime ecosystem player said “I haven’t felt BC this lethargic and pessimistic for 20 years,” which seems bad.

But that’s only one perspective. I reached out to Toki Hossain, founder of Vancouver.dev, one of the minds behind Vancouver Tech Week, and a crazy person who flew to Toronto for our last Town Hall. A newcomer to the city, he believes the local tech scene is “on fire,” but noted: “we’re all living in a silo in Vancouver.” A collaborator by nature, he’s hoping we can connect multiple generations of BC tech, both “the OGs and the newcomers.”

Town halls are designed to give a community the space to show up and hash out its problems. So who else should speak? What should they talk about? Are you coming? Let me know.

Douglas Soltys
Editor-in-chief

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Zoho’s flagship event is back!

Ignite your business potential with Zoho’s cutting-edge tools. Master key strategies, connect with experts, and transform your processes for real growth.

On Oct. 8 & 9, Zoholics Montréal is where you’ll gain insights to optimize workflows, improve customer engagement, and make data-driven decisions that propel your success.

Click here for tickets.

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Former CVCA chair alleges CEO Kim Furlong “appeared unwilling or unable to advocate” for membership in meeting with foreign LPs

Former Canadian Venture Capital and Private Equity Association (CVCA) chair and Lumira Ventures managing partner Peter van der Velden has publicly criticized CEO Kim Furlong for her handling of a meeting with international limited partners (LPs) in London, UK.

In a September 20 LinkedIn post, van der Velden alleged that “This event had 1 purpose, build engagement & attract foreign capital to CDN VC GPs & companies, & the CVCA CEO just threw the entire sector under the bus.”

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Lightspeed confirms strategic review of business as company reportedly explores sale

In response to recent media reports that the company is exploring a sale, Montréal-based Lightspeed Commerce has confirmed that it is currently conducting “a strategic review of its business and operations.”

The payments technology company announced that it periodically undertakes such reviews “with a view to realizing its full potential.” As part of this process, Lightspeed said it “has engaged, and may continue to engage, in discussions relating to a range of potential strategic alternatives” but did not elaborate on what those options might include.

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Cohere and Float once again top LinkedIn’s Top Canadian Startups list

The list is based on the platform’s data across four key pillars: employee growth, jobseeker interest, engagement within the company and its employees, and how well these startups have attracted talent from the companies in the 2024 Best Workplaces list.

For this list, only fully independent, privately held companies headquartered in Canada were considered. Companies must also have at least 30 full-time employees and be five years old or younger to be considered among other startups.

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Months-long dispute between Bitfarms and Riot Platforms draws to a close as companies reach settlement

The public dispute between Toronto-based Bitcoin mining company Bitfarms and its investor and competitor Riot Platforms is finally drawing to a close, as both companies have entered into a settlement agreement that includes key changes to Bitfarms’ board.

As part of the settlement, which was filed with the United States Securities and Exchange Commission today, director Andrés Finkielsztain has stepped down from Bitfarms’ board. Bitfarms has appointed Amy Freedman to its board and its governance, nominating, and compensation committees.

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The Comeback

Read “The Comeback,” a three-part series presented by Motion, chronicling the journey of one team’s search for a good problem, and the lessons learned along the way.

Part One reveals how adtech startup Shoelace found itself on the edge of collapse. Part Two explores how the team pivoted and then zeroed in on a high-priority problem to build Motion. Part Three sets out how Motion developed a new product and quickly gained momentum.

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It’s not the technology, it’s what you build with it

Trust, speed, and security.

Those were the selling points discussed on Tuesday at BetaKit Talks: You Don’t Know Crypto – presented by WonderFi, an event that assembled CEOs and builders in the crypto space to discuss the applications of their work for the broader technology sector.

“When people think of crypto, they typically think of trading, but there’s so much happening beyond that,” said Dean Skurka, CEO of WonderFi, which co-hosted the event. “There’s a real crossover between what we’re building, and what the tech community needs to solve their problems with innovative solutions.”

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SAAS NORTH gets real

Get ready for tech to get candid at the SAAS NORTH conference on November 13-14, 2024, at Ottawa’s Shaw Centre. BetaKit is proud to support Canada’s go-to event for scaling SaaS founders and startups, a staple in the Canadian tech scene since 2016.

And this year’s BetaKit Keynote Stage is about to serve some tea, with speakers Marie Chevrier Schwartz, Andrew McLeod, and Martin Basiri stepping into the spotlight to provide a rare glimpse into the realities of failure, determination, and innovation in SaaS.

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Ready to Elevate your IP?

ElevateIP is here to help startups strengthen the development, understanding, and protection of intellectual property (IP). Powered by an investment from the Government of Canada, this program is designed to help you maximize your IP potential and stay ahead of the competition.

Communitech, alongside Invest Ottawa and North Forge, proudly delivers ElevateIP to startups across Ontario, Manitoba, and Saskatchewan. Ready to level up your IP strategy?

Learn more and get involved today!

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Funding, Acquisitions, and Layoffs

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VAN – Pangaea Ventures – $115M CAD
TOR – Cyclic Materials – $71M CAD
CAL – Ayrton Energy – $9.1M CAD
WR – Scribenote – $8.2M USD
TOR – Nmbr – $7.6M CAD
OTT – Bemi – $1.2M CAD
TOR – LumiQ – strategic investment from Vertu Capital
TOR – Propel Holdings to acquire QuidMarket

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The BetaKit Podcast

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What Canada can learn from AI use in South Africa

“How do we collect data so that we give it in the hands of the government in an efficient way? We’re in a democratic country. Isn’t this data supposed to inform the government?”

Raesetje Sefala, research fellow at The Distributed AI Research Institute (DAIR), joins to discuss her work analyzing the impacts of South African apartheid using computer vision techniques and satellite imagery. Recorded live at ALL IN in Montréal.

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The SAAS NORTH Agenda is LIVE!

Get ready for Canada’s biggest in-person SaaS community event, featuring a tactical agenda packed with in-depth sessions designed for founders, investors, and teams. Explore actionable strategies to scale your SaaS business and hear from Canada’s most successful CEOs.

Don’t miss out on this incredible opportunity to grow, learn, and connect at SAAS NORTH!

Feature image courtesy Pexels.

The post Is BC tech “lethargic” or “on fire?” first appeared on BetaKit.

A series of conversations that sprung from one question soon evolved into a vibrant community of more than 340 Indigenous tech leaders, founders, and professionals spread geographically across Turtle Island. 

The Indigenous Tech Circle, which officially became a non-profit entity on National Indigenous Peoples Day (June 21st, 2024), now includes hundreds of members spread across the United States (US) and Canada. The group has monthly meet-ups and workshops, weekly intro sessions for new members, and curated teams within the circle for people working in similar companies or founders at similar stages of growth. 

“It used to be lonely being Indigenous in tech,” Indigenous Tech Circle founder Ryan St. Germaine told BetaKit in an interview. “For example, the first time Jeff Ward (CEO of Animikii) went to a Collision conference, he was the only Indigenous person there that he could find,” he shared. 

“Getting involved with great tech companies and having positions of influence, I think that will create systemic change.” 

Ryan St. Germaine
Indigenous Tech Circle

The serial entrepreneur, tech founder, and member of the Métis Nation of British Columbia also told BetaKit about another member, a software developer from Montana who—lacking someone to talk to about technology in his community— would start a conversation with ChatGPT. “Now he can connect with us,” St. Germaine said. 

The journey to organizing the Circle started with one question: where are the Indigenous tech people? 

“A lot of folks said to me there aren’t any, to which I respectfully responded ‘That’s bullshit’,” he shared. 

Wanting to connect with his Indigenous roots, St. Germaine went off to find and reach out to other Indigenous tech founders, entrepreneurs, and CEOs from Indigenous-led tech companies. “A core group of us started to come together, and then more folks started to come in,” he said. The initial circle of Indigenous founders and professionals continued to meet informally throughout the pandemic on a Slack channel. The Indigenous Tech Circle has now grown to include more than 340 members. 

For many, St. Germaine said, it’s difficult to show up as their whole selves, so the Indigenous Tech Circle is a space where they don’t have to explain themselves or what it means to be Indigenous in tech. 

“I think having a safer place where Indigenous people can show up and collaborate and ask, ‘how can we move things forward for us in a way that makes sense for us?’ is important,” he explained. “To be able to show up in that space with others is incredible.” 

Asked about the challenges faced by Indigenous peoples in tech, the BC Jobs co-founder said it all boils down to biases and systemic barriers. 

“We have less than one percent representation within the digital workforce and only .004 percent of VC investment goes to Indigenous-led companies,” St. Germaine said, adding that only .9 percent of Indigenous people are represented on executive boards. While he stresses that there are Indigenous people in tech, he said there are still not enough people in positions of power and influence. 

RELATED: Canadian tech must embrace Indigenous reconciliation

A study from the Toronto Metropolitan University’s Brookfield Institute for Innovation and Entrepreneurship has found that only 2.2 percent of the overall Canadian tech workforce is Indigenous. BDC Capital has found similar data when surveying Indigenous-owned venture firms.

“The problem is there’s a general mistrust,” he declared. “There’s been systemic racism, and it would be ridiculous to pretend that there hasn’t been.” 

According to St. Germaine, the bias in the existing system has made it challenging to grow the participation and representation of Indigenous people in tech. “I think there’s bias in our system, and there’s just a general mistrust of financial institutions, of academia, of governments, on the Indigenous side of things,” he said. “Huge systems suck. Trying to move them is brutal.” 

He added, however, that building meaningful businesses will be more effective in breaking down barriers than just “yelling at the problem.” 

“Getting involved with great tech companies and having positions of influence, I think that will create systemic change,” he explained. “I have definitively proven that it is bullshit [to say] that there are no Indigenous people in tech. We are here. We are succeeding. We have succeeded, and we need help to create the flame.” 

Images courtesy the Indigenous Tech Circle.

The post “It used to be lonely being Indigenous in tech.” How one tech founder’s question led to a community of hundreds first appeared on BetaKit.

AI conferences have a unique vibe.

They’re ostensibly tech events, featuring the requisite 30,000-foot view of the future and no roadmap on how to get there. But at this stage of the technology’s lifecycle, they’re also academic gatherings, and thus tend to feel a little insular and snooty… Like if OpenAI were a two-day event instead of a non-profit (for-profit?).

“How do we collect data so that we give it in the hands of the government in an efficient way? We’re in a democratic country. Isn’t this data supposed to inform the government?”

Which is why it was so refreshing to connect with Raesetje Sefala, currently a research fellow at The Distributed AI Research Institute (DAIR) and formerly a Mila researcher. Sefala has the data science chops but blends in a social science interest in human impacts: as she explains on the podcast, her origin story involves growing up in post-apartheid South Africa, looking around and wondering exactly what organizing principle her government was using to effect change.

It turns out it was more of a vibes thing, and through her work, Sefala has been both collecting and defining the data sets needed to first map her community and then chart its evolution. At ALL IN, she participated in a panel conversation on AI initiatives in Africa and what the Canadian ecosystem could learn from the work, and the takeaways are quite timely for a country with an abundance of bureaucracy and a noted lack of open data and civic tech.

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

So, how is DAIR using computer vision, satellite imagery, and machine learning to understand the impacts of spatial apartheid in South Africa? How might Canadians learn from their work?

Let’s dig in.

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The BetaKit Podcast is presented by Motion: a Canadian company that helps teams ship more winning ads.

Motion provides beautiful creative reporting to help your team generate more revenue from your paid social ads.

You can read about Motion in BetaKit’s three-part series, The Comeback, which documents the founding team’s journey to a $30-million USD financing round announced earlier this month.

Motion is hiring. To be part of this fast-growing team, visit careers.kula.ai/motion.

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy DAIR.

The post What Canada can learn from AI use in South Africa  first appeared on BetaKit.

Toronto-based FinTech firm Propel Holdings has entered into an agreement to acquire United Kingdom-based FinTech lender QuidMarket to the tune of $95.9 million CAD ($71 million USD).

Based in Nottingham, England, QuidMarket offers an online lending solution that Propel said has originated over 310,000 loans to UK consumers since 2011. The all-cash deal is aimed at advancing Propel’s growth strategy and provide a foothold in the British market. The existing management team at QuidMarket will continue to operate the business going forward, according to Propel.

Founded in 2011, Propel offers an online lending platform that caters to consumers who are underserved by traditional financial institutions. The company says it uses artificial intelligence (AI) to assess customers’ creditworthiness and enable more informed lending decisions by analyzing vast amounts of data.

Propel went public on the Toronto Stock Exchange in 2021, raising $70 million through its public offering. On its website, the company claims it has given out over one million loans and facilitated over $1 billion in credit in the last 12 years.

Since going public in October 2021, Propel has expanded both its products and the areas it serves. It launched Fora Credit in Canada, formed partnerships in the United States to offer lending services through other companies, and recently teamed up with fellow Toronto-based FinTech company Koho to provide a new line of credit in Canada.

The latter partnership will see Koho introduce and manage the line of credit as one of the core lending products in its app. Propel will power the technology, underwriting, servicing, and funding of the loans, which will range between $1,000 and $15,000.

Propel has performed well on the TSX since its debut relative to other tech companies that went public during the pandemic. The company, which trades under the symbol ‘PRL’ traded at $27.89 at press time, up over 160 percent since October 2021.

RELATED: Koho set to launch line of credit offering through partnership with Propel Holdings

Propel reported that QuidMarket brought in roughly $27.7 million USD in revenue and earned approximately $9.6 million USD in net income for the twelve months ending June 30, 2024. 

It appears Propel is eyeing more than just the British Isles. In a statement, the company noted that the UK offers it access to the broader European market.

“QuidMarket serves a market of more than 20 million underserved consumers in the UK where the demand for credit far exceeds supply,” Clive Kinross, CEO of Propel, said in a statement. “Backed by Propel’s AI-powered technology, financial and operational expertise, and capital resources, we believe QuidMarket will be able to accelerate its growth while broadening access to credit for more underserved consumers.”

Alongside the acquisition announcement, Propel disclosed that it has entered into a bought deal equity offering with a group of underwriters led by Canaccord Genuity Corp. and Scotia Capital Inc.

The underwriters have agreed to purchase 3.64 million subscription receipts at a price of $27.50 CAD each, generating gross proceeds of about $100 million CAD for the company. Propel said it plans to use the net proceeds to help fund the acquisition.

According to Propel, the acquisition’s purchase price reflects a multiple of about 740 percent of QuidMarket’s net income for the twelve months ending June 30, 2024. The acquisition is expected to close in the fourth quarter of 2024 or early in the first quarter of 2025.

Feature image courtesy Unsplash. Photo by Fabian Bank.

The post Propel Holdings to acquire UK-based QuidMarket for $95.9 million CAD first appeared on BetaKit.

After slipping in 2023, Toronto recently reclaimed its fourth-place position in the CBRE’s new Scoring Tech Talent ranking.

According to CBRE, the city’s resurgence comes from the addition of 95,900 tech jobs between 2018 and 2023, a growth of 44 percent. The organization called it “a dose of good news for Canada’s largest city in the face of economic challenges, brutal traffic, and layoffs across the tech industry.”

Many companies are doubling down on Toronto talent. Yesterday, Stripe opened a new office in the city alongside plans to hire 50 team members in the city. 

Here are three more companies looking to hire tech workers in the Greater Toronto Area. Check out all the organizations recruiting at Jobs.BetaKit for more opportunities.

Koru

Koru is a Toronto-based venture studio funded by the Ontario Teachers’ Pension Plan. The organization is looking to advance its artificial intelligence practice with a senior AI solutions engineer.

Responsibilities include designing and building practical AI solutions across industries, developing reusable AI libraries, and collaborating with various internal teams. The role also involves assessing the feasibility of AI solutions, communicating findings to technical and non-technical audiences, and ensuring the successful execution of projects.

The successful candidate will have experience developing and deploying AI solutions, integrating generative AI libraries, and working with machine learning frameworks like TensorFlow and PyTorch. Familiarity with AI agent development, prompt engineering, and strong knowledge of data structures and algorithms is also essential.

Learn more about the position by visiting Koru’s job board.

Vaco 

Brentwood, Tennessee-based Vaco offers talent solutions and managed services across contract staffing, direct hire and executive search, with areas of expertise in technology, digital, accounting, finance, HR and operations. 

Vaco is seeking a director of technology for one of its clients, a publicly traded mining company. This full-time hybrid role calls for a seasoned technology leader with expertise in SAP ERP and a background in industries such as mining, natural resources, oil and gas, or manufacturing. Fluency in French is required.

The director will manage and update SAP ERP systems, oversee IT infrastructure supported by external consultants, and lead an IT team of three. Key responsibilities include user access management, training, and system configuration.

Candidates should have at least 15 years of technology experience, including leadership roles, and must be based in the Greater Toronto Area with the ability to work in Canada. The position offers a salary of $175,000 per year.

Learn more about the role on Vaco’s job board.

Zebra Technologies

American computing company Zebra Technologies specializes in technology used to sense, analyze, and act in real time. The company, which manufactures and sells marking, tracking, and computer printing technologies, is seeking a senior manager of technical program management to drive software development and market releases.

The role, offered on a hybrid basis, involves leading a team of program managers and cross-functional teams, including systems and software engineers, test engineers, and operations, from concept to deployment. 

Candidates should have a bachelor of science in electrical engineering, computer science, or a related technical degree, with a minimum of 12 years of experience in engineering or program management, including two or more years in management. Cloud application experience with Google Cloud, AWS, or Azure is also required.

Learn more about the position by visiting Zebra Technologies’ job board.

Feature image courtesy Unsplash. Photo by Dan Newman.

The post Looking for a tech job in Toronto? Here are three companies hiring first appeared on BetaKit.

American-Irish payments company Stripe is growing its Toronto presence with the opening of a new office in the city.

The space, which opened Sept. 26, is located at 1 University Avenue in the city’s downtown core. It opened almost exactly three years after Stripe first established a physical presence in Toronto.

The expansion reflects Toronto’s status as the fourth-largest tech talent market in North America, Stripe stated in a release. The new office will house roles in engineering, product management, sales, design, and more. According to a LinkedIn post written by Matthew Burlak, Stripe’s head of Canada go-to-market, the company is currently hiring 50 team members for the new office.

“The quality of talent is undeniable and the tenacity of entrepreneurs is energizing.”

“After more than a decade in Canada, we’re proud to support many of the country’s most successful startups and enterprises, with thousands more Canadian companies getting started with Stripe every day,” Burlak said in a statement. “We’re looking forward to growing our team and accelerating the success of even more Canadian businesses.”

Stripe, which is dual-headquartered in San Francisco and Dublin, offers infrastructure that allows businesses to accept online payments, manage revenue, and handle transactions. It also offers tools for billing, fraud prevention, and global financial infrastructure. 

The company’s payment infrastructure is used by a number of Canadian tech companies, including Shopify, Lightspeed, FreshBooks, Thinkific, and SkipTheDishes.

Stripe opened its first Toronto office in 2021, marking its first physical presence in Canada despite operating in the country since 2012. Jim Lambe was appointed as the company’s first general manager in Canada. He held the role until April 2023 before transitioning to vice president and general manager at NetApp Canada. In August 2023, Burlak took over as the new country head.

RELATED: FreshBooks expands Stripe partnership with new embedded payments offering

The firm claims that Canadian companies grew their payment volume on Stripe by more than 50 percent between 2021 and 2023. In a post on X in May, Stripe CTO David Singleton said Canada is the company’s third-largest market.

“It’s an interesting moment for tech in Canada, but there are two things I know are true here: the quality of talent is undeniable and the tenacity of entrepreneurs is energizing,” Singleton said at the time.

Stripe has launched several new products in the Canadian market in the last year, including cross-border selling on Stripe Payments, contactless in-person payments, and usage-based billing. 

Not all Canadian tech companies share the same enthusiasm for Stripe. In 2023, Calgary-based fintech startup Helcim said it faced major delays in developing its point-of-sale device after Stripe acquired its manufacturing partner. Despite being a much smaller player, Helcim, which offers a built-from-scratch payment stack, views itself as a competitor to Stripe.

Earlier this year, Stripe revealed it surpassed $1 trillion in payment volume for 2023. Recent performance disclosures have fuelled speculation that the company is preparing to go public.

Feature image courtesy Unsplash. Photo by Alex Shutin.

The post Stripe opens new Toronto office with plans to hire 50 team members first appeared on BetaKit.

Trust, speed, and security.

Those were the selling points discussed on Tuesday at BetaKit Talks: You Don’t Know Crypto – presented by WonderFi, an event that assembled CEOs and builders in the crypto space to discuss the applications of their work for the broader technology sector.

“When people think of crypto, they typically think of trading, but there’s so much happening beyond that,” said Dean Skurka, CEO of WonderFi, which co-hosted the event. “There’s a real crossover between what we’re building, and what the tech community needs to solve their problems with innovative solutions.”

“There’s a real crossover between what we’re building, and what the tech community needs to solve their problems with innovative solutions.”

Held at the East Room in Toronto and headlined by Skurka, the event featured a panel of industry experts and innovators, who were challenged to articulate the benefits of blockchain technology without relying on terminology that can sometimes be inaccessible to those outside the community.

To help, the audience received a goody-bag stamped with a QR code, which led to a glossary of common Web3 terms and their explanation.

Blockchain is most commonly associated with cryptocurrencies, but Skurka wants more people to understand its applications beyond the coin.

WonderFi is not only the parent company of two of Canada’s largest crypto trading platforms, Bitbuy and Coinsquare, but recently launched an innovation and development arm, WonderFi Labs, focused on the applications of decentralized technologies and building innovative global products.

“People aren’t really concerned about the underlying technology; it’s really more about the experience, and what you’re able to do with the product,” said Skurka. “That’s something we’re trying to solve for at WonderFi Labs; bridging to the next wave of blockchain participants in a way that’s intuitive and removes a lot of the friction.”

Through the event, he hoped to bring increased attention to what the panel described as an early-stage technology, one that has applications for some of today’s biggest challenges, including cybersecurity, data sovereignty and the realities of a global economy. 

The overall sentiment of that conversation was simple; blockchain is much more than cryptocurrencies and NFTs and will one day be the underlying infrastructure of most global transactions.

“In the ‘80s it was crazy to imagine sending mail on the internet,” said Jelena Djuric, the co-founder of digital asset issuance platform Noble. “That’s going to be money. One day it will be crazy that we had to go into a bank branch, initiate a wire, have a swift code, and all this stuff — like no, I can send money to someone in Africa on blockchain in two seconds.” 

Though it is still early days for Web3 innovations, the panelists were eager to share some of the opportunities they believe the technology can facilitate.  

“When you look at the cloud and why cybersecurity is such an issue right now globally, it’s because you have this need for trust of the data management system. You have to trust a third party and trust their cyber security,” explained Jackal Labs co-founder Patrick Dunlop. “Putting the data permission on blockchain rails gives us the ability to actually move to that deeper level of trust and increase the cyber security and digital privacy of files or anything else we want to put on those rails.” 

Dunlop said that while finance and cryptocurrency were among the first and most prominent use cases, there are plenty of opportunities for this technology to build a more protective layer onto digital interactions of all kinds. 

“It’s very early, and there’s a lot of work still to be done,” said Shana Derman, Senior Manager – Quality & Integrations at staking solutions provider Figment. 

Derman said she was attracted to the industry for the opportunity to protect the integrity of online media and digital assets.

“We discovered this technology, and said ‘this makes perfect sense: let’s build the infrastructure on the Blockchain for transparency and trust and loyalty,” she said. 

Blockchain also offers a way for companies to replace shares and options with more secure and traceable tokens, explained Inference Labs co-founder Colin Gagich. After his company raised $2.3 million this past April Gagich and his co-founder put most of the funds on a public blockchain and implemented rules that offered investors a clear line of sight on how the funds were spent. 

All of the Web3 founders expressed their belief that blockchain technology could be of huge utility to Canadian tech companies, allowing them to grow faster and with more autonomy.

Though the technology offers many promising opportunities, Skurka acknowledged that there are still barriers those operating in the Web3 ecosystem need to overcome. 

But he expressed his commitment to supporting the country’s  passionate community of blockchain developers as best he can, whether through WonderFi Labs or through events that help bring the community together.  

“We’re focused on using our position in this market to support entrepreneurs that are developing in this space,” he says. “We think a lot of what’s exciting about that development moving forward is happening on chain and through WonderFi Labs, and we continue to invest and support that next wave of blockchain entrepreneurs and products across the country.”

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Whether you attended the event as part of the tech community new to crypto, or are eager to dive in now, WonderFi has a special offer just for you. Sign up through this link on their crypto trading platform Bitbuy and receive $50 free to kickstart your crypto journey. Don’t miss out on this opportunity to learn and grow in the crypto community!

The post It’s not the technology, it’s what you build with it first appeared on BetaKit.

Toronto-based private equity firm Vertu Capital has completed a strategic investment into EdTech startup LumiQ.

The deal marks Vertu’s fourth platform investment since the private equity firm closed its inaugural fund with more than $300 million CAD in capital commitments. In a statement, Vertu said LumiQ features all the fundamentals of an ideal investment for the firm. 

“LumiQ is exactly the kind of market-leading B2B software-enabled technology company that Vertu looks to invest in,” Eric Kafka, principal with Vertu Capital, said in a statement.

“We’ve always viewed our content as not only an incredibly important part of our product, but a really big element of our moat.”

Michael Kravshik

“This is a fast-growing and unique company in an exciting space that is primed to accelerate its domestic and international growth,” Kafka added.

A report in Private Capital Journal described the deal as a majority-stake acquisition, but LumiQ CEO Michael Kravshik declined to confirm or deny the claim. Kravshik also declined to disclose the dollar value of the investment, as well as the percentage of equity acquired in the deal, to BetaKit.

Vertu typically writes cheques between $25 million and $75 million, and targets companies that are either at or close to $20 million in ARR, are breaking even or profitable, and are worth up to $500 million. Kravshik said Vertu participates in both majority and minority-stake deals.

Kravshik said Kafka, as well as Vertu founder and managing partner Lisa Melchior and Vertu operating advisor Peter Lee, have joined LumiQ’s board following the deal. Kravshik said the deal does not otherwise impact the company’s team and leadership.

RELATED: FinTech software firm PureFacts sells majority stake to New York-based GrowthCurve Capital

LumiQ (formerly Luminari), founded in 2016 by Kravshik and CRO Adam Bercovici, produces podcasts aimed at helping chartered professional accountants (CPAs) complete their annual training and professional development requirements. In 2019, the company pivoted from career management for CPAs into education, after finding that obtaining professional education credits was a key pain point for CPAs.

Since its founding, LumiQ has not taken on institutional venture financing, an intentional decision according to Kravshik.

“The accountant in me has always had a tougher time with the idea of us raising a ton of money and burning capital for a really long time before we could monetize or get to a point of break-even and sustainability,” he told BetaKit.

He also noted that many prospective venture capital investors were more “bearish” about the idea that LumiQ could be a content-led business, rather than a technology-led one.

“We’ve always viewed our content as not only an incredibly important part of our product, but a really big element of our moat,” he added.

While the startup has raised funding in the past, including a $5-million fundraise in 2022, it only raised from angel investors that were aligned with the founders’ vision for the company.

RELATED: Paper co-founder Roberto Cipriani steps down from day-to-day role

Kravshik said he has known Melchior and Kafka for years. “Each time I left with the distinct feeling that we shared values, and they saw the same vision Adam and I did for LumiQ,” Kravshik said in a LinkedIn post this week.

Since launching in the United States in 2022, Kravshik said the startup has brought 45 of the top 100 accounting firms in the nation as clients, including Aprio and Eide Bailly LLP. He said the new capital will be used to add new functionalities to the startup’s product and grow the currently 100-person team.

“As we’ve gone upmarket, there have been elements of the product that we need to create—let’s call it more functionality,” he added. “It’s different when you’re managing a team of three or five or even 10 people, and when you have a finance team of 200 or potentially 5,000.”

Kravshik said LumiQ’s clients want stronger data tracking, along with the ability to tailor and manage the app to fit their specific needs.

The accounting industry is also changing more broadly, largely due to the rise of automation, according to Kravshik. He noted that as accountants move from mere executors of tasks into more trusted business advisors, LumiQ can help them do so in an enjoyable way.

“We’ve got the technical content: your accounting standards, tax updates, things like that. But if you really want to be a well-rounded professional and a trusted advisor to any kind of business, you need more than that,” Kravshik added.

Feature image courtesy LumiQ.

The post EdTech startup LumiQ receives strategic investment from Vertu Capital first appeared on BetaKit.

This is the third and final installment of “The Comeback,” the story of one team’s search for a good problem, and the lessons learned along the way. Read Part One: Wrecked, and Part Two: Rebuilt.

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Taylor Brandt, a principal at venture firm Headline, was no stranger to the problems that stymied marketing teams across the advertising sector. She had lived them.

Prior to joining venture firm Headline as an investor in 2021, Brandt had been running a creative team at a direct-to-consumer kids’ apparel brand. Her colleague, Nicole (Nikki) Farb had also founded several companies in the beauty and lifestyle industries. 

“We really do believe that some of the best advertising in the world is being done with our customers.”

Faye Campbell, Motion

Both women had seen firsthand how creative teams often lacked a voice in the decision-making process. They were treated more like an outsourced agency, largely because they didn’t have direct access to the data that could prove the effectiveness of their work.

And so, when a friend mentioned a startup that had created a data product for creatives, Brandt and Farb’s interest was piqued.

The company was early in its development, much earlier than Headline typically invested, but for Brandt and Farb, something just clicked.

“I was fairly new on the team at the time,” she recalled. “But because it resonated so much with me off the bat, I really pushed for it.” 

Brandt and Farb recognized a solution that would have been a life-saver for them in their previous roles. To Brandt, it represented a whole new category of software. But convincing her colleagues of the opportunity wasn’t easy. 

“I think it’s a problem that’s hard to understand unless you work in it,” she said. “When I tried to explain it to the team, they were like, ‘I don’t get it.’ They wanted to wait and see what happened.”

Time to build

Shoelace had been founded as a software company focused on helping brands set up ad campaigns on Facebook. When that need disappeared, the company transitioned into a growth marketing agency, which still operates today under the leadership of CEO Cory Dobbin.

But in 2020, Shoelace’s co-founders—Reza Khadjavi, Alexander Sloan, and David Berglas—were already laying the groundwork for their next venture.

They called it Motion, which offered an analytics product designed to bridge that gap between performance marketers and creative teams.

“We went in very eyes-wide-open the second time around, because we got the taste of what happens when the foundation is shaky,” Khadjavi said.

Initially, the trio took Shoelace’s existing team of engineers over to the new company. Sanja Smrzlic, a nurse-turned-developer at Shoelace, joined Motion in 2020. Evan Lee, who joined Shoelace as a performance marketer in 2018, would move over to Motion in 2021, and now serves as head of partnerships and business development.

Elliott Brand was another key figure brought over from Shoelace. Starting as an entry-level marketing hire, Brand would spend his free time at Shoelace drawing up entire product feature ideas. Unsurprisingly, he took on the role of scrappy generalist, joining when the team was just five people. He now serves as Motion’s head of product.

“Reza hits me up and says, ‘Hey, there’s some legs to this idea of Motion. We need a product person. We need a marketing person. Can you do both?” Brand said.

One of the core challenges for Brand and the new product team was building an analytics platform that catered to both growth strategies and creatives. 

Brand said the product team drew inspiration from outside the typical B2B space, like video games, and developed features like CardView and Motion Metrics. Both tools simplified intricate advertising metrics into easy-to-understand scores, allowing all users to quickly assess and improve their creative work.

“The question was: how can we play to that lowest common denominator in such a way that, say, a videographer who creates an ad is now empowered to come into Motion and understand where this creative is working, where it’s not working, and what they can do to improve it,” Brand added.

While Brand at the team were building, Khadjavi was already seeing demand.

“We got to 600 people on our waitlist before we even launched the product,” he said. “It was very clear, even from prelaunch, that this was top of mind for so many people in our industry.”

From roadmap to rocketship

Khadjavi describes Motion today as the “mission control center” for the creative strategist. 

When the platform finally launched in 2021, Khadjavi said the impact was immediate. Performance marketers, brands, and agencies were drawn by the platform’s ability to demystify and enhance the creative process. This translated into rapid growth for the startup—Khadjavi said Motion tripled its revenue every year for the first three years and amassed over 1,000 customers.

The use cases seem to be endless. A24 Films, the studio behind award-winning films like Hereditary and Everything Everywhere All at Once, uses Motion to measure the effectiveness of its trailers. HexClad, a premium cookware brand, increased top-of-funnel spend by 60 percent with Motion’s creative insights, while Meta and TikTok ad agency The Social Savannah saves 520 hours annually on creative reporting thanks to Motion.

“This idea of ‘the best of the best’ is something that gets repeated internally a lot,” said Faye Campbell, head of Motion’s revenue operations. “We really do believe that some of the best advertising in the world is being done with our customers.”

A particularly striking measure of Motion’s success is its burn multiple—which measures how much capital a company is spending to generate each dollar of new revenue, offering a clear view of how efficiently Motion is scaling its growth relative to its expenses.. For venture-stage startups, a burn multiple of one to 1.5 is considered “great,” Khadjavi said, with anything below one being “amazing.” Motion’s current burn multiple stands at 0.5, according to the CEO.

A culture set in motion

The differences between Motion and Shoelace go beyond product features and the presence – or lack – of a core software solution. Brand recalls a period at Shoelace when the team lost its sense of unity, a shift he attributes largely to the company’s financial struggles at the time. 

“The scary thing about being an employee is that you can be an all-star team member, but you can’t change the fundamentals of the business if they’re not stacked correctly,” Khadjavi added.

In building Motion, the founders took a more intentional approach, Brand said, creating a culture where healthy debate and experimentation was both encouraged and expected.

“I believe culture is the single biggest differentiator between a successful startup and a non-successful startup,” Brand said.

“Our team at Motion is extraordinarily opinionated and vocal, but we’re also very willing to get our hands dirty and commit to an idea, even if we might have disagreed with it at first,” he added.

“Our team at Motion is extraordinarily opinionated and vocal, but we’re also very willing to get our hands dirty.”

Lee, who manages his own team at Motion, echoed this sentiment.

“I think the biggest thing that they do is they give us autonomy,” he said. “I’m not saying Reza just closes his eyes and hopes for the best. He’s certainly involved. But in terms of how I manage my team and how I create the culture on my team, he lets me approach it the way that I want to, which I love.”

This focus on trust has had an impact on team members like Smrzlic. She transitioned from nursing to customer success to development, a leap made possible by the team betting on her core potential. “My role would change so frequently, as it does in startups, but the trust has always been there,” she added.

“They just trust people to do great work without having to box them in with constraints and processes and approvals,” added Campbell, who joined from Vancouver-based Unbounce late last year. “I’m hoping we can keep that alive as long as possible.”

At Headline, Brandt said that Motion’s willingness to “bet on people and give them room to rise” was among the reasons she was drawn to the startup. Despite there being an initial stage mismatch, Brandt and Farb persuaded Headline to lead the Motion’s $6-million seed financing round in 2023.

“I think we’re all very happy that we decided to do that at that stage,” Brandt remarked.

Headline would go on to lead Motion’s Series A round, and most recently, participated in Motion’s $30-million USD Series B financing round, announced just last week. 

Coinciding with that fundraise, Motion also unveiled a new product suite called Creative Research, which helps brands track their competitors, look at trending ad concepts, and build a swipe file of their favourite ads. The startup’s Series B round, led by new investor Inovia Capital, will help accelerate its product roadmap. 

“As AI drives the cost of new creative production down to zero, the biggest questions brands need to answer is: what to create?” Khadjavi said, noting that he thinks Motion will increasingly provide teams with an answer.

Reflecting on the shift from Shoelace to Motion, Khadjavi believes the key difference between the two companies was his co-founders’ ability to tackle high-priority problems head-on.

“The thing we missed with Shoelace was that solving low-priority problems meant people didn’t have time for us, didn’t pay much, and churned easily,” he said. “Solving a high-priority problem can be very intimidating, but it doesn’t take a lot more time or effort than solving a low-priority one.”

While chasing smaller fires might seem less daunting to a first-time founder, Khadjavi learned it’s ultimately a wasted effort. “People will give you a lot more of their time and attention if you’re solving their high priority problem,” he said.

“With Motion, we aren’t afraid to go after those big problems.”

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Motion is hiring! Check out their careers page and join one of Canada’s fastest growing tech companies.

All images provided by Reza Khadjavi.

The post “Eyes wide open” and a clear view on success first appeared on BetaKit.

In response to recent media reports that the company is exploring a sale, Montréal-based Lightspeed Commerce has confirmed that it is currently conducting “a strategic review of its business and operations.”

The payments technology company announced that it periodically undertakes such reviews “with a view to realizing its full potential.” As part of this process, Lightspeed said it “has engaged, and may continue to engage, in discussions relating to a range of potential strategic alternatives” but did not elaborate on what those options might include.

Lightspeed’s Sept. 25 statement came hours after Reuters and then The Globe and Mail reported that Lightspeed is working with a financial advisor to explore options including a potential sale, citing anonymous sources familiar with the matter. Both publications have reported that this process remains in the early stages, noting that a deal is not guaranteed.

Lightspeed has reportedly enlisted JPMorgan to explore options including a potential sale.

Reportedly, Lightspeed has hired American investment bank JPMorgan Chase to lead this review, evaluate the company’s options, and solicit interest from potential buyers that may include a rival tech company or private equity (PE) fund.

Lightspeed and JPMorgan Chase declined to comment on these reports to BetaKit.

When asked how common it is for a strategic review like this to lead to a sale, ATB Capital Markets director of institutional research Martin Toner told BetaKit, “While it is tough to put a number on, it is fairly common.” For his part, Toner believes that a leveraged buyout would be difficult and “likely too expensive.”

In an analyst note shared with BetaKit, Toner wrote that he believes Lightspeed may have strategic value to legacy merchant acquirers like Fiserv or Global Payments, and select tech and software companies, including those involved in payments, such as Apple, Amazon, Square owner Block, PayPal, or Shopify.

As for PE firms, Toner thinks some might be interested in buying Lightspeed given its gross transaction volume, balance sheet, and “hidden assets,” and could look to split up the company, selling its hospitality business to a player like Toast while keeping its retail business.

Investors have reacted favourably to the news: Lightspeed’s shares are currently trading at $22.11 apiece on the Toronto Stock Exchange (TSX), up more than 17 percent since before Reuters’ initial story was published yesterday.

RELATED: Lightspeed beats revenue forecast in first full quarter under Dax Dasilva’s renewed reign

Founded back in 2005, Lightspeed sells point-of-sale and commerce software and hardware to restaurants, retailers, and hospitality providers. The company is dual-listed on the TSX and the New York Stock Exchange under the symbol ‘LSPD.’

Lightspeed’s stock has fallen more than 86 percent from its COVID-19 pandemic high in September 2021 amid the broader tech downturn, a drop fuelled at least in part by a short-seller report critical of some of Lightspeed’s metrics.

This year, Lightspeed has vowed to focus on growing its top-line revenue without sacrificing the progress it has made in becoming earnings before income, taxes, depreciation, and amortization-positive, as the company aims to strike the right balance between revenue growth and profitability to woo investors.

In February, after investors expressed disappointment with Lightspeed’s fiscal third-quarter earnings, Lightspeed’s board replaced CEO Jean Paul Chauvet with founder and former CEO Dax Dasilva, who has prioritized “profitable growth.”

RELATED: How Dax Dasilva plans to get Lightspeed to $1 billion in revenue

Dasilva joined the BetaKit Podcast in June to discuss why he stepped down as CEO in 2022, why he came back this year, and how he plans to get Lightspeed to $1 billion in revenue. 

He did not rule out the potential for Lightspeed to go private, a path that many other publicly traded Canadian tech firms have pursued as tech valuations have fallen. When asked whether he was considering the possibility of taking Lightspeed private, Dasilva emphasized at the time that his current goal was to make Lightspeed “a great public company,” but also acknowledged that the company “can’t close the door to other strategic options.”

Earlier this year, fellow publicly traded Montréal payments tech company Nuvei reached a $6.3-billion USD deal to be acquired and taken private by United States private equity firm Advent International. Nuvei is not alone: other public Canadian tech firms have also recently gone private, including Absolute Software, BBTV Holdings, Dialogue Health Technologies, Magnet Forensics, MDF Commerce, Q4 Inc, and TrueContext.

Whether Lightspeed ultimately takes the same route remains to be seen, but in the meantime, BetaKit editor-in-chief Douglas Soltys will be speaking with Dasilva once more next week at the Elevate Festival tech conference in Toronto on Wed. Oct. 1.

UPDATE (09/27/24): This story has been updated to include additional commentary from ATB Capital Markets’ Martin Toner.

Feature image courtesy Lightspeed Commerce.

The post Lightspeed confirms strategic review of business as company reportedly explores sale first appeared on BetaKit.

Bankruptcy, imperfections, and immigration policy aren’t normally topics raised on the mainstage.

But, well, it’s been a year.

Get ready for tech to get candid at the SAAS NORTH conference on November 13-14, 2024, at Ottawa’s Shaw Centre.

The BetaKit Keynote Stage will serve as a front-row seat to the most compelling conversations at SAAS NORTH 2024.

BetaKit is proud to support Canada’s go-to event for scaling SaaS founders and startups, a staple in the Canadian tech scene since 2016. 

And this year’s BetaKit Keynote Stage is about to serve some tea, with speakers Marie Chevrier Schwartz, Andrew McLeod, and Martin Basiri stepping into the spotlight to provide a rare glimpse into the realities of failure, determination, and innovation in SaaS. 

The trio of big names will talk about the unexpected hurdles, mistakes, and personal growth that comes with leading high-growth companies through good times and bad.

For the fourth consecutive year, the BetaKit Keynote Stage will serve as a front-row seat to the most compelling conversations at SAAS NORTH 2024. You may want to grab your popcorn for these highlight sessions.

Marie Schwartz: Failure IS an Option – The Story of Sampler

For a long time, she was Marie from Sampler. 

This summer, the Toronto-based company filed for bankruptcy, and the founder who had raised more than $13M with her product sampling platform had to figure out who she was going to be now.

BetaKit Editor-in-Chief Douglas Soltys will sit down with former Sampler CEO and founder Marie Chevrier Schwartz for an intimate conversation about the rise and fall of her company.

Originally from Montreal, Chevrier Schwartz started her venture in 2013 after stints in advertising and a NYC venture capital firm.

She soon became a prominent figure in the Toronto tech scene, and the comments of support she received on her Linkedin post announcing Sampler’s bankruptcy came from a who’s who of investors, founders, and high-profile admirers.

Since that post, Chevrier Schwartz has been reflecting on her lessons learned.

“A big lesson I learned from mentoring startups and building my own is that there’s way too much focus put on raising venture capital,” she wrote recently. “This is setting so many early-stage startups up for failure. Raising money does not make your business viable… paying clients does.”

In what promises to be a raw, real, and thought-provoking conversation, Chevrier Schwartz will confront the power of honesty and vulnerability in leadership, and share what she’s learned about reframing the idea of what success looks like.

This cathartic session will be a unique opportunity to hear a founder mourn the loss of their former company and level with the  audience about the impacts on their approach and identity.

Just don’t expect this compelling speaker to be focused in the rearview mirror.

Chevrier Schwartz recently announced that she’s joined TechTO as “CEO in residence,” the next step in finding the “new and improved” Marie after Sampler.

Andrew McLeod: Global Growth and Goofs – Certn’s Journey of Expansion and Lessons Learned in the “Oops” Moments

While working at a company that allowed people to pay their rent online, Andrew McLeod and his colleagues came up with the idea for a background check tool that would allow good applicants to stand out for qualities besides a high credit score.

Years later, the CEO of Victoria-based Certn will hit the SAAS NORTH stage to provide a background check on his own company.

McLeod will share firsthand accounts of the mishaps and humorous missteps from Certn’s international expansion journey, as it quickly scaled as one of Canada’s fastest-growing companies.

Billed as a session “about embracing imperfection, learning from mistakes, and navigating the challenges of scaling a company globally” McLeod promises to assess his own record with wit and wisdom.

McLeod will discuss the realities of scaling a company globally, how to turn mistakes into growth opportunities, and the importance of agility and resilience in moments of failure.

Martin Basiri: From Record-Breaking Seed Round to Unicorn – Finding Product-Market Fit as a Visionary Founder

The Canadian government continues to announce increased restrictions on international students in Canada.

It’s a policy shift that is surely resonating both personally and professionally for Martin Basari, who immigrated to Canada from Iran to study, along with his brothers. The sibling’s experience prompted them to found Applyboard, a Canadian Unicorn company that helps international students apply to post-secondary institutions.

Applyboard recently announced a $100 million CAD raise that they will use to expand beyond English-speaking countries to 20 new destinations, with a particular eye on bringing European and Asian schools to the platform by 2030.

Basiri has shifted his focus too, having transitioned from Applyboard, (where his brother is now CEO) to his new venture. His new company, Passage, will focus on enabling employers to attract top talent to Canada.

SAAS NORTH is a unique opportunity to hear from one of Canada’s most successful CEOs, as Basiri discusses his own inspiring journey, from starting Applyboard as a first-time founder with no funding to launching Passage as a unicorn founder with more money than any other Canadian seed-stage company. 

Basiri will compare and contrast his experiences of finding product-market fit in different stages of his career, providing insights into the challenges and strategies involved.

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Don’t miss this chance to hear candid insights from founders who have navigated both success and failure—lessons that could help shape the future of your company. Dive deeper into all of SAAS NORTH’s offerings this year — from breakouts to breakfasts and ‘Founders Fued’ — by viewing the full agenda here.

All photos provided by Cube Business Media Inc.

The post SAAS NORTH gets real first appeared on BetaKit.

Canadian-founded, San Francisco-based Bemi aims to streamline how back-end developers use their databases to power event-driven systems. The software startup has announced nearly $1.2 million CAD in total funding to fuel its early efforts with more Canadian engineering talent.

Last month, Bemi secured $872,000 in pre-seed financing led by Night Capital with support from existing backer Mucker Capital, new investors Niche Capital, Materialized View Capital, and angels such as Xata founder Monica Sarbu to fuel its product development plans.

Combined with $309,000 in previously unannounced initial funding from Mucker and AngelList that closed in October 2023, which was also raised via a simple agreement for future equity, this fresh capital brings Bemi’s total funding to nearly $1.2 million.

“Our vision is to become the standard platform to track data changes for businesses that run on Postgres.”

Founded in 2023 by two Canadians, CEO Arjun Lall and CTO Evgeny Li, Bemi describes itself as an automatic audit trail for Postgres. Postgres, or PostgreSQL, is a popular open-source database management system. “Our vision is to become the standard platform to track data changes for businesses that run on Postgres,” Lall told BetaKit in an exclusive interview.

With its open-source software, Bemi aims to help businesses do this without allocating significant engineering resources to building and maintaining that infrastructure in-house.

Lall and Li previously worked together as software engineers at Toronto-based event platform Universe (acquired in 2015 by Ticketmaster) and have stayed close friends since then.

According to Lall, Li went on to build data-tracking infrastructure currently used to manage $124 billion worth of assets while working as a principal software engineer at AngelList. He also created open-source data libraries used by companies like Netflix, GitLab, and Alibaba. Meanwhile, Lall worked on developer infrastructure at Meta following some time with Nextdoor as a software engineer.

“Both of us faced this challenge of the infrastructure and application layers of the database throughout our careers,” Lall said. The pair eventually realized other big companies were contending with the same problem, which Lall claimed required considerable engineering resources and expertise to address, noting that some companies spent months trying to build solutions like Bemi internally but ultimately failed due to the associated difficulty. 

“It was also incredibly difficult to maintain this infrastructure and make it easy to use for developers,” Lall said. “We realized that this was actually a very big opportunity.”

Enter Bemi, which the pair launched last October. “Bemi integrates with Postgres to provide a reliable audit trail, essential for compliance, building customer activity feeds, and troubleshooting data issues,” Lall continued. “Bemi also enriches these data changes with automatic metadata—like which user made the change and which endpoint was used—providing additional context.”

Night Capital founder and general partner Kevin Carter described Lall and Li as “incredibly sharp and ambitious founders building in a massive market.”

“‘Show me everything that has changed about this data in the past week’ is a very difficult thing to do, but it is critically important,” Carter told BetaKit

RELATED: DevOps platform Codezero raises $3.5-million seed round

Carter expects the rise of artificial intelligence (AI) to further increase demand for real-time streaming, and by extension, Bemi’s solution. This is something Lall said Bemi is already seeing given how companies need to “analyze, synchronize, and apply” data changes immediately to boost the accuracy of their AI models.

Lall views Bemi’s developer experience as a differentiator. “Some companies will tackle this only at the database level, or other solutions will be only at the application level, but where we come in is [we] marry these two approaches of the application context and the database events, and this is a big step into making things much more developer-friendly,” he said.

Today, Li lives in Ottawa, while Lall, who is from Toronto, is based in San Francisco. According to Lall, Bemi plans to hire primarily in Canada going forward, and he noted that the startup is looking to add some Canadian engineering talent over the near term.

Night Capital’s Kevin Carter described Lall and Li as “incredibly sharp and ambitious founders building in a massive market.”

Since its launch in February, Bemi has been working to improve and scale its infrastructure. According to Lall, the startup’s existing offering provides a reliable audit trail. 

Over the coming months, Bemi aims to expand its functionality to power event-driven architectures as a whole, and layer in on-premise support, multi-region hosting, and other capabilities for large companies.

Bemi is focusing on medium-sized and larger businesses, and the startup has seen some traction serving healthtech, climate tech, supply and logistics companies, including KLog.

While other businesses are tackling different parts of this problem, Lall says, Bemi’s biggest competition is do-it-yourself solutions, which require lots of in-house resources and expertise.

Feature image courtesy Bemi.

The post Universe alums aim to leverage developer infrastructure experience with Bemi first appeared on BetaKit.

This is the second installment of “The Comeback,” the story of one team’s search for a good problem, and the lessons learned along the way. Read part one: Wrecked, here.

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Sanja Smrzlic was burnt out. 

Years of grueling shifts as a psychiatric nurse had drained her. The constant flip between nights and days left little room for the things she loved—sports, time with friends, and a sense of normalcy. She knew it was time to quit.

She took some time away with her best friend to recharge, but soon enough, reality set in. She needed a new direction. That’s when she stumbled upon a Reddit job posting—a startup called Shoelace was looking to fill a generalist role.

“I applied on a whim, and just said, ‘Hey, I don’t have any skills that you’re looking for, but I used to be a nurse, and I’m good at dealing with angry people, so I think I’d be great with customers,’” Smrzlic recalled.

She started at Shoelace in customer success in 2016. She would mostly focus on troubleshooting for customers, but her curiosity soon drew her to the technical side. With her background as a nurse, she wanted to address problems at their source, not just apply Band Aids.

In 2019, she expressed her desire to become a developer. Shoelace CEO Reza Khadjavi and the rest of the team supported her decision, encouraging her to take night classes and learn on the job.

“The founders put a lot of weight on what you actually do,” she said. “It’s not so much about your qualifications or where you came from. They just care that you can do the work and that you have that risk-taker mentality.”

Smrzlic was on her way to finding her new calling. But Shoelace was also working to identify a new direction of its own.

After two years of internal struggle, driven by Facebook and Shopify strengthening their integration and solving the very challenges Shoelace’s platform had been built to address, Khadjavi made the tough call in late 2019 to shift Shoelace from a product company to a full-service agency for growth marketers.

The company started making money almost immediately. But Khadjavi was still grieving the death of Shoelace as a product business.

“I think it was so existential to Reza, because, in his soul, he wasn’t okay with operating a services business,” said Evan Lee, who joined Shoelace as a performance marketer in 2018.

“I was completely in love with software,” Khadjavi added. “I wanted to build something that people would use, and I viewed the pivot to being an agency as a personal failure.”

A new problem

Much like Smrzlic, Khadjavi wasn’t professionally satisfied running a service business. He wanted to build something. But first, he needed to understand why his first product had failed.

“The thing that we had missed with Shoelace was that if you solve a problem that is not really high priority, then chances are people are not going to have a lot of time for you, they’re probably not going to pay a lot of money for it, and they’ll be more prone to churning,” Khadjavi said.

“Solving a high-priority problem can be very intimidating, but it actually doesn’t take a lot more time or effort compared to solving a low-priority problem,” he added. “In fact, people will give you a lot more of their time and attention.”

That high-priority problem was already beginning to take shape, as during that time, big changes were brewing in the wider digital advertising landscape. 

Creative becomes king

Before 2020, most advertisers spent their time trying to get their ads in front of the right people. Audience targeting was an important revenue lever, allowing brands to optimize their ad spend by reaching specific demographics and maximizing conversions.

But when Apple released iOS 14 in September 2020, it introduced the App Tracking Transparency framework, requiring apps to get user permission for tracking. This update drastically changed the landscape for advertisers, as they could no longer rely on the granular data they once used to identify user behaviors and preferences. With less access to user data, the precision of audience targeting dropped, forcing advertisers to rethink how to best engage their customers.

At the same time, algorithms on platforms like Facebook also got far better at targeting and distribution, which meant brands were often competing with each other for the same audience. Advertisers had to adjust their game plan.

“All signs began to point towards the ad creative—whether it was the visual asset, the image, the video, the content, or the messaging—becoming, by far, the single most important factor influencing revenue for brands,” Khadjavi said.

Ad creative—comprising the visuals, messaging, and overall content of an advertisement—is what communicates a brand’s message, grabs attention, and engages the audience. With targeting becoming less effective, the success of a campaign shifted to rely more heavily on the quality and appeal of the creative itself, making it the key driver of ad performance.

Thanks to Shoelace, Khadjavi had already built strong relationships with performance marketers and agencies, many of whom were feeling the impact of this challenge. The founders were in frequent conversation with these customers, which allowed them to gather key insights from their target audience that would help them identify the next big problem to solve.

“Probably by the first five or six customer calls we had, it was very obvious that we were going to build something around creative,” he said.

Khadjavi heard from his contacts that creative teams were under pressure to produce more content than ever before. Because audiences had increasingly short attention spans and crowded social feeds, the pressure to regularly update organic content was intense. Ads also had a very short lifespan—often just a few days to a couple of weeks—so brands needed to drastically ramp up their creative production to keep up with effective performance marketing.

This meant creating hundreds of new visuals each month. To decide what to include in these products, brands naturally turned to past performance data to guide future creative decisions. 

But creative team members—who are more focused on visual storytelling—often struggled with interpreting data-heavy reports, as they tend to avoid working with spreadsheets and numbers. 

This disconnect led to friction between a company’s creative team and growth team, who relied on data for decision-making.

Khadjavi discovered that what creatives really needed was a tool that incorporated performance data into the visual content they had made, allowing them to actually see what was working and what wasn’t.

“Since the beginning of the Internet, there’s been no shortage of analytics tools and business intelligence platforms like data visualization,” he said. “There’s a never ending list of software companies like that. But no one ever thought to build an analytics product that was designed for creative teams.”

He had finally found a problem that could be solved with software. And now, with a core team of trusted collaborators—including Smrzlic—they were poised to build the solution.

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Coming up: In the third and final chapter of The Comeback, discover how a founding team reassembled its talent, developed a new product, and quickly gained momentum with customers and investors.

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Motion is hiring! Check out their careers page and join one of Canada’s fastest growing tech companies.

All images provided by Reza Khadjavi.

The post Putting a new sense of purpose in motion first appeared on BetaKit.

Professional networking site LinkedIn released its annual list of top Canadian startups today. 

The list is based on the platform’s data across four key pillars: employee growth, jobseeker interest, engagement within the company and its employees, and how well these startups have attracted talent from the companies in the 2024 Best Workplaces list, according to LinkedIn. 

For this list, only fully independent, privately held companies headquartered in Canada were considered. Companies must also have at least 30 full-time employees and be five years old or younger to be considered among other startups, LinkedIn said in a release. 

Cohere and Float topped the list again this year after leading the LinkedIn lineup last year. 

Most of the startups in the list offer digital platforms that serve different needs including one that helps pharmacists streamline manual workflows and another that leverages artificial intelligence (AI) robotics to help insurance brokers handle repetitive tasks. Rounding out the list is a talent agency that supports Black creators and a boutique wellness club. 

Of the 15 companies in the list 11 are headquartered in Toronto and two are based in Vancouver. One startup from Kitchener and another from Montréal also made this year’s lineup. 

The full list can be found below:

1. Cohere (Founded in 2019)

The Toronto-based startup offers an AI-powered platform for enterprises that interprets and summarizes documents, generates texts, and deploys chatbots among other applications. 

2. Float (Founded in 2020)

Headquartered in Toronto, the FinTech startup’s spend management platform solution is designed to help Canadian SMBs streamline their spending and control budgets. 

3. PostGrid (Founded in 2020) 

The Toronto-based software company offers a platform that helps businesses automate, integrate, track, and manage their mail operations. 

4. Hiive (Founded in 2021) 

Founded by several ex-leaders of Toronto-based Setter Capital, the FinTech startup built a venture capital (VC) marketplace that aims to centralize and automate the market for trading private, VC-based stocks. 

5. Pine (Founded in 2021) 

Headquartered in Toronto, Pine aims to guide Canadian homebuyers through every step of homeownership using a platform for buying and refinancing homes and simplifying the mortgage process. 

6. SALT XC (Founded in 2019) 

The Toronto-based digital marketing services agency develops technological solutions to solve clients’ marketing needs using data-informed strategies. 

7. MedMe Health (Founded in 2019) 

Based in Toronto, the Y Combinator graduate offers a software platform that helps pharmacists streamline manual workflows. 

8. Quandri (Founded in 2020) 

The Vancouver-based Quandri’s robot-as-a-service platform is designed to assist insurance brokers in managing repetitive tasks. 

9. Sweat and Tonic (Founded in 2019) 

The Toronto-based wellness and fitness company offers a hub for fitness classes and curated wellness experiences. 

10. Carbon6 (Founded in 2021) 

The Toronto-based e-commerce software aggregator develops software solutions for e-commerce sellers on Amazon. 

11. Felix (Founded in 2019) 

The Toronto-based healthcare start-up helps Canadians access treatments for common health concerns.

12. Kensington Grey Agency (Founded in 2019) 

The Toronto-based talent management agency mainly supports Black creators and aims to address the underrepresentation in the creator economy. 

13. ZumRails (Founded in 2019)

The Montreal-founded FinTech startup offers a payment solution that helps businesses process digital payments, manage invoices and subscriptions, and collect customer data. 

14. OwnersBox (Founded in 2019) 

The Kitchener-based sports-tech company offers a fantasy sports platform that offers users contests with customizable leagues with real-time scoring and rewards. 

15. pH7 Technologies (Founded in 2020) 

The Vancouver-based cleantech company aims to reduce the impact of traditional mining methods. 

Feature image courtesy Cohere.

The post Cohere and Float once again top LinkedIn’s Top Canadian Startups list first appeared on BetaKit.

Toronto-based Cyclic Materials is looking to expand its rare earth recycling infrastructure in the United States and Europe following a $71-million CAD ($53-million USD) round of Series B financing.

The all-equity, all-primary funding round was led by Toronto-based cleantech investor ArcTern Ventures. New investors included BDC Capital’s Climate Tech Fund, Hitachi Ventures, Zero Infinity Partners, Climate Investment, and Microsoft through its Climate Innovation Fund. They joined existing investors Fifth Wall, BMW i Ventures, Energy Impact Partners, and Planetary Technologies.

A spokesperson for Cyclic Materials confirmed to BetaKit that all funding for the round has closed, but declined to disclose when the funding closed. The Series B round brings Cyclic Materials’ total funding to $111 million CAD.

“Not only is our technology essential for supporting sustainable domestic production of rare earths, but it will also play a critical role in re-establishing North American and European leadership in the rare earths industry.”

“We’re energized to partner with the world’s top sustainability-focused infrastructure and corporate investors to scale our technology’s impact,” Ahmad Ghahreman, CEO and co-founder of Cyclic Materials, said in a statement. 

Founded in 2021, Cyclic Materials has developed a supply chain aimed at sustainably recovering rare earth elements from electric vehicle motors, wind turbines, MRI machines, and electronic waste from data centres.

Rare earth elements comprise 17 chemically similar metals that include neodymium, dysprosium, and cerium.

These are called rare because they are not often found in concentrated and economically exploitable deposits, making their extraction and processing difficult. These elements are used in a wide range of modern technologies, including smartphones, computers, wind turbines, and electric vehicle motors.

In the statement, the startup said rare earth elements are currently not recycled at a commercial scale and end up in landfills. The company’s goal is to create a circular supply chain by taking landfill-bound products and recovering their critical metals through its magnet recycling processes.

Cyclic Materials’ spokesperson said these processes include a two-stage approach to recovering rare earth elements from end-of-life products. The first stage, which uses its MagCycle technology, mechanically extracts magnets from magnet-bearing materials like electronic motors, while separating other metals such as copper, aluminum, and steel. The second stage, which uses the startup’s REEPure technology, employs a chemical process to produce a Mixed Rare Earth Oxide, which is a key input for magnet production.

RELATED: Ayrton Energy raises $9.1 million CAD in bid to expand clean hydrogen solution in the US

“Not only is our technology essential for supporting sustainable domestic production of rare earths, but it will also play a critical role in re-establishing North American and European leadership in the rare earths industry,” Ghahreman added.

Another opportunity Cyclic Materials is working on is its product, CC360, which is targeted at data centres. Typically, hard drives are sent to IT asset disposal (ITAD) companies for data destruction and shredding to recover metals like gold and silver, but rare earths are not recovered in this process, the startup said in the news release. 

CC360 enables ITAD companies to separate certain hard drives specifically for rare earth recovery, while the remaining drives go through the usual recycling process. These extracted magnets are then processed using Cyclic Materials’ methods.

“This alignment with our impact-driven investment strategy is why we chose them to become a part of ArcTern’s investment portfolio.” 

RELATED: Pangaea Ventures closes $115-million CAD impact fund to back sustainability-focused hardtech solutions

Cyclic Materials has been trialling CC360 with companies like Sims Lifecycle Services. In August, the startup signed a partnership with United Kingdom-based Synetiq for the recycling of electric motors containing rare earth elements. That agreement marks the startup’s first deal to source raw materials from an international supplier.

Microsoft’s investment, which comes from its Climate Innovation Fund, was first announced in July. While that announcement did not disclose whether Microsoft was a customer of Cyclic Materials, Ghahreman did note the startup’s tech will “prove invaluable to large data centre operators such as Microsoft as they work towards their circularity and sustainability goals.” 

The Series B funding also closely follows Cyclic Materials receiving a $4.9-million CAD grant from Natural Resources Canada that supports the continued operation of Cyclic Materials’ commercial demonstration facility for producing high-purity rare earth elements from recycled magnet material. Earlier this year, Cyclic Materials was one of 13 Canadian companies named to the 2024 Global Cleantech 100 list.

“Cyclic Materials’ mission-driven approach to the circular economy combined with its proprietary rare earth metals recycling processes offers a scalable decarbonization solution that contributes to the abatement of greenhouse gas emissions,” Marc Faucher, managing partner at ArcTern Ventures, said in a statement.

The new funding will be used to accelerate the startup’s international growth. Cyclic Materials plans to use this capital to build rare earth recycling infrastructure in the US and Europe, and to grow its team.

Feature image courtesy of Cyclic Materials.

The post Microsoft among corporate investors backing Cyclic Materials’ $71-million CAD Series B first appeared on BetaKit.

Introducing “The Comeback,” the story of one team’s search for a good problem, and the lessons learned along the way. Read part two: Rebuilt here.

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Pivot or die. For Shoelace co-founder and CEO Reza Khadjavi, the need to choose hit him like a punch to the gut.

It was 2019, and four years had passed since Khadjavi and his co-founders launched the Toronto-based adtech startup. Despite amassing over 6,000 users and growing the team to 40, the advertising landscape had suddenly shifted dramatically.

As a result, growth had plateaued, cash was dwindling, and the company faced a crisis with no easy fix.

“Things were starting to get pretty dangerous,” Khadjavi recalled.

It is a far cry from where Khadjavi and his co-founders are today, but it was this turning point that allowed them to find success in their current venture: Motion. 

To understand that journey, and how its lessons helped the founders close a $30-million USD financing round this month, we first need to revisit how Shoelace ended up so close to the brink.

Dropping out and starting up

Khadjavi’s path to entrepreneurship didn’t start with a grand plan or a clear vision. It began with a simple reality—in 2008, he had dropped out of Concordia University. 

He already loved business, but realized that school wasn’t going to teach him what he wanted to know. He and his older brother, Ali, decided the best way to learn was to start a business themselves. The pair had no money, no hard skills, and admittedly, no real idea of what they were doing.

They brainstormed all kinds of ventures—and considered starting a moving company or house painting business before landing on a dry-cleaning service. The brothers called it Nettoyeurs Express, and soon found themselves picking up laundry in Montréal, having it cleaned at local dry cleaners, and delivering it back.

Khadjavi wanted customers to be able to choose their delivery dates, and experience seamless service at the touch of a button. But they had no capital to build the software platform they needed to run the business well, and they couldn’t afford to hire someone.

And so he decided to figure it out on his own. Khadjavi spent his mornings on the road, handling deliveries, and his nights hunched over a computer, teaching himself how to code.

“If you have something that you really want to build, it becomes a lot easier,” Khadjavi said recently. “I always had something specific that I wanted to change on our website, and I was Googling my way to figuring out how to code it.”

With some help from a friend, the platform was built in a couple of months. It was janky, but it worked. More importantly, it ignited something in Khadjavi.

“I just felt like there was something really magical about software, both as a craft and as a business,” he said.

And so, in 2014, Khadjavi took a pause on being an entrepreneur, sold his laundry business, and took a job as a software developer at a Toronto-based retail startup called Hubba. 

It was there that he met Alexander Sloan and David Berglas, who would soon become his co-founders.

Hubba was a product discovery platform that connected brands with retailers, helping them showcase their products and enabling buyers to find new inventory for their stores. Led by an executive team with experience at BlackBerry, Wattpad, Mozilla, GMP Securities, and Workbrain, Hubba was, at the time, one of Toronto’s fastest growing startups.

Sloan was a software engineer, and Berglas was an early marketing, sales, and customer success hire.

“We were in this crammed little office in the MaRS building, and we were sitting next to each other, and we would work on the same features,” Sloan remembers. “Reza would build up the frontend for the features, and I would build out the backend. That’s how our working relationship started.”

For months after work, the trio would talk about creating their own startup and what Khadjavi describes as “the itch” to build.

In 2015, they took the leap, leaving Hubba looking for a problem they could solve with tech. 

“We had endless ideas,” Sloan recalled. “Reza has a head full of ideas. Always has, still does. He’s a very good product thinker, and he’s always coming up with things. Maybe we were just young and naive, but we were sure we would find something.”

Khadjavi described that period as one of “delusional confidence.” 

The co-founders all believed their product thinking and technical chops would be enough to land them a winning idea.

At the time, Toronto’s tech scene was booming—acquisitions were happening left and right, growth seemed limitless, and tech founders were becoming some of the city’s biggest names. The state of optimism in Toronto tech fed into their belief that they’d soon hit on something big.

“We thought that surely, if we put our heads together and go all in and spend all of our time trying to build something together, it would work out,” Khadjavi added.

Facebook Ads, simplified

After a healthy mix of productive discussion and heated debates, the trio began to focus on advertising. More specifically, Facebook ad targeting.

At the time, Shopify had about 50,000 merchants on its platform, and Khadjavi saw Facebook as a “phenomenal” untapped distribution channel. The two platforms didn’t communicate well with one another back in 2015, and that’s where their new company would come in. 

Khadjavi, Sloan, and Berglas built a platform that simplified Facebook’s ad setup for e-commerce stores by automating tasks like inserting code snippets and syncing product catalogues. It removed the need for manual input, allowing brands to quickly launch their first Facebook ads with minimal effort.

They named the company Shoelace, a nod to their initial idea of a cross-promotion platform, where businesses would connect like the criss-cross of a shoelace. The startup launched in 2015.

The idea took off relatively quickly. 

With Khadjavi as CEO, Sloan as CTO, and Berglas as COO, the team was accepted into the Boomtown Accelerator, in Boulder, Colorado. There, they learned the basis of building a minimum viable product, understanding customer needs, and validating an initial concept.

They returned to Toronto with big plans to continue scaling the platform. The app found its first customers and began generating revenue the following year.

Shoelace would also raise a modest amount of funding during these first few years: roughly $2 million in what Khadjavi described as “tiny bits and pieces—whatever we could scrape together.”

In the first two years, the business didn’t seem to need much external funding. Khadjavi said Shoelace started out as scrappy and capital efficient, and often found itself right on the brink of profitability.

But they never quite reached it.

The road to rock-bottom

Shoelace had what seemed like the ingredients for a successful startup: a growing business with healthy revenues and a potentially global customer base, led by a founding team that clicked.

But in 2018, the ground beneath their feet shifted dramatically. 

“When I joined, it was already a services business, but I think there was just a reluctance to call it that.”

Evan Lee

Facebook and Shopify—already tech sector powerhouses—strengthened their integration. The issues that Shoelace’s automation had been designed to address were suddenly solved. 

The gap that Shoelace bridged no longer existed.

“The writing was on the wall that the market didn’t really need a product like ours anymore,” Khadjavi recalls.

Shoelace customers no longer needed their product, but they continued coming to the company for advice. Suddenly, the team found itself helping brands build and manage ad campaigns, implement their growth strategies, and execute media buys. 

“Shoelace evolved to being more or less a full services business, because that’s what people in that space need,” Sloan said. “These entrepreneurs are busy people, and they often need the education and someone to bounce ideas off of. Sometimes, they just need someone to do this work for them.”

And so Shoelace’s team began doing marketing work directly, setting up and managing campaigns. Evan Lee, who joined Shoelace as a performance marketer in 2018, played a key role in this effort.

“It was a bit of a shitshow on the ground,” Lee recalled. “Everyone else’s portfolio was dying. People were leaving left and right. But my accounts were thriving. I didn’t think I was special, so I tried to focus on taking what was working and applying it so we could then achieve scale.”

Khadjavi credits the work of staff members like Lee and others as being what “saved” Shoelace during this time.

The services side of the business quickly became its biggest value generator, meaning that Shoelace was no longer really a software company.

“When I joined, it was already a services business, but I think there was just a reluctance to call it that,” Lee remarked. 

That reluctance came chiefly from Khadjavi, who admits he struggled to accept the changing nature of the business.

“The word ‘agency’ became this taboo word that people didn’t really want to mention at the company, because they knew I hated it,” Khadjavi said.

Agency or not, Shoelace was still in trouble. By 2020, the startup’s gross monthly recurring revenue churn reached nine percent, nearly double the SaaS industry average. As the company exhausted its pool of new leads, replacing those lost customers became increasingly difficult. 

Shoelace faced a similar threat: they could either try to improve the software behind their original idea, or pivot to becoming a full-service agency to help Shopify merchants with their growth marketing. 

But without a clear software problem to solve, the former option would have very likely spelled the end of the company.

“It eventually came down to pivoting to an agency or death,” Khadjavi added. “So what do you pick? When I was faced with that choice, I decided: let’s choose to live. Let’s live.”

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Up next in The Comeback: Shoelace’s founders make a pivot and zero in on the problem that set something new in motion.

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Motion is hiring! Check out their careers page and join one of Canada’s fastest growing tech companies.

All images provided by Reza Khadjavi.

The post How adtech startup Shoelace ended up at the brink of death first appeared on BetaKit.

Kitchener-Waterloo-based artificial intelligence (AI) startup Scribenote has closed $11 million CAD ($8.2 million USD) in seed funding as it looks to advance the capabilities of its scribe tool for veterinarians.

The round was led by Andreessen Horowitz (a16z), with participation from Inovia Capital, the Velocity Fund, and undisclosed angel investors.

A 2022 study found that almost 90 percent of veterinarians surveyed across Canada suffered from burnout.

Scribenote has developed an AI-powered medical scribe designed to help veterinarians streamline their documentation process. The startup found its origins in 2019 when CEO Ryan Gallagher, a University of Waterloo engineering student at the time, noticed his sister and small animal veterinarian Dr. Katie Gallagher consistently worked late to catch up on medical records.

Canadian veterinarians are reportedly facing increasing levels of burnout due to heavy workloads, staffing shortages, and emotional stress. A 2022 study found that almost 90 percent of veterinarians surveyed across Canada suffered from burnout, which can include high exhaustion, high depersonalization, and low professional efficacy. 

The impact of burnout among veterinarians can be devastating. According to international advocacy group Not One More Vet, vets are 2.5 times more likely than the general public to die by suicide.

Scribenote, co-founded by CEO Ryan Gallagher, veterinary lead Dr. Katie Gallagher, CPO Alina Pavel, and veterinary student Emily Merry, records conversations between veterinarians and clients and uses AI to quickly generate accurate medical records. The platform also automates client communication and dental charts, allowing veterinary professionals to focus on patient care.

“As the market-leading AI scribe for veterinarians, Scribenote automates burdensome documentation requirements, so vets can focus on the parts of the job they love,” Olivia Moore, partner at a16z, said in a statement. “The Scribenote team has deep empathy for the daily challenges veterinarians face and a hands-on understanding of their workflow.” 

RELATED: Viggle AI closes $26-million CAD Series A to expand AI-powered video generator

The startup claims its customers have reported the platform has allowed them to take lunch breaks, spend more time with family, and focus more on their patients. Some have said the tool is particularly useful for note-taking if they lose mobility in their hands, which is another common ailment faced by veterinary professionals.

With the new funding, Scribenote plans to improve its platform’s AI capabilities. The company’s current focus is on developing personalized AI scribes for each veterinarian and creating a streamlined platform for efficiently editing and finalizing records.

“We see a world where pet care is so affordable and accessible that anyone can experience the precious bond between animals and humans, and we want to build technology that increasingly enables that world,” Ryan Gallagher said in a statement.

Feature image courtesy of Unsplash. Photo by Alexis Antoine.

The post a16z leads Scribenote’s $11-million CAD seed round to boost AI-powered writing tool for vets first appeared on BetaKit.

What does the future of tech look like on Canada’s Best Coast?

We’re thrilled to announce BetaKit Town Hall: Vancouver on Oct. 22, in partnership with Vancouver Entrepreneurs Forum (VEF).

The event will feature a fireside chat and AMA with Jack Newton, CEO of Clio. More speakers will be announced over the weeks to come.

Held at the iconic UBC Robson Square, the Town Hall will bring together founders and leaders from across the BC and Western Canada tech ecosystems for a pulse check on the state of innovation, productivity, optimism, and more.

The event will feature a fireside chat and AMA with BetaKit editor-in-chief Douglas Soltys and Jack Newton, CEO of Clio.

Fresh off the largest funding round in Canadian technology history, Newton will share Clio’s journey, his vision for the future, and insights into what makes Vancouver a special place for technology and innovation.

“I’m thrilled to be a part of the BetaKit Town Hall, where the future of Canada’s tech ecosystem takes centre stage,” said Newton. “Vancouver is home to top tech talent, amazing companies, and enormous opportunity. I’m excited to bring the ecosystem together to talk about what happens next.”

A roster of featured speakers will be announced over the weeks to come, as part of a vantage points panel on the top issues, opportunities and challenges faced by the tech sectors in Vancouver, British Columbia, and Western Canada.

This event comes as Vancouver prepares to host its first Web Summit in May 2025.

“As Vancouver’s Premier networking forum for technology entrepreneurs, we’re proud to be working with BetaKit to host this important conversation,” said Michelle Sklar, chair of VEF. “This is an opportunity to convene and connect on how to take our city and our companies to the next level, and celebrate everything unique about our ecosystem and its accomplishments.”

The first BetaKit Town Hall in May 2024 featured Shopify CEO Tobi Lutke in conversation with BetaKit Chair Satish Kanwar, as well as a vantage points panel including Cohere’s Ivan Zhang, repeat founder Ali Asaria, Medessist CEO Joella Almeida, and Jocelyne Murphy, a young engineer and founder who had the mic drop moment of the event.

Hosted in Toronto, the Town Hall featured founders, funders, and leaders from all over Canada, including representation from the Yukon, British Columbia, Québec, and across Ontario, including many from the Waterloo Region.

Sylvia Ng, CEO at ReturnBear, said of the event, “It was a great reminder that we all have a role to play in fostering innovation in the next generation of Canadians.”

Register for tickets to BetaKit Town Hall: Vancouver now.

The post Clio’s Jack Newton headlines BetaKit Town Hall: Vancouver on Oct 22 first appeared on BetaKit.

Calgary-based cleantech startup Ayrton Energy has closed $9.1 million CAD ($6.7 million USD) in seed financing to advance the US expansion of its hydrogen storage solution. 

The all-equity, all-primary financing round was led by Boston-based Clean Energy Ventures and the Crown corporation Business Development Bank of Canada’s investment arm, BDC Capital. Other participants included Antares Ventures, EPS Ventures, SOSV, The51, and the University of Calgary’s UCeed Investment Funds.

“We believe our industry-agnostic solution will be a step in the right direction to democratize energy access globally.”

Ayrton is developing a hydrogen storage system that operates at low temperatures and low pressure. The system allows hydrogen to be stored in an organic liquid, which the startup says makes it more affordable and safer than current storage options since it can be handled no differently than gasoline.

According to a 2023 report by Deloitte, clean hydrogen is expected to deliver up to 85 gigatons in cumulative CO₂ emissions reductions by 2050.

Ayrton believes it can solve two major pain points in the clean hydrogen sector: the high costs of transport and the lack of dedicated storage infrastructure.

Unlike fossil fuels such as gasoline and natural gas, which are often transported and stored with pipelines, railcars, and tankers, hydrogen is more costly and complex to transport and store, according to Ayrton. This is because hydrogen requires high-pressure containers or extremely low temperatures to keep it stable.

“Enabling the widespread production of clean hydrogen will be the backbone of an emissions-free future, and we believe our industry-agnostic solution will be a step in the right direction to democratize energy access globally,” Natasha Kostenuk, founder and CEO of Ayrton Energy, said in a statement. 

“We’re grateful to our amazing cohort of investors whose expertise in scaling technologies commercially will be integral as we continue to grow our customer base.”

Ayrton was founded in 2021 by Kostenuk, who studied mechanical engineering at the University of Calgary, and CTO Brandy Kinkead, who holds a PhD in chemistry from Simon Fraser University. 

RELATED: Alberta looks to hydrogen as the “next frontier” in energy, invests $45 million in related technologies

Ayrton Energy will use the financing to scale its technology, double the size of its team, and expand operations into energy hubs in the United States. The startup told BetaKit is looking to establish its US base in Houston, Texas, and has potential future projects in California, Texas, and states on the northeast US.

Hydrogen is playing an increasingly important role in the clean economy transition due to its potential as a versatile and sustainable energy carrier. This growth is particularly evident in Alberta, where the provincial government has set its sights on positioning Alberta as Canada’s capital for clean hydrogen production.

Earlier this year, Ayrton Energy received $1.7 million in funding from Alberta Innovates as part of a broader $57-million investment into 28 hydrogen power projects in the province. Hydrogen tech companies rooted in or operating within Alberta include Aurora Hydrogen, Proton Technologies, and Ekona Power.

“Ayrton’s technology will enable sizable greenhouse gas reduction and help Canada reach its 2030 and 2050 climate targets,” Cheri Corbett, partner and team lead at BDC Capital’s Climate Tech Fund, said in a statement.

Feature image courtesy TomFawls, CC BY-SA 3.0.

The post Ayrton Energy raises $9.1 million CAD in bid to expand clean hydrogen solution in the US first appeared on BetaKit.

Simon Bourgeois is no stranger to payroll.

For over three years, he led Toronto-based Humi, which offers payroll, human resources (HR), and benefits software solutions to Canadian businesses. It was during his time as CEO of Humi that he tracked the industry’s shift toward embedded payroll. 

Bourgeois left Humi in 2022, and since then has been working with a founding team of other ex-Humi leaders to scale his latest venture: Nmbr. The startup, which is backed by Panache Ventures, Golden Ventures, Motivate Venture Capital, and Luge Capital, is developing infrastructure to simplify building payroll products.

“There was a recognition that infrastructure like this was the missing piece in our ecosystem.”

“We felt passionate about doing something that could accelerate the industry in a way that wasn’t really possible in Canada at the time, and really until our launch, hasn’t been possible,” Bourgeois, now Nmbr’s co-founder and CEO, told BetaKit in an interview.

Nmbr is currently focused on embedded payroll, which refers to infrastructure that integrates payroll functionality directly into existing software platforms. It represents a shift away from traditional setups, where payroll is typically handled by standalone software or external providers. This old model often leads to inefficiencies and disconnects between departments like HR and accounting.

Bourgeois’s interest in embedded payroll began during his time at Humi, where he observed the success of Check—a US-based company that he said pioneered this category of FinTech.

“I saw them launch that business and became really excited about its potential to help us bring our business, originally at Humi, into the US,” Bourgeois said. “There was a recognition that infrastructure like this was the missing piece in our ecosystem that would enable platforms to more quickly evolve and deliver great products for their customers.”

Unlike Humi, which targets employers directly, Nmbr serves software companies that want to embed payroll functionality into their software offerings. 

Nmbr’s main product is an application programming interface (API) that allows software providers to embed payroll and tasks like tax calculation, regulatory compliance, and funding flows into their offerings. The startup also offers customizable and embeddable components within partners’ platforms to simplify front-end development. The movement of money with Nmbr is made possible through a banking partnership with the Royal Bank of Canada’s innovation arm RBCx.

The startup’s founding team includes CEO Bourgeois, as well as CRO Drew Millington, and CTO Kevin Langlois. Millington also co-founded and served as CRO at Humi, while Langlois served as Humi’s senior vice president of engineering.

Bourgeois estimated there were 12 payroll software providers in Canada last year, and Nmbr is working with six partners that plan to launch payroll products in the coming months. The startup aims to help launch a total of 12 new payroll products over the next 15 months, which would put it on track to power roughly half of all payroll products in Canada by the end of 2025.

RELATED: Humi co-founder’s nuclear power venture closes $27-million USD Series A

According to Nmbr, its customers include industry players who are looking to add payroll alongside accounts payable automation, employee scheduling, construction management, e-commerce, and employee benefits management.

Absent from that group is Bourgeois’s last company. “Humi is one of the fortunate companies to have great infrastructure themselves,” he said. “Right now, the companies that we’re working with are companies that are looking to launch new payroll offerings.”

Still, Bourgeois believes embedded payroll has value for companies already offering payroll, citing Canadian tech company Wave announcing plans in April to begin using Check’s infrastructure in the US market.

“It’s a great example of how embedded payroll companies and the infrastructure we provide not only serves to help software providers launch new payroll products, but how we can help existing payroll providers improve their offerings as well,” he added.

To date, the startup has raised $7.6 million CAD in seed funding from institutional investors including Panache Ventures, Golden Ventures, Motivate Venture Capital, and Luge Capital. Of the $7.6 million, $2.5 million CAD closed in July 2023, while the remaining $5.1 million CAD closed in June 2024, according to Bourgeois.

RELATED: National Bank reinvests as Walnut secures $4.6 million to expand embedded insurance capabilities

“We’ve been able to invest deeply in creating something that enables a very fast development and is extremely scalable and reliable,” he said, calling Nmbr’s current offering “the most modern payroll infrastructure that we’re aware of, not just in Canada, but potentially the world.”

While Bourgeois said Nmbr is currently focused on payroll in Canada, its seed funding is also helping the company explore market opportunities elsewhere. However, Bourgeois said it is too early to announce which countries they are exploring, as the current focus is on finding success in Canada. 

He said in many countries, people are still paid on antiquated systems because the infrastructure that powers payroll products is complex. “It makes it very hard for innovation to occur that helps employers and employees get paid in a way that’s better for all of them,” he added.

“This infrastructure layer that we’re building, whether it’s in Canada or it’s in a country on the other side of the world, allows for innovation in this space that gives business owners better access to products that can get their employees paid in a digital way.”

Feature image courtesy of Nmbr.

The post With Nmbr, former Humi execs want to power embedded payroll products across Canada first appeared on BetaKit.

Former Canadian Venture Capital and Private Equity Association (CVCA) chair and Lumira Ventures managing partner Peter van der Velden has publicly criticized CEO Kim Furlong for her handling of a recent meeting with international limited partners (LPs) in London, UK.

In a September 20 LinkedIn post, van der Velden alleged that “the meeting was a bit of a miss because the CEO of the CVCA appeared unwilling or unable to advocate for the largest part of its membership.” 

Van der Velden lodged three specific complaints. He claimed Furlong: failed to adequately highlight the Canadian venture capital (VC) story; spent too much time providing a broad Canadian economic update; and indicated that Canadian pension funds are not backing more domestic VCs because they focus solely on performance, when he believes other factors are at play. ​​BetaKit has not independently verified van der Velden’s account of what transpired at the meeting.

“This event had 1 purpose, build engagement & attract foreign capital to CDN VC GPs & companies, & the CVCA CEO just threw the entire sector under the bus.”

According to van der Velden, the meeting was organized by the Global Affairs Canada liaison to the CVCA, hosted by former Canadian Member of Parliament Ralph Goodale at Canada House, and about encouraging foreign investors to participate in Canadian VC as co-investors or LPs, connecting this group with Canadian general partners (GPs). “This event had 1 purpose, build engagement & attract foreign capital to CDN VC GPs & companies, & the CVCA CEO just threw the entire sector under the bus,” he alleged.

Throughout the LinkedIn post, van der Velden did not refer to Furlong by name, only “the CVCA CEO.” When reached by phone regarding his post, van der Velden told BetaKit that he had nothing more to add.

BetaKit reached out to Furlong and the CVCA for a comment in response to van der Velden’s post. Furlong did not respond by publication time, while a spokesperson for the CVCA asserted in a statement that it “remains dedicated to fostering constructive stakeholder engagement on access to capital and championing Canada as an attractive destination for investment.”

In its statement, the CVCA did not respond directly to van der Velden’s comments, instead offering a more general reply: “The CVCA provides numerous opportunities for members to share candid feedback, at the board level, in committees, through surveys, and in one-on-one discussions. CVCA takes pride in representing the interests of all our members—the investors behind the creation of thousands of jobs, the advancement of innovative technologies, and the strengthening of local economies across the country.”

“Across industries, a diversity of perspectives is expected, especially on issues that are vital not just to the success of our sector, but to the future of Canada as a whole,” reads the statement. “The CVCA remains dedicated to fostering constructive stakeholder engagement on access to capital and championing Canada as an attractive destination for investment.”

Van der Velden is the founder and managing partner of Lumira Ventures, a Toronto-based healthcare and life sciences VC firm that is currently working on the launch of its next fund. He held senior roles with the CVCA between 2008 and 2016, including serving as president and chair in 2012 and between 2014 and 2016.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

According to van der Velden, Furlong should have done a better job of selling Canada’s VC industry at the meeting by outlining its “growth, VC-backed success stories, strong financial performance, how GPs have thrived despite the lack of domestic [pension plan] engagement, and why GPs like those in the room are tougher & more resilient because of it.”

Canada is home to some of the largest pension funds in the world, but they have among the smallest domestic allocations globally, according to FDI Intelligence.

Canada’s eight largest pension funds, sometimes referred to as the Maple 8, include the Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan, Alberta Investment Management Corporation, Public Sector Pension Investment Board (PSP Investments), the Ontario Municipal Employees Retirement System (OMERS), and Healthcare of Ontario Pension Plan.

Recently, there has been strong debate over whether the Government of Canada should force them to invest more in Canada. Supporters of this idea have argued that it could help address Canada’s productivity woes and ensure greater access to capital for domestic businesses, while detractors—including the pension funds themselves—say introducing local investment rules would compromise their mandates to provide secure retirement income for Canadians.

RELATED: John Ruffolo has advice for Canada’s pension funds

According to van der Velden, in response to a question from a UK family office about why, while Canada’s largest pension funds are investing heavily on a global basis, top Canadian VCs have been forced to fundraise abroad, Furlong said, “The reason for the lack of engagement is because the Maple 8’s sole objective is performance.” 

Van der Velden took issue with this response, which he claimed does not convey the whole story, including that save for OMERS and CDPQ, Canada’s big pension funds have largely been disengaged from the VC since the mid-2000s when they became “quasi [private equity] firms,” that they have consistently articulated to foreign and domestic GPs that the cheque sizes in Canadian VC are too small, and that they have failed to build teams with the experience necessary to truly engage the industry.

In a reply to van der Velden’s LinkedIn post, Impression Ventures founder and managing partner Christian Lassonde noted that his firm left the CVCA years ago, adding, “it’s not clear to us who exactly they are advocating for anymore.”

“As a trade association for VC/PE members, the CVCA’s fundamental role is to advocate for the CDN VC/PE sector and this means having a CEO who is passionate, high conviction and unfailingly willing to promote our sector to LPs everywhere by delivering the message that the CDN VC asset class can & should be accretive to their overall performance,” reads van der Velden’s post.

“If the CEO won’t do that for the majority of members then that is a problem.”

Feature image courtesy Unsplash. Photo by JP Valery.

The post Former CVCA chair alleges CEO Kim Furlong “appeared unwilling or unable to advocate” for membership in meeting with foreign LPs first appeared on BetaKit.

The public dispute between Toronto-based Bitcoin mining company Bitfarms and its investor and competitor Riot Platforms is finally drawing to a close, as both companies have entered into a settlement agreement that includes key changes to Bitfarms’ board.

As part of the settlement, which was filed with the United States Securities and Exchange Commission today, director Andrés Finkielsztain has stepped down from Bitfarms’ board. Bitfarms has appointed Amy Freedman to its board and its governance, nominating, and compensation committees.

“We look forward to supporting a reconstituted Bitfarms board and continued engagement with management.”

Jason Les, Riot Platforms CEO

Riot, meanwhile, has withdrawn its June requisition to hold a vote aimed at reconstituting Bitfarms’ board. Riot has also committed to refrain from any actions that might disrupt or challenge Bitfarms’ control or operations until the company’s 2026 annual meeting, a move Bitfarms described as “customary standstill provisions.”

In a statement, Riot CEO Jason Les said the settlement marks an important step to advance shareholder value creation at both companies.

“As Bitfarms’ largest shareholder, we look forward to supporting a reconstituted Bitfarms board and continued engagement with management,” Les added.

According to Bitfarms’ latest announcement, the special meeting of shareholders, which was initially slated for October 29, will now take place no later than November 20. At this meeting, shareholders will vote on expanding the board from five to six members, electing an independent director nominated by the board, and ratifying Bitfarms’ shareholder rights plan. Bitfarms said Riot has agreed to vote in favour of these changes.

Under the terms of the settlement, Riot has also been granted the right to purchase additional shares of Bitfarms, as long as it continues to own at least 15 percent of the company’s total outstanding common shares.

“We are pleased to reach this agreement with Riot and look forward to turning our full attention to executing our growth strategy,” Bitfarms CEO Ben Gagnon said in a statement. “We remain focused on diversifying the business beyond Bitcoin mining into exciting and synergistic new areas like energy generation, energy trading, heat recycling, and other high-value revenue streams.”

Boardroom brawl

Founded in 2017, Bitfarms owns and operates Bitcoin mining farms and provides computing power to cryptocurrency networks. The company trades on the Toronto Stock Exchange and Nasdaq under the symbol “BITF.” Colorado-based Riot is currently the largest shareholder in Bitfarms.

This settlement between Bitfarms and Riot follows nearly six months of public clashes between the two companies. The tension began in the spring when Riot revealed that Bitfarms had rejected its $950-million USD bid to acquire the company. 

This rejection prompted Riot to issue public statements questioning Bitfarms’ leadership and to gradually increase its stake in the company. In response, Bitfarms attempted to adopt various ‘poison pill’ strategies via shareholder rights plans to prevent Riot from gaining further control.

RELATED: Riot Platforms raises stake in Bitfarms following Riot’s rejected takeover bid

In June, Riot requisitioned a special meeting that would have given Bitfarms shareholders the chance to vote out Bitfarms chairman and interim CEO Nicolas Bonta and Finkielsztain. Bonta, for his part, stepped down in August and was replaced by Ben Gagnon as CEO and Brian Howlett as chairman.

Riot’s June requisition also proposed replacing Bonta, Finkielsztain, and recently departed co-founder Emiliano Grodzki with three new board members. Incoming board member Freedman was one of the nominees put forward by Riot.

In August, Bitfarms announced plans to acquire American firm Stronghold Digital Mining in a $125-million USD stock-for-stock merger deal. An industry expert indicated to BetaKit that Bitfarms may have turned down Riot’s acquisition offer to avoid jeopardizing this merger, adding that Riot would likely need additional capital to successfully acquire Bitfarms in light of the deal.

The announcement of the Stronghold merger led to another testy public exchange, with Riot warning that Bitfarms’ board “should not enter into any financing transaction” before a special shareholder meeting could be held.

Both companies’ stocks have increased since the announcement of the settlement. BITF traded at $2.06 USD at press time, up 2.75 percent today.

With files from Alex Riehl.

Feature image courtesy of Unsplash. Photo by Benjamin Child.

The post Months-long dispute between Bitfarms and Riot Platforms draws to a close as companies reach settlement  first appeared on BetaKit.

Vancouver and Phoenix, AZ-based venture capital firm Pangaea Ventures has held the final close of its $115-million CAD ($85-million USD) impact fund that will invest in HardTech solutions that they claim will address the health of the planet.

This is Pangaea’s fifth and largest fund to date. The fund, which will follow a five-year investment period, has already backed five ventures, including one Canadian tech startup: Vancouver-based pH7 Technologies. According to a spokesperson from Pangaea, half of the fund has already been allocated.

“The breakthroughs in advanced materials, chemistry, and biology that we support not only deliver returns but also drive real, meaningful change.”

Founded in 2000, Pangaea Ventures focuses on identifying and investing in high-potential HardTech ventures. The firm’s portfolio includes a few notable names in Canada’s tech sector, including Vancouver-based Aspect Biosystems and Halifax-based CarbonCure.

Pangaea invests in HardTech companies across clean energy, sustainable agriculture, and biosciences.

The firm’s spokesperson told BetaKit the fund invests at the Series A stage, and will deploy between $3 million and $5 million per round, typically as a lead or co-lead. Pangaea began fundraising for its fifth fund in July 2022, and closed all capital in April 2024. The fund plans to make between 10 and 12 investments total.

According to Pangaea’s spokesperson, the fund is backed by corporate limited partners from Asia, Australia, Europe, and North America. While the spokesperson declined to share names, they did note that there is a mix of new and returning investors composed of financial investors, family offices, and foundations.

The fund’s first Canadian investment is pH7, which develops environmentally friendly solutions for metal extraction. pH7 is working on clean, low-impact methods to recover critical metals used in renewable energy technologies, such as electric vehicles and solar panels. The startup aims to reduce environmental harm typically associated with traditional mining and metal extraction. Pangaea participated in pH7’s $16-million USD Series A financing round, which closed in March 2023.

In addition to ph7, Pangaea’s new fund has also invested in American startups Ardent Process Technologies, Versogen, Kanvas Biosciences, and Biodel AG. Pangaea’s spokesperson said while there is no set allocation for Canadian companies, the fund will primarily focus on Canada and the United States, with half of the $85 million USD being saved for follow-on investments.

RELATED: Teralys Capital says it “should” hit $570-million fund-of-funds target by end of year

“The breakthroughs in advanced materials, chemistry, and biology that we support not only deliver returns but also drive real, meaningful change,” Chris Erickson, general partner at Pangaea Ventures, said in a statement. 

The firm invests in startups that address three key challenges: climate change, food and water security, and healthcare. On its website, Pangaea claims its portfolio has contributed to 7.5 million tons of CO₂ reduced, 17.7 million cubic metres of fresh water saved, and 4.4 million tons of food produced to date. 

In addition to closing its latest fund, Pangaea is also announcing a new office opening in Tokyo, Japan. The firm said it plans to use that office to identify and back startups in the region.

Pangaea is the latest in a recent wave of venture capital firms that have secured fresh capital. Last week, Teralys Capital announced it had raised $475 million of its $570-million fund-of-funds target. In the past month, Luge Capital, Northside Ventures, MKB, and Radical Ventures have also launched new funds or secured new commitments.

Feature image courtesy of Unsplash. Photo by Jed Owen.

The post Pangaea Ventures closes $115-million CAD impact fund to back sustainability-focused hardtech solutions first appeared on BetaKit.

Two data sets dropped this week, giving granular insight into the state of early-stage startups in Canada. A proprietary report from Panache Ventures estimates technology company creation is up nearly 31 percent in the first two quarters compared to last year. That’s enough of a positive signal for the firm’s GP, Prashant Matta, to call a market bottom, expecting more startups to emerge. 

But these founders are facing a challenging investment climate, and are thus choosing to bootstrap or remain in stealth. A CVCA report noted dramatic declines at the pre-seed and seed stage in the first half of 2024 compared to the same period last year. Total dollars invested plummeted 48 percent while total deal count declined 31 percent.

What led to this? Macroeconomic conditions, in short. Central banks raised interest rates to clamp down on rapid inflation, which pushed investors into safer asset classes. That made it incredibly difficult for VCs, especially emerging managers, to raise or deploy new capital. An RBCx report from July illustrates just how bad things are: Canadian VCs are experiencing the worst fundraising year in about a decade, netting only $500 million in the first half of 2024. It’s unlikely firms will get to the $1.8 billion raised last year, let alone the $7.4 billion in 2022 at the height of the bull market.

So will the VC market bottom out in time to fund these newly created companies? Matta at Panache is sanguine, expecting LPs to return to the VC asset class over the next two years as interest rates come down, making the cost of capital cheaper, and an increase in exits creates more liquidity. “I believe demand (founders/startup creation) to be a leading indicator as money (GP and LP) usually follows the most compelling and innovative tech businesses,” he told me.

One early-stage investor I spoke to is less confident that Canadian VCs will be able to rise to the occasion when founders soon come knocking. That means, for better or for worse, new startups will likely have to keep bootstrapping or cross the border for capital.

Thanks for reading on and ’til next week, 

Bianca Bharti
Newsletter editor

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BetaKit Talks: You Don’t Know Crypto – Live Event Sept 24!

Discover the latest in Canadian blockchain innovation at our exclusive in-person event. We’re diving into how onchain technologies are transforming the tech landscape and why understanding and applying them is crucial for founders, investors, and corporate leaders.

Hear from industry trailblazers like Dean Skurka, President & CEO of WonderFi, Patrick Dunlop, Co-Founder of Jackal Labs, and Jelena Djuric, Co-Founder of Noble, among others. These experts will share their insights into the future of blockchain. 

From finance to data privacy, decentralized technology is changing the game—and if you want to stay ahead, this is the event for you. Join us on September 24th for an evening of learning and networking.

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TOP STORIES OF THE WEEK

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Paper co-founder Roberto Cipriani steps down from day-to-day role

Paper co-founder, CTO, and COO Roberto Cipriani has stepped down from his day-to-day role at the Montréal-based EdTech company, BetaKit has learned.

Cipriani announced the leadership change in an internal email sent out to employees Thursday, obtained by BetaKit. In the email, which BetaKit confirmed with Paper and Cipriani, the outgoing executive said he would instead focus his efforts as a board member and advisor to the company.

Cipriani’s departure follows a tumultuous summer for the EdTech startup, which replaced co-founder and CEO Phil Cutler with Silicon Valley EdTech veteran Rich Yang before cutting 45 percent of its HQ staff last month. Cutler also remains a member of Paper’s board.

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Fears of repeating Web 2.0’s mistakes permeate AI-focused Competition Summit 2024

The annual event brought together academics, business leaders, and regulators to discuss issues that impact market competition in Canada. The rapid expansion and adoption of AI, as well as the perception that regulators “just don’t get it,” sparked the theme of this year’s conference, Competition Bureau Commissioner Matthew Boswell explained in his opening remarks.

In a tone-setting kickoff for the day, University of Waterloo economics professor Joel Blit provided attendees with an ‘AI 101’ lesson where he predicted that a small number of firms will “dominate” the AI industry within a decade—much like Amazon, Facebook, and Google did in the internet age.

“We need to be reassessing the level of oligopoly we’re comfortable with,” David Lawerence, a policy director for the antitrust division of the US Department of Justice, said.

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Teralys Capital says it “should” hit $570-million fund-of-funds target by end of year

Teralys Capital has secured the largest amount ever raised for a fund-of-funds backed by the federal government’s Venture Capital Catalyst Initiative (VCCI), but the firm has yet to hit its hard cap.

The Montréal-based fund manager officially announced this week that it has raised $475 million CAD for its VCCI-backed fund, which is notably also backed by the Government of Québec through Investissement Québec. The close represents a significant portion of Teralys’s targetted hard cap of $570 million, which it “should” reach by the end of 2024, managing partner Éric Legault told BetaKit in an email statement.

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Federal government’s massive $2 billion CAD loan to Telesat sparks Elon Musk debate between ministers

The federal government’s recent commitment to a homegrown satellite communications company has kicked off a conversation about government spending, national sovereignty, and Elon Musk.

Ottawa-based satellite company Telesat secured a $2.14-billion CAD loan from the Canadian government and a $400 million loan from the Québec government last week. The combined financial boost totalling $2.54 billion CAD sparked a heated debate on X (formerly Twitter) over the weekend.

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Okanagan tech sector generated just under $5 billion of economic impact in 2023

The Okanagan tech sector in British Columbia is delivering an outsized economic punch relative to its population size, according to a new report from tech accelerator Accelerate Okanagan.

Although the Okanagan accounts for less than 10 percent of BC’s population, the report revealed that its tech sector contributed an impressive $4.98 billion to the economy in 2023. By comparison, BC as a whole, with a population of over five million, saw its tech sector generate $16 billion in gross domestic product in 2022.

Accelerate Okanagan’s fourth economic impact study shows the region’s economic impact has grown nearly fivefold from $1.02 billion in 2013.

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Five unmissable highlights of this year’s Elevate Festival

From October 1 to 3, Elevate Festival will take over Toronto for its seventh year, convening some of the biggest founders, tech giants, global investors, and policymakers.

Since launching in 2017, Elevate has grown to become a cornerstone event for Canada’s tech and innovation sector, showcasing Canadian ingenuity and exploring what’s next for the ecosystem. This year’s festival will be held at Meridian Hall and St. Lawrence Centre in Toronto’s downtown core.

BetaKit is once again a proud Elevate media partner, and as the 2024 festival draws near, we’ve rounded up five must-do experiences.

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AWS Activate helps startups reduce costs and increase speed to market.

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Visit AWS Activate to get started.

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Funding, Acquisitions, and Layoffs

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KWL – ApplyBoard lays off four percent after announcing $100M CAD facility
TOR – Motion – $30M USD
TOR – Mosaic – $28M CAD
TOR – Loop – $6.4M CAD
TOR – SecondShop – $2M CAD
TOR – Rebelstork – $24.45M CAD
MTL – Nomic Bio – $42M

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The BetaKit Podcast

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Evolving Canada’s AI strategy with CIFAR’s Elissa Strome

“This is a technology that now is directly impacting society every day and is impacting people’s lives. And if we’re going to help continue its development in a positive way, we actually need to be involved—not just on the technical side, but also on the policy and the societal impact side as well.” 

Elissa Strome, executive director of the Pan-Canadian Artificial Intelligence Strategy at CIFAR, joins for an open-ended discussion on what that strategy has achieved and where it needs to go next in the face of GenAI, compute crunch, and the stalled Bill C-27. Recorded live at ALL IN.

(Listen now on Apple, Spotify, YouTube)

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20% OFF TICKETS TO ELEVATE FESTIVAL

Canada’s premiere tech & innovation event takes place from Oct 1-3, 2024 in Toronto. Elevate Festival unites world-class innovators, and industry leaders to shine a spotlight on Canada’s tech community. 

Don’t miss 300+ speakers across 9 content tracks, opportunities for women in tech and startups, plus enhanced networking and lead generation. Don’t miss out on our food trucks and exclusive after-hours socials! Use code: ELEVATEFESTBETAKIT at checkout.

Feature image courtesy Unsplash.

The post Will Canadian VCs rebound in time to fund early-stage startups? first appeared on BetaKit.

Did you know that over the last decade, the federal government has committed over half a billion dollars to a national AI strategy?

I’m not sure how many BetaKit readers are familiar with the Pan-Canadian Artificial Intelligence Strategy by name, but they’re likely familiar with its outputs: national AI institutes Amii, Mila, and the Vector Institute, as well as AI commercialization work through the Global Innovation SuperClusters.

“This is a technology that now is directly impacting society every day and is impacting people’s lives. And if we’re going to help continue its development in a positive way, we actually need to be involved—not just on the technical side, but also on the policy and the societal impact side as well.” 

Elissa Strome
CIFAR

Recently, at the ALL IN conference in Montréal (co-organized by Mila and innovation cluster Scale AI), I got a chance to speak with Elissa Strome, executive director at the Canadian Institute for Advanced Research (CIFAR) and the mastermind behind the strategy.

Strome was kind enough to walk me through CIFAR’s long history of doing this kind of work (its first research program on AI was in 1983), as well as the evolving motivations behind the strategy’s two phases.

Phase two and what comes next was a hot topic of conversation at ALL IN, with Mila CEO Valérie Pisano and Vector Institute CEO Tony Gaffney speculating on stage about what phase three could look like. For her part, Strome thinks CIFAR has “delivered on our objectives” for phase two, and opened her wishlist notebook for phase three on the pod: continuing “deep investments” into “the core of research and talent,” while targeting gaps and opportunities to ensure Canada’s AI ecosystem is “successful and competitive.” 

“With a billion dollars you could do a lot,” she told me. 

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

But let’s jump back to phase two for a second. At my ALL IN panel (which I hope we can syndicate soon on the channel), the AI startups present took issue with the state of the country’s AI commercialization, along with procurement and investment. Sure, the feds are committing $2.4 billion, but Microsoft, Meta, Amazon, and Alphabet spent $104 billion USD on CapEx in H1 2024 alone, predominantly on AI infrastructure. That’s a massive delta.

Then there’s Bill C-27 and its Artificial Intelligence and Data Act (AIDA), which isn’t technically part of the AI strategy, but was announced alongside phase two in June 2022. Two years later, AIDA is nowhere to be found, and ALL IN speakers from Yoshua Bengio to former attorney general David Lametti put long odds on a reemergence (this was also a topic of conversation a week later at the AI-focused Competition Summit). This is beyond CIFAR’s scope, but with Canada currently being outpaced by the state of California on AI regulation, Canadian researchers, non-profits, and startups are finding themselves stuck in the grey areas.

So while Canada was one of the first countries to lay out a national AI strategy, it finds itself once again behind on regulation, commercialization, and capitalization. Phase three of any strategy will have to account for components phase two failed to deliver on or ignored because they didn’t exist yet, while scoping for what doesn’t exist now in a highly competitive global environment. That’s a big ask.

Again, much of this is far outside CIFAR’s remit, and the gaps between strategy, policy, and execution are both wide and difficult to navigate. But Strome is clearly thinking about all of it, and was willing to speak to me in detail about most of it.

So what’s in Elissa Strome’s notebook and can it solve for the future of AI while that future is still being written?

Let’s dig in.

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The BetaKit Podcast is presented by WonderFi. Don’t miss BetaKit Talks: You Don’t Know Crypto on September 24th!

Discover the latest in Canadian blockchain innovation at our exclusive in-person event. We’re diving into how onchain technologies are transforming the tech landscape and why understanding and applying them is crucial for founders, investors, and corporate leaders.

Join us on September 24th for an evening of learning and networking.

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy ALL IN.

The post Evolving Canada’s AI strategy with CIFAR’s Elissa Strome first appeared on BetaKit.

Koho Financial will begin offering a line of credit to its customers through a partnership with fellow Toronto-based FinTech firm Propel Holdings. 

Koho recently introduced new rent reporting features to help its users build credit history.

The partnership will see Koho introduce and manage the line of credit as one of the core lending products in its app. Meanwhile, Propel will power the technology, underwriting, servicing, and funding of the loans, which will range between $1,000 and $15,000, through its lending platform Fora Credit.

“We’re proud to partner with Propel to further our mutual mission of empowering all Canadians to make financial progress,” Koho chief product officer Jack Chung said in a statement. 

Customers are currently able to join a waitlist on Koho’s website to gain access to the line of credit offering when it goes live this Fall. 

Founded in 2011, Propel uses a proprietary AI-powered online lending platform to help consumers access installment loans and lines of credit. The FinTech firm raised $70 million from its TSX debut in October 2021. While many of the companies that performed an initial public offering in the early 2020s have recently opted to go private, Propel has performed remarkably well having increased its share value by nearly 200 percent since its debut as of press time. 

RELATED: Koho rolls out reporting feature to help Canadian renters build their credit history

The addition of a line of credit to Koho’s suite of offerings follows the FinTech startup revealing that it’s working with Canadian regulators to obtain a Schedule 1 banking licence. Koho founder and CEO Daniel Eberhard told BetaKit in January that he hopes this move will mark the beginning of an opening in Canada’s deeply uncompetitive financial services market. 

Last month, Eberhard told BetaKit that Koho is still very active and on track with the licencing process and that, in the meantime, the company has been focused on balancing growth with reaching profitability. 

Koho has traditionally relied on partnerships with regulated third parties to deliver many of its products. Last month, the app introduced new rent reporting features to help its users build credit history, as well as earn cash back on rent, and get tenant insurance through a partnership with Walnut Insurance.

Koho has more new offerings coming down the pipe this fall, including a buy now, pay later tool that’s currently in beta. 

Feature image courtesy Koho via YouTube.

The post Koho set to launch line of credit offering through partnership with Propel Holdings first appeared on BetaKit.

It’s hard out there for tech sector workers looking for a new role.

There have been a rash of layoffs over the past few years, causing increased competition for available positions. And while the majority of recent job losses took place in late 2022 and 2023, there have been significant layoffs this year as well.

Employers are increasingly seeking out candidates who possess transferable or portable skills.

Food delivery app SkipTheDishes let go of 800 workers in July, while EdTech company Paper laid off its entire Canadian tutor workforce. Digital product startup Sampler also shut its doors, and Toronto-based Cohere shed five percent of its staff this year after announcing a $500-million USD funding round.

A recent report from jobs site Indeed found that job postings also fell below their pre-pandemic level in June, and by July were down four percent from February 2020 levels. This is undoubtedly affecting the confidence of those who are currently unemployed, but there are signs of how job seekers can effectively adapt their approach in the current environment.

Five Canadian tech jobs to apply for this week

• Senior AI Solutions Engineer, Koru, Toronto
• Systems Engineer, Operational Technologies, Vancouver Airport Authority, West Vancouver
• Senior Manager, Operations, Accounting & Data, Vaco, Milton
• AI Data Trainer – Mathematics Specialist, Outlier, Longueuil
• Staff Platform Engineer, Ripple Labs, Mississauga

Understanding the current landscape

The Indeed report found that only 37 percent of those who were out of work and actively looking for a job were at least somewhat confident they could find a job within the next month. That’s down from 43 percent the year before, and well below the confidence level of 51 percent that employed job seekers report.

That’s because early-career workers are already at a disadvantage.

Data shows that entry-level jobs are being eroded. An analysis of around four million job postings since late 2017 has found that 35 percent of postings for “entry-level” positions now ask for years of prior relevant work experience, and over 60 percent of listings for entry-level software and IT services jobs asked for three or more years of experience.

While early career workers probably do have some relevant experience in the form of internships or placements garnered during their college years, along with the requisite educational achievements, they don’t yet have that solid on-the-job experience that companies are looking for. 

Previously, younger employees entered jobs at a level where they benefited from mentoring from senior team members, received on-the-job training, and learned a lot in the process. 

The landscape has changed, making job loss for a Gen Z employee feel a lot different than a redundancy for a Gen X worker who has had the benefit of skills development, as well the benefit of hindsight.

Soft skills = strong results

One solution for those in their early careers who have experienced a job loss, or even, as is common in the tech sector, multiple losses, is to re-evaluate what they are offering. In the absence of a lot of experience across hard technical capabilities, or example, soft skills can go a long way.

Employers are looking for more than core technical, or hard skills, and are increasingly seeking out candidates who possess transferable or portable skills. These are often categorized as soft skills, but are no less important. If you can demonstrate standout skills like communication, organization, attention to detail, leadership, or relationship-building, you’ll set yourself apart from other applicants.

Think of times you led group assignments during your studies, or how you managed a college social event, for example. Demonstrating that you have developed these human skills during college is a great way to signal that you’ll be a truly effective team member in the years to come.

The World Economic Forum (WEF) has given similar advice. In its 2023 Future of Jobs report, the WEF noted that analytical thinking and creative thinking will be among the most in demand skills by 2027, along with leadership, social influence, and curiosity.

AI is today’s top talent currency

And then there’s artificial intelligence, not just the tech world’s latest craze, but also an increasingly important skill for anyone navigating today’s job market. Recent research out of the United Kingdom identified that university graduates who have “AI capital” or business-related AI studies listed on their resumés, are more likely to get a job interview.

One report from Microsoft and LinkedIn predicted that AI skills could soon rival experience in the selection process. This isn’t limited to tech experts—businesses are increasingly seeking non-technical talent who can use generative AI tools like ChatGPT and Copilot.

Having AI expertise can also make you more likely to receive salary offers that are around 13 percent higher than those without it.

If you’ve experienced a layoff and are on the hunt for your next opportunity  it could be the perfect time to take advantage of some career-proofing upskilling.

Ready to find your next tech role in Canada? Visit the Betakit Job Board today.

The post Tips for finding a job in a tough market first appeared on BetaKit.

Toronto-based re-commerce startup Rebelstork has secured a $24.45 million CAD ($18 million USD) Series A round following the online marketplace’s significant growth. 

CEO Emily Hosie claims Rebelstork is growing its revenues at over 300 percent annually. 

First reported by Fortune, the all-equity round was led by Maveron Ventures with participation from existing seed investor Golden Ventures and the venture capital firms of tennis star Serena Williams and rapper Jay-Z, Serena Ventures and Marcy Venture Partners, respectively. As a result of their investments, Maveron general partner Jason Stoffer has gained a seat on the board while Serena Ventures general partner Beth Ferreira is now a board observer.

Rebelstork said it plans to use the capital investment to launch new products, expand operations, and grow its team. Rebelstork declined to provide additional details to BetaKit but said it would be hiring personnel in tech and operations.

Rebelstork was founded by CEO Emily Hosie in 2019 while on maternity leave from her position as vice president of merchandising for TJX, the parent company of multiple off-price apparel and home fashion retailers like Marshalls, Winners, and Homesense. 

In a blog post this week, the founder shared how she became frustrated at the limited options for buying high-quality discounted baby gear and how she put her off-price retailing expertise to work on the baby sector.

RELATED: ReturnBear to launch operations in UK in July

After creating a marketplace platform for parents to buy and sell overstock, open-boxed, and used baby gear at reduced prices, Hosie raised a $2-million CAD seed round in 2020 to fuel the platform’s national expansion. She went on to raise another $5 million CAD, which was also referred to as a Series A round, in 2021 while pregnant with her second child. 

Rebelstork told BetaKit it has raised $38 million USD ($51.5 million CAD) to date. 

The company has struck partnerships to process the overstock and returns of more than 2,500 brands including Hudson’s Bay, Million Dollar Baby, BabyBjörn, 4moms, and Target, Hosie claimed in the blog post. She also claimed the company is growing its revenues at over 300 percent annually. 

“We are seeing an exciting shift in the retail industry where global iconic brands and mass retailers are majorly stepping up to change the bad habits in their returns supply chain,” Hosie said in a statement. “At the same time, we’re seeing a new generation of shoppers embracing returns recommerce in a big way.” 

The ecommerce industry has been grappling with the affordability of returns as the popularity of online shopping grew in recent years. In 2022, the National Retail Federation released a report that anticipated consumers to return more than $816 billion worth of retail merchandise marking an average return rate of 16.5 percent. Up to a quarter, or nearly 5 billion pounds, of returned items end up in landfills, CNBC reported in 2019. 

Feature image courtesy Rebelstork.

The post Rebelstork secures $24.45 million CAD Series A to bolster tech and operations first appeared on BetaKit.

This week, nine British Columbia-based tech startups were awarded a collective $250,000 in prize money from the 24th annual New Ventures BC Competition.

The competition, presented by Innovate BC, gives tech startups based in BC access to in-person events, mentorship, workshops, and a community of peer support over six months, as they vie for the title of BC’s’ top tech startup. In the final round of the competition, 10 finalist companies pitched to a panel of entrepreneurs and investors.

Cleantech and AgTech startups stood out among this year’s winners, with three cleantech and two AgTech companies making the list.

New Ventures BC said it has supported over 4,000 companies in the province to date.

Vancouver-based cleantech startup Timezyx is taking home $110,000 after winning first place at the competition. Timezyx uses digital twin technology to help cities and infrastructure managers adapt to climate events such as floods and earthquakes. 

The startup was founded by CEO Kamyab Zandi and CFO and COO Adele Khavari. Zandi told Techcouver the prize winnings will be used to enhance the startup’s digital twin technology. 

In second place came SkyAcres, a Surrey, BC-based agtech startup that offers an indoor farming software and marketplace for fruit and vegetable growers and commercial buyers. The platform is aimed to allow users with underutilized residential and commercial space to grow and sell produce.

Among SkyAcres’ leadership team is strategy officer Zaffia Laplante, who has been recognized as one of Canada’s Top 30 Under 30 Sustainable Leaders. Earlier this year, SkyAcres was one of three Canadian startups accepted into Google’s Women Founders accelerator program. The startup is taking home $60,000 from the New Venture BC competition.

skiKrumb, a startup based in BC’s Okanagan region, was named the third-place winner at the competition. The company is developing a radio GPS tracker designed for ski resorts that sends real-time location data to connected mobile devices. In addition to winning third-place for top startup, skiKrumb also won the $10,000 Innovate BC Regional Startup Prize at the competition, bringing its total winnings to $45,000.

RELATED: Okanagan tech sector generated just under $5 billion of economic impact in 2023

New Ventures BC also awarded three more startups with $10,000 each as part of this year’s competition. Cleantech startup VulcanX won the Innovate BC Sustainability Prize; agtech startup insporos won the Woman-Led Venture Award; and FinTech startup yPilot took home the  Leap to the Cloud Prize.

CeraCura Nanotherapeutics was named the winner of the competition’s Top Science Based Company In-Kind Prize, and MineSense Technologies was recognized by the Alumni Impact Award. MineSense is another cleantech-adjacent company that provides digital mining data and sensors to improve metal recovery and minimize the environmental impacts of ore mining.

New Ventures BC said it has supported over 4,000 companies in the province to date, which have raised a collective $2.7 billion in financing. In addition to its annual startup competition, New Ventures BC also offers accelerator programming, education resources, and intellectual property support through AccelerateIP.

Feature image courtesy of New Ventures BC via Twitter.

The post BC’s cleantech, AgTech startups dominate 2024 New Ventures BC Competition first appeared on BetaKit.

I am finally ready to call a market bottom.

I know you have heard about the doom and gloom in the venture market. All you have to do is look at the VC X-sphere (RIP Twittersphere) over the last couple of years. Many have tried and failed to predict when the current venture downcycle (except AI) will end. From the pandemic highs to the recent lows, the sentiment has been stubbornly defensive. But I am finally seeing early indicators to call a market bottom. It is time to play offence or get left behind.

Private markets are hard to predict because of the inherent lack of reliable information and near-real-time data. The best VCs read market signals in combination with their own proprietary data, track record, and experience (i.e., gut), deeply understanding that their mission is to invest in visionary entrepreneurs and technologists and to help them build high-growth businesses. 

In the first half of 2024, over 800 new technology and software-related startups were launched in Canada.

For any market to function properly, you need to understand both the supply and demand dynamics. A lot has already been reported on the plummeting venture investment volume and the tough fundraising environment. This data tracks the number of venture investments in a specific quarter and is usually self-reported by venture funds to databases maintained by organizations such as the CVCA, PitchBook, and Crunchbase. I call this the supply-side data. This data is important and helpful in understanding the venture financing environment; however, it is a lagging indicator.

The demand side data—i.e., the number of startups and founders coming to market—is more difficult to gauge. If you are a late-stage VC, you could look at early-stage financings and build a deal pipeline. However, as a former late-stage VC, I know it would still be challenging to foresee predictable demand. Moreover, what if you are an early-stage fund such as Panache Ventures looking to invest up to $50 million in pre-seed stage startups over the next two years? 

Thanks to advancements in AI, Panache Ventures has been actively tracking startup formation data over the last two years. The fund scrapes social media and online datasets to identify new technology startups that are being created in Canada, providing a pulse on the future demand for capital. Most importantly, it focuses on the founders, who drive the demand for VC dollars. To our knowledge, this dataset is unique and Panache Ventures is sharing it publicly for the first time. My hope is that the founder and investor community can band together and steer the market narrative to one of growth and optimism. 

Technology startup formation points to future demand for capital

Panache Ventures’ analysis shows a significant boost in new Canadian startup formation in 2024, setting the stage for stronger investment activity. 

By the numbers:

• In the first half of 2024, over 800 new technology and software-related startups were launched in Canada, a notable expansion from the previous year. Company creation was especially strong in sectors such as AI, climate tech, FinTech and SaaS.
• More than half of the companies were founded in Ontario. 
• Over 30 percent of the companies are operating in stealth mode, indicating that many founders are quietly bootstrapping and building before they raise their first round of capital.

Why it matters:

• The data highlights a shift in Canada’s entrepreneurial landscape. After a relatively slower 2023, the surge in startup creation indicates that founders are gearing up to build.
• Investors who have been cautious in recent years may become more active due to the uptick in deal flow in the coming quarters.
• As startup creation grows, there will be more opportunities for early-stage investments. Robust early-stage financings will also result in greater late-stage investment opportunities in the coming years.

The increasing startup formation activity, declining cost of capital due to lowering interest rates, improving macro and liquidity conditions, accelerating technical advancements, and thriving entrepreneurial ambition give me the confidence to call the market bottom. I don’t expect the venture ecosystem to party like it’s 2021 but the worst is over and the venture market will soon find a new level of equilibrium. Get ready to play offence. 

Prashant Matta is a managing partner of Panache Ventures, a leading pre-seed stage venture capital fund.

Feature image courtesy Pixabay.

The post Canadian startup formation data from Panache Ventures points to future demand for capital first appeared on BetaKit.

Paper co-founder, CTO, and COO Roberto Cipriani has stepped down from his day-to-day role at the Montréal-based EdTech company, BetaKit has learned.

Cipriani announced the leadership change in an internal email sent out to employees today, obtained by BetaKit. In the email, which BetaKit confirmed with Paper and Cipriani, the outgoing executive said he would instead focus his efforts as a board member and advisor to the company.

“I know the past few months have been challenging, but we are making progress on our next chapter.” 

Roberto Cipriani
Paper co-founder

“This has been one of the most rewarding chapters of my life, but I know that the time has come for me to take a step back and allow new leadership to bring fresh perspectives, taking Paper to the next level,” Cipriani said. 

Cipriani’s departure follows a tumultuous summer for the EdTech startup, which replaced co-founder and CEO Phil Cutler with Silicon Valley EdTech veteran Rich Yang before cutting 45 percent of its HQ staff last month. Cutler also remains a member of Paper’s board. 

Paper went on to cut the entirety of its Canadian tutor workforce, leading to unions representing Canadian Paper tutors in Ontario and Québec to threaten legal action. 

RELATED: Union representing Canadian Paper tutors threatens legal action following mass layoffs

“I know the past few months have been challenging, but we are making progress on our next chapter and with Rich’s leadership will continue to do so,” Cipriani said in the email. “I have confidence that Paper is on the right track for better days ahead and wholeheartedly believe in Paper’s future and the people who will shape its next phase.”

Cipriani’s email goes on to say he will continue to “be around” for the next few weeks as he transitions, and that this “not a goodbye” but an opportunity for him to provide guidance and support in a different capacity.

A Paper spokesperson did not respond to questions by press time regarding Cipriani’s motivations for stepping down or whether the company was seeking a new COO or CTO.

Cutler and Cipriani founded Paper in 2014 to provide accessible, 24/7 tutoring and homework support to help students from any background. While advertising its services as one-on-one, Paper has faced criticism for its tutors allegedly working with up to five students at the same time. 

After the COVID-19 pandemic proved a boon to Paper’s mission, the startup secured $343 million CAD ($270 million USD) in Series D capital in 2022. Paper went on to make two acquisitions in March 2023, Readlee and MajorClarity, before laying off staff in August and September 2023. The Globe and Mail has also reported that Paper made layoffs in April 2023. 

Feature image courtesy Paper via YouTube.

The post Paper co-founder Roberto Cipriani steps down from day-to-day role first appeared on BetaKit.

Teralys Capital has secured the largest amount ever raised for a fund-of-funds backed by the federal government’s Venture Capital Catalyst Initiative (VCCI), but the firm has yet to hit its hard cap. 

The Montréal-based fund manager officially announced this week that it has raised $475 million CAD for its VCCI-backed fund, which is notably also backed by the Government of Québec through Investissement Québec. The close represents a significant portion of Teralys’s targetted hard cap of $570 million, which it “should” reach by the end of 2024, managing partner Éric Legault told BetaKit in an email statement.  

The fund will target 25 indirect investments and 15 direct co-investments.

Other partners supporting the fund include CDPQ, Beneva, Fondaction, Bpifrance, Concordia University, Polytechnique Montréal, HEC Montréal, and several other Canadian entrepreneurs and family offices.

Teralys’ VCCI fund will finance venture capital (VC) funds that are investing in information technologies, life sciences, and clean or industrial innovations, the firm said in a statement. 

Legault told BetaKit that 30 percent of the fund has already been committed and will continue to make commitments for the next three-and-a-half years. He added that the fund is targeting approximately 25 fund investments and about 15 direct co-investments.

VCCI is a federal program managed by the Business Development Bank of Canada (BDC) aiming to inject more capital into the ecosystem by leveraging private sector funds. All VCCI funds act as fund-of-funds, largely investing in Canadian VC and growth funds as limited partners with some capital set aside for directly investing in companies. Under VCCI, the federal government provides one dollar to every three dollars raised by the selected fund managers up to a cap. 

Legault said the current fundraising environment was difficult, reflecting the sentiments from a variety of GPs and LPs BetaKit spoke with at Startupfest. The firm still raised significantly more than the three other VCCI-backed funds helmed by Kensington Capital Partners, Northleaf Capital Partners, and HarbourVest Partners. Kensington and Northleaf fully closed their funds in June at $290 million and $370 million, respectively. Teralys told The Globe and Mail in June that it had secured $470 million of its $570-million target.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace to be worst for Canadian VC in a decade

Teralys principal Beatrice Couture told BetaKit in July that the downturn allowed limited partners the time to ensure that they were investing in solid franchises.

“You can really see who is there for the long run, and who might not be there for the long run,” Couture said at the time.

At Startupfest, Couture noted to BetaKit the firm’s intention to close its fund in the coming months. A revised timeline to the end of the year might indicate that fundraising hurdles still remain in the market, but as Couture said in July, “the proof is in the pudding.”

With files from Josh Scott.

Feature image edited by Josh Scott. Source photos courtesy Teralys Capital.

The post Teralys Capital says it “should” hit $570-million fund-of-funds target by end of year first appeared on BetaKit.

Toronto-based advertising technology startup Motion, which sells analytics and research tools for creative strategists, has secured $30 million USD in Series B funding.

Founded in 2021 by a trio of Hubba and Shoelace alumni in CEO Reza Khadjavi, CTO Alexander Sloan, and head of finance David Berglas, Motion aims to become the platform that helps companies turn data into ad ideas. 

As audience targeting on ad platforms has become more algorithm-based, Khadjavi argued that the creative part of advertising has become “the most important part of the equation,” which he said has given rise to the role of a creative strategist. “Motion is building all of the tooling that a creative strategist needs to do their job well,” Khadjavi told BetaKit in an exclusive interview. 

“We’re fortunate to have been at the right place at the right time.”

Reza Khadjavi, Motion

Motion has developed software to help creative strategists research ad trends, analyze ad performance, and turn that data into new ad ideas. Khadjavi sees a big market opportunity in doing just that, and the company’s Series B investors have bought into this vision.

Today, in addition to this financing, Motion also announced that it has brought on YouTube and advertising industry influencer Dara Denney as chief evangelist to advise on product direction, create educational content, and help train creative strategists. The company also released a new product called Creative Research that extends its capabilities on the research side of ad production.

Motion’s all-equity Series B round, which closed earlier this month, was led by Montréal-based Inovia Capital with support from fellow new backer Threshold Ventures and other existing Silicon Valley investors: Headline, Abstract Ventures, and Sugar Capital. Khadjavi said the round was majority primary with some secondary, but declined to disclose further details.

This Series B round brings Motion’s total funding to date to $42 million (all figures USD), an amount that includes a $6-million seed round from September 2022 as well as a previously unannounced $6-million Series A insider round from December 2023, both of which were led by Headline. Khadjavi claimed Motion’s Series B came at a “much higher” valuation than its Series A financing, but declined to share exactly how the round valued the adtech startup.

Khadjavi, Sloan, and Berglas previously worked together at Hubba, an online marketplace for independent retailers, and founded fellow Toronto startup Shoelace, which began as a Shopify app before becoming a marketing agency. “We’ve been building for this ecosystem of the direct-to-consumer advertiser for almost 10 years now … We understand this audience extremely well,” Khadjavi said.

Khadjavi explained that e-commerce companies typically have razor-thin margins. “There’s basically no room for error. If the ads don’t work well, they’re just going to lose money,” he said, adding that given this, e-commerce marketers “tend to be the best-of-the-best advertisers.

RELATED: Sharethrough to merge with French adtech firm Equativ

After seeing this group “hacking together a lot of homegrown solutions” to measure the performance of creative advertising, the trio launched Motion to help e-commerce marketers better understand what ads are working and what are not. During the company’s early days, Khadjavi thought Motion may top out as a reporting tool for advertisers. Now, he is confident that the software-as-a-service (SaaS) startup’s potential is much greater.

“Motion’s market opportunity is vast, with over $85 billion spent annually on social network ads in the US alone across platforms like Meta, Google, TikTok, and Amazon,” Inovia partner Karam Nijjar told BetaKit. “As paid ad spending continues to rise, the demand for more content creation and effective creative strategy will only increase. Motion is positioned at the heart of this shift, playing a critical role in fuelling ad spend through data-driven creative insights.”

Today, Motion’s core customers are direct-to-consumer (D2C) e-commerce brands and agencies, which account for roughly 70 percent of its clients today. This group includes brands like HexClad, Vuori, True Classic, Jones Road Beauty, and Ridge. Motion claims its customers use its tools to analyze more than $6 billion in media spend annually.

Over the last year, Motion has doubled its headcount from 25 to 50 employees and expanded to serve more than 1,000 customers. Khadjavi claimed that Motion has grown its annual recurring revenue 3x year-over-year, but declined to share the exact figures. Nijjar noted that Motion now supports over 2,000 marketing teams across its customer base, and has experienced strong growth “underpinned by best-in-class performance, adoption, and capital efficiency metrics.”

Khadjavi attributes part of Motion’s growth to its timing. “Five years ago, this was not really a pain point … We’re fortunate to have been at the right place at the right time,” he added.

Amid all the talk about artificial intelligence (AI), Khadjavi said that it has already impacted key functions in the digital advertising world. He noted that in the past, humans spent a lot of time figuring out who to target and how, whereas now, algorithms determine audience targeting. Meanwhile, AI has also made creating ad content much easier.

RELATED: Inovia raises initial $300 million USD for third growth equity fund led by CDPQ

In this context, Khadjavi argued that the question of what ads to create—the focus of the creative strategist—has become key, and claimed that the creative strategist has gone from a “relatively fringe” position to “basically the fastest-growing job in performance marketing.”

“Most media buyers don’t spend a lot of time thinking about audience targeting anymore, and they spend now all of their time thinking about creative,” Khadjavi added. 

“Motion recognized the opportunity for an emerging creative strategy function in marketing organizations and is pioneering a new category of software to support it.”

Karam Nijjar,
Inovia Capital

Nijjar is joining Khadjavi and Sloan on Motion’s board alongside Taylor Brandt of Headline and former Shopify vice president Brandon Chu as an independent director. The Inovia partner said the firm was attracted to Motion’s strong founder-market fit, vision, and product.

“Motion recognized the opportunity for an emerging creative strategy function in marketing organizations and is pioneering a new category of software to support it,” Nijjar said. “Through our collaborations with the founding team, we have been thoroughly impressed by their articulate vision for Motion to become the command centre for creative strategy.”

With its Series B funding, Motion plans to accelerate its product roadmap and ramp up its go-to-market efforts. Product-wise, Motion plans to focus on its core Creative Analytics product and its new Creative Research offering.

On the go-to-market front, Khadjavi said the startup intends to keep investing in training and education, including through educational content and in-person events such as its Creative Strategist Summit, where it announced the fundraise.

Khadjavi said Motion has also recently been getting a lot of signals from other industries beyond its core D2C e-commerce clients, including business-to-business SaaS companies and consumer apps—groups it is targeting for expansion.

Feature image courtesy Motion.

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The spectre of Bill C-27 hung over the Competition Bureau’s AI-focused summit, where international watchdogs warned against repeating Web 2.0 era mistakes.

“We probably need to be making more efforts than we’re making to sync-up the approach around the world.”

Matthew Boswell
Commissioner, 
Competition Bureau Canada

The annual event brought together academics, business leaders, and regulators to discuss issues that impact market competition in Canada. The rapid expansion and adoption of AI, as well as the perception that regulators “just don’t get it,” sparked the theme of this year’s conference, Competition Bureau Commissioner Matthew Boswell explained in his opening remarks. 

In a tone-setting kickoff for the day, University of Waterloo economics professor Joel Blit provided attendees with an ‘AI 101’ lesson where he predicted that a small number of firms will  “dominate” the AI industry within a decade—much like Amazon, Facebook, and Google did in the internet age. 

In a pre-recorded keynote address, United States (US) Federal Trade Commission (FTC) Chairperson Lina Khan echoed that concern and warned against allowing only a handful of powerful companies to dominate the market, much like what happened during the early Web 2.0 era. One of the internet giants to emerge from that era, Google, has been facing a slew of anti-trust complaints in recent months, including from the FTC. 

In a later panel discussion between international regulators, David Lawerence, a policy director for the antitrust division of the US Department of Justice, said that regulators look back at the “hands-off” philosophy during those dawning days of digital markets with a “twinge of regret.” 

Lawrence added that a dominant firm hasn’t yet emerged in the nascent AI era to create an exclusionary ecosystem that threatens the opportunity for other entrepreneurs and innovators, so anyone from any background can build an AI company. 

“We’re in that moment, and we want it to remain that way,” Lawrence added. “We need to be reassessing the level of oligopoly we’re comfortable with.”

The moment may not last forever, given the $150 billion in capital expenditures big tech has invested in AI over a one year period, Forbes reported last month. Other international regulators present for the discussion raised similar concerns about potentially anti-competitive practices novel to the AI era. 

Carlota Reyners Fontana, the European Commission’s antitrust director, and Ori Schwartz, competition head for the Organisation for Economic Co-operation and Development (OECD), both suggested re-exploring the definition of a merger with the advent of investment agreements that forge strong connections between big tech firms and AI companies. The regulators specifically mentioned the partnerships between Microsoft and OpenAI, as well as Google and Samsung, as examples. 

Reyners Fontana also suggested that there could be scrutiny of “acqui-hires.”

“We are concerned that maybe they are designed [to escape merger control], and therefore we look at what core assets might have been transferred,” Fontana said. “[We also look at] whether that transaction would lead to the loss of market presence of the target company.”

Go fast vs. get it right

While the international regulators spoke explicitly about their concerns with the emerging AI market, member agencies of the Canadian Digital Regulators Forum (CDRF) took a wait-and-see approach at a roundtable discussion centered on learning the mechanics of the new digital market. 

The CDRF is a cooperation initiative between Boswell’s Competition Bureau and leaders from the Canadian Radio-television and Telecommunications Commission (CRTC), the Privacy Commissioner of Canada, and the recently added Copyright Board of Canada. 

Boswell kicked off the discussion noting that the CDRF was created because it’s “a very difficult task” to stay up to speed with the rapid pace of change, and that the proliferation of AI made the work of the member agencies overlap more than ever.

CRTC chairperson Vicky Eatrides said that the overlapping issues and AI’s spike in use provided an opportunity for the leaders to learn from each other. 

“You have to work towards where the puck is going and not to where the puck has been,” Eatrides said. 

Copyright Board vice-chair and CEO Drew Olsen said he thinks stakeholders and regulators are just now starting to grapple with AI, adding that the copyright board is still trying to understand the changes in market dynamics occurring in the creative sector. Olsen added that he was looking forward to discussions on synthetic media, such as deep fakes, questioning whether regulators have a role to play in “helping people trust what they see on the internet.”

RELATED: AI regulation is coming. What’s Canada’s approach?

The fate of Bill C-27 and its Artificial Intelligence and Data Act (AIDA) provision hung over much of the day’s conversations. The act was described as both “stalled” or “snarled” throughout the day. However, Privacy Commissioner Phillipe Dufresne defended the process, stating that Parliament is “doing its work” by listening to the discussion and debate around the bill. He also noted that there is a balance between legislators moving quickly and a desire to get legislation that will “stand the test of time.” 

“There’s lots of proposed amendments, there’s lots of issues, and I hope to see this move forward and I hope to see Parliament give it the priority that it deserves,” Dufresne said. “Time is a precious commodity, it’s always a challenge, especially towards the end of a minority Parliament.” 

Dufresne added that organizations that design AI must justify their processes. He went on to explain that AI doesn’t exist in a legal vacuum and that AI developers have current obligations to uphold under existing regulations. 

“If [AIDA doesn’t pass] for whatever reason, we are acting, we have ongoing investigations, we have issued statements on AI,” Defresne added. “We’re going to continue to use the tools that we currently have.”

While Boswell didn’t have any prescription for the legislation, he wrapped up the panel by saying the call for regulation from ‘AI godfather’ Geoffrey Hinton, and his warning that the “unchecked expansion of AI is an existential threat to humankind,” caught his attention. Earlier this month, Hinton joined a group of AI scientists to sign yet another letter calling for controls against the malicious use of AI that could “lead to catastrophic outcomes for all of humanity.” 

“There are some serious issues and, in my personal opinion, we need to be moving forward on regulation in this country and around the world,” Boswell said. 

“We probably need to be making more efforts than we’re making to sync-up the approach around the world, because a lot of the AI is being driven by large tech companies that have more money than many countries, and we need to have some sort of broad approach to it.”

Feature image courtesy Competition Bureau Canada via LinkedIn.

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From October 1 to 3, Elevate Festival will take over Toronto for its seventh year, convening some of the biggest founders, tech giants, global investors, and policymakers.

Since launching in 2017, Elevate has grown to become a cornerstone event for Canada’s tech and innovation sector, showcasing Canadian ingenuity and exploring what’s next for the ecosystem. This year’s festival will be held at Meridian Hall and St. Lawrence Centre in Toronto’s downtown core.

BetaKit is once again a proud Elevate media partner, and as the 2024 festival draws near, we’ve rounded up five must-do experiences.

Hear from tech’s sharpest tongues and highest fliers

Elevate Festival offers a unique opportunity to hear from some of the most influential voices shaping the future of tech and business. This year’s lineup features a range of speakers who bring diverse perspectives and ideas. 

Tech journalist and author Kara Swisher, known for her shrewd and incisive insights into Silicon Valley, will share her perspectives on technology’s current and future state. Adding to the lineup is Chris Hadfield, the astronaut whose experiences in space offer a unique and captivating perspective on business and innovation here on Earth.

Shopify president Harley Finkelstein will dive into the world of e-commerce, Canada’s place in the global D2C race, and the future of retail, while financial independence advocate Tori Dunlap and Lightspeed founder and CEO Dax Dasilva will also take center stage, offering valuable insights into personal finance and the future of retail technology. 

And the lineup doesn’t stop there—experience fascinating talks from Food52 CEO Erika Ayers Badan, former president of Barstool Sports, WNBA Toronto President Teresa Resch, former Salesforce Chief Scientist and You.com founder Richard Socher, and Tegan and Sara, who will discuss their new documentary Fanatical: The Catfishing of Tegan and Sara”, a documentary about how Tegan was hacked and impersonated online.

Choose your content track adventure

One of the Elevate Festival’s standout features is its range of content tracks, designed to cater to a diverse range of interests. Whether you’re passionate about AI, eager to solve problems with deep tech, or keen to understand the nuances of FinTech and cybersecurity, there’s an itinerary for you. Check out Elevate’s agenda to discover the sessions and workshops that align with your interests.

For startups, the masterclasses are particularly noteworthy. These sessions will dive into the challenges and opportunities new ventures face, giving entrepreneurs practical tools to manage growth and sharpen their business strategies. It’s a chance to hear from industry experts and walk away with advice you can put into action.

Get connected 

This year, Elevate Festival is taking networking to a whole new level. 

The festival has created dedicated spaces to connect with a global network of industry leaders, investors, and innovative startups. The Women+ in Tech Lounge is one such space that celebrates and amplifies the voices of women and non-binary individuals in technology and business. Meanwhile, the Startup Lounge and Trailblazer Lounge will be hot spots for cutting-edge founders and thought leaders.

Connecting with new people at events can feel daunting, at times. That’s why Elevate has teamed up with Braindate to facilitate knowledge-sharing conversations, one-on-one meetings,  and meaningful connections. Featuring networking lounges and curated experiences, this intimate gathering of the tech and innovation community offers the perfect opportunity to elevate your network. 

Showcase your startup

If you’re a founder or startup leader looking to stand out, Elevate Festival offers many opportunities to get your startup noticed.

Skip the cold emails and pitch your ideas to seasoned investors and decision-makers through founder roundtables. These sessions offer a platform to present your vision, receive constructive feedback, and explore potential mentorship or funding opportunities.

It’s a prime chance to gain visibility and generate leads in front of an engaged and interested audience.

Keep the the party going

What’s a festival without festivities? Elevate Festival is well known for blending business with pleasure. After a day of learning and networking, unwind and continue making connections in a more relaxed setting at the festival’s Happy Hour, where your first drink is on the house.

For more late-night experiences, consider hosting an Elevate after-hours event or join one of the Elevate Goes Late after-parties, including an exclusive party hosted by OneEleven at the iconic Lower Bay abandoned subway station (open to Trailblazer and Investor pass holders).

Use the BetaKit promo code ELEVATEFESTBETAKIT to get 20% off on your tickets here. We’ll see you there!

All images provided by Elevate.

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Montréal-based Nomic Bio has secured a $42 million Series B round to bolster the expansion of its protein profiling platform.  

The round was led by an undisclosed United States (US)-based life-sciences-focused investor with participation from Amplitude Ventures, Avant Bio, Lux Capital, Real Ventures, and SR One. 

Nomic said the capital will be used to accelerate the expansion of its commercial operations, invest in its platform, and broaden its offerings to meet growing demand. BetaKit has reached out to Nomic for more details but did not hear back by press time. 

Founded as Nplex Biosciences in 2017 by bioengineers at McGill University, Nomic aims to change how drugs are developed and diseases are diagnosed with its nELISA protein measuring platform. Proteins are large, complex molecules that play a variety of critical roles in the human body. They can indicate when the disease occurs, how it progresses, as well as whether treatments are effective.

In a release, Nomic said its technology currently serves more than 75 companies including biotechs and research institutes adding that it has profiled more than 25 million proteins.  

RELATED: Amplitude Ventures, Gates Foundation lead Radiant Biotherapeutics’ $35-million USD Series A

“We’re excited to see our technology embraced by some of the most innovative R&D teams and to witness the nELISA platform advance critical drug discovery efforts,” Nomic CEO and co-founder Milad Dagher said in a statement. “As we set out to greatly increase our biological footprint alongside unlocking several new applications, we are energized to partner with a distinguished group of investors who share our bold vision.”

Nomic, an alumnus of both Creative Destruction Lab and Y Combinator, said it has now raised more than $60 million to date. The company last raised a $17-million USD Series A round in late 2021, when it also officially changed its name from Nplex to Nomic Bio. 

The Series A was intended to be used to hire more staff, develop automation abilities, and expand its service and manufacturing capabilities in Montréal and Boston, Dagher told BetaKit at the time. In a statement following the Series B raise, Nomic said it has seen “surging demand” and has since built “industrial-scale facilities” to offer its protein profiling service. 

Feature image courtesy Nomic Bio. 

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Mosaic Manufacturing Ltd. announced Wednesday it received $28 million CAD in growth financing to help it produce more of its 3D printers that are built in Canada. 

Montréal’s Idealist Capital led the all-equity round, which closed in June, with follow-on investment from previous investor Freycinet Ventures based in Toronto. As part of the funding, Idealist’s François Boudreault will join the board alongside Mosaic co-founders Mitch Debora, Derek Vogt, Chris Labelle, and Freycinet’s James Appleyard. The round also included undisclosed investors that were private family offices, Debora said. 

“We were seeing strong traction with manufacturers adopting our technology to onshore their supply chains.”

Mosaic CEO Mitch Debora

Since its founding in 2014, Mosaic has secured $10 million USD of dilutive funding over several rounds from investors including Techstars, Real Ventures, and SOAN. That capital also includes financial support from  DDQIC, NGen, IRAP, MaRS, OCE, Venture Lab, CTA, and Canada Makes.

“We raised this round of funding because we were seeing strong traction with manufacturers adopting our technology to onshore their supply chains, and we saw all the right signals to suggest that it was time to scale, but capital became the biggest constraint,” Debora, Mosaic’s CEO, told BetaKit in an interview. 

“Having had the money for a few months, we’re already in the scaling phase and working to bring our technology to more factories,” he said. 

The Toronto-based startup sells automated 3D printers, plus accompanying software and materials, that manufacturers use in their factories to produce custom plastic parts on demand. Mosaic has a selection of printers ranging from $10,000 USD to $100,000 USD.

The company’s most recent innovation, named Array, launched in the beginning of 2023 and resembles a vending machine with four printing compartments. Inside the Array is a storage area that catches all the 3D printed parts. If a factory operations manager tells the system to create 30,000 parts, the machine can continuously produce the pieces and store them inside the Array over a 72-hour period, Debora gave as an example. 

“It can go through the weekend before any type of manual intervention is required,” he said, adding that its customers will have “10, 20, however many [machines] they need” that fits their capacity requirements.

Debora said the company has benefited from Western countries’ recent push to shorten supply chains, known as nearshoring or onshoring. The pandemic, which disrupted manufacturing and led to shortages and jammed ports, along with growing geopolitical tensions with China bolstered the need for Mosaic’s technology, he added. 

Mosaic currently has clients in Canada, the United States, Mexico, Germany and Hong Kong. Its customers are mostly contract manufacturers that make products for other companies, particularly in the medical device and machinery equipment and automation verticals. The new funding will help it acquire customers in other verticals and focus on growth in North America and Europe. In the next few quarters, the company plans to make an announcement around its technology producing consumer textiles, Debora said. 

The funding will also be used to double Mosaic’s 60 person team, which is located in the Greater Toronto Area, over the next 12 to 18 months. Debora said he plans to build out the senior leadership ranks and grow the commercial division. As well, the $28 million CAD will go towards building out the Canadian-based infrastructure that makes the 3D printers. 

“We’re really capitalizing on being first to market here, working with some of the biggest companies in the world,” Debora said, though he wouldn’t divulge who his customers are. “We’ve built this robot operated, mass 3D printing powered system that’s really in a category of its own.”

Feature image courtesy Mosaic Manufacturing Ltd.

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The Okanagan tech sector in British Columbia is delivering an outsized economic punch relative to its population size, according to a new report from tech accelerator Accelerate Okanagan.

Although the Okanagan accounts for less than 10 percent of BC’s population, the report revealed that its tech sector contributed an impressive $4.98 billion to the economy in 2023. By comparison, BC as a whole, with a population of over five million, saw its tech sector generate $16 billion in gross domestic product in 2022.

Accelerate Okanagan’s fourth economic impact study shows the region’s economic impact has grown nearly fivefold from $1.02 billion in 2013. That figure is determined using Statistics Canada’s input-output models.

The Okanagan is home to 787 tech companies employing 32,645 people.

The Okanagan region, which surrounds its namesake lake in south-central British Columbia, encompasses cities like Kelowna, Vernon, Penticton, and Salmon Arm. While its population may be small compared to major urban centres like Vancouver, it is home to 787 tech companies employing 32,645 people. 

Among the Okanagan’s four census regions, the Central Okanagan—home to its largest city, Kelowna—was the driving force behind much of the area’s economic growth. The region generated $3.01 billion in 2023, employing over 19,747 people, according to Accelerate Okanagan’s report.

The report revealed that 61 percent of local tech companies in the Okanagan are under nine years old, and 58 percent have already reached profitability.

Top sub-sectors in Okanagan tech include advanced manufacturing, with companies like RainStick Shower and 4AG Robotics, cleantech with firms like Lomi and GreenStep, and SaaS businesses such as Minga and Trellis.

The report noted that quality of life, climate, and commute times were listed by respondents as some of the key benefits of building a tech company in the Okanagan. The greatest challenges for local founders, however, include access to capital and attracting new customers, according to the report.

RELATED: Saskatchewan tech sector employment doubled over four-year period: report

“The struggle to easily access growth capital and tech talent is a universal issue, but it’s magnified in the Okanagan by the region’s distance to major urban centers,” the report reads.

Sourcing technical talent also appears to be a challenge cited by those surveyed in the report, which is being exacerbated by a higher cost of living sweeping BC and other Canadian provinces. 

However, the study found that the region’s reputation as a destination for young talent is taking hold, with 46 percent of employees being under the age of 35. The report noted that startups, for example, are benefitting from local graduates from institutions like Okanagan College and the University of British Columbia Okanagan Campus.

The report also found that the overall sentiment within the region’s tech ecosystem is largely positive, with 65 percent of tech companies preparing to grow their workforce in the coming year. 

Feature image courtesy Unsplash. Photo by Kolby Milton.

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The federal government’s recent commitment to a homegrown satellite communications company has kicked off a conversation about government spending, national sovereignty, and Elon Musk.

Ottawa-based satellite company Telesat secured a $2.14-billion CAD loan from the Canadian government and a $400 million loan from the Québec government last week. The combined financial boost totalling $2.54 billion CAD sparked a heated debate on X (formerly Twitter) over the weekend.  

The funding, for what is believed to be Canada’s largest space program, is meant to boost Telesat’s completion of Lightspeed, a low-Earth-orbit (LEO) satellite network that promises to expand affordable and high-speed, internet, and 5G networks in remote and rural communities in Canada. Telesat has reportedly contracted aerospace technology firm MDA to build its satellites in Sainte-Anne-de-Bellevue, Québec. 

“We won’t outsource our national security & we’ll have the network to protect Canada and the Arctic.”

Minister François-Philippe Champagne

In a press release, the government said the project will support “2,000 jobs across the country through Telesat and its supply chain.” It is also expected to create 967 jobs in Québec. 

Telesat has pledged to invest over $4.4 billion in the Canadian economy over the next 15 years, create 200 post-secondary co-op jobs, and provide $1.6 million in scholarships to students in Canada with what the government says will focus on “women and Indigenous youth in science, technology, engineering, and math programs.” 

Last week’s announcement sparked discussion online with some, including Conservative MP Michael Barrett, criticizing the move, suggesting that funding to bring internet to Canada’s rural areas could have been given to Elon Musk’s Starlink instead. In a post, the Conservative MP asked Musk to join the discussion.

Others, including former head of fiscal policy for the minister of finance, Tyler Meredith, said they do not want to see Musk run the initiative adding the project is also “about building dedicated capacity to run the satellite networks of the Canadian Armed Forces.” 

Musk’s potential involvement in military-linked Canadian telecommunications infrastructure comes at the same time people in the United States (US) are calling for a Secret Service investigation into his security clearance following a controversial X post. In it, the tech founder questioned why former US President Trump has had two assassination attempts while US President Joe Biden and Vice President Kamala Harris have not had any. 

One day prior, Musk chimed in on X to claim that it would take Starlink “less than half that amount” to bring high-speed internet to Canadian households. MP Barrett later called Elon’s response a “common sense solution for Canada.” 

Canada’s Minister of Innovation, Science and Industry François-Philippe Champagne, pushed back to denounce Barrett’s X posts as “nonsense.” He insisted the Telesat loans would “help build a world-class Canadian-made satellite network that supports thousands of jobs.” 

“They’d prefer giving money to foreign billionaires instead of supporting our industry and our workers,” the minister said in a pinned X post.

“We won’t outsource our national security & we’ll have the network to protect Canada and the Arctic,” the minister clarified in a separate post.

The Telesat Lightspeed program is already underway and the first of an initial 198 LEO satellites are scheduled to launch in 2026. Notably, Telesat has contracted launch agreements with Musk’s SpaceX for Lightspeed.

The initiative is part of the government’s target to ensure 98 percent of Canadians have access to high-speed internet by 2026 and 100 percent of Canadians get internet by 2030, the feds said in the release. 

Feature image courtesy Justin Trudeau via LinkedIn.

The post Federal government’s massive $2 billion CAD loan to Telesat sparks Elon Musk debate between ministers first appeared on BetaKit.

Two years after pivoting from peer-to-peer lending to international financial management, Toronto-based FinTech platform Loop has announced a $6.4-million CAD seed extension.

The all-equity, all-primary extension, which a Loop spokesperson told BetaKit closed in May, was co-led by returning investors Mistral Ventures and Graphite Ventures, and new investors Luge Capital, Wedbush Ventures, and Conconi Growth Partners. Unnamed investors also participated in the round.

Since pivoting, Loop says its revenue jumped 130 percent in year one and nearly quadrupled in year two.

The seed extension comes approximately two years after Loop’s $4-million CAD seed financing round, bringing the startup’s total funding to $10.4 million CAD.

For the past two years, Loop has offered a platform to help small and medium-sized businesses manage their international financial operations.

Originally launched in 2014 as Lending Loop, the startup offered a peer-to-peer lending platform for Canadian small businesses.

Lending Loop began to face challenges during the COVID-19 pandemic. In addition to the immediate and unexpected halting many small business’ growth financing plans, the pandemic also led to the creation of several federal loan programs for businesses that rendered Lending Loop’s offering obsolete.

These changes prompted the startup to pivot to helping SMBs manage international financial operations and removing the cost and friction for merchants conducting business in multiple currencies.

RELATED: How Lending Loop pivoted from peer-to-peer lending to a cross-border banking platform for e-commerce

Loop’s revamped product suite includes a corporate banking card, international payments solution, global business bank account setup for the United States, the United Kingdom, and the European Union, an expense management tool, and a billing service. While Loop no longer provides peer-to-peer lending, it does offer lending and credit products that are embedded into its product suite.

Positioning itself as an alternative for small businesses to manage money globally, Loop addresses a gap that CEO and co-founder Cato Pastoll says traditional banks have largely overlooked.

“Modern companies are built to operate globally, yet the process of setting up banking services to conduct business in a foreign market in order to send, receive, and manage money is an expensive and challenging barrier to overcome for businesses,” Pastoll said in a statement.

David Nault, general partner at Luge Capital, believes these businesses often struggle to find a banking partner that can serve their needs in multiple geographies and currencies.

RELATED: Can Canadian FinTech woo the customers that banks have left behind?

“Loop’s platform perfectly serves the needs of those businesses and is well positioned to capture this growing opportunity,” Nault said in a statement.

According to a Loop spokesperson, the startup’s revenue jumped 130 percent in the first year of its pivot and nearly quadrupled in year two. The company says it has processed over $1 billion in payments to date, and expanded its customer base by 125 percent in a 12-month period.

Currently, over 3,000 businesses use Loop, including Montréal-based sporting goods company Ciele Athletics, Toronto-based Tab Commerce, and Kitchener-Waterloo-based retail startup Junip.

The startup will use its new funding toward product expansion, specifically delivering additional services to its customers as they are managing their money globally through Loop’s platform. The spokesperson said Loop plans to launch a new program to customers in the fourth quarter of this year.

Feature image courtesy Loop.

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Kitchener-Waterloo startup ApplyBoard has secured a $100-million CAD credit facility to “triple down on growth,” CEO Meti Basiri told BetaKit in an exclusive interview. To do that, the educational technology company will place less emphasis on English-speaking countries.

RBCx, the tech banking and innovation arm of Canada’s largest bank, issued the credit facility to the EdTech startup in the second quarter of 2024, but the company held off the announcement until Sept. 17, Basiri said. Terms of the loan were not disclosed. 

“English-speaking countries will continue their fair share [of international recruitment], but the pie itself is getting bigger.”

—ApplyBoard CEO Meti Basiri

“We’re thinking about student mobility and how it’s going to change over the next decade. So how can we set ourselves up for more expansion?” Basiri said of the financing. 

Two days after the company announced the financing, media reports indicated the company laid off four percent of its global workforce, which are located in Ontario. On Wednesday, the federal government announced it would implement further reductions and restrictions on international students and post-graduation work permits.

ApplyBoard, which reached Unicorn status during the pandemic, was founded in 2015 by Basiri and his brothers Martin and Massi. Inspired by their experience emigrating from Iran to study in Canada, the trio launched an artificial intelligence-enabled software platform that helps international students apply to more than 1,500 post-secondary institutions across Canada, the United States, United Kingdom, Ireland, and Australia. 

Tony Barkett, head of banking and capital at RBCx, said when he partners with tech companies, he looks for disruptive technologies that are “defensible,” a growth story and revenue trajectory, and a strong management team. If the company is backed by venture capital he looks at the investor group.

“If I take that idea and put it on the lens of ApplyBoard, they’re positioned very well,” Barkett said in an interview. “They’re at a size and scale in Canada that is only matched by a handful of other companies. There’s not a lot of Unicorns in Canada.”

Since its $375 million CAD Series D round in 2021, ApplyBoard has expanded its product offerings to cater to the needs of international students. In May, it partnered with TD Bank to allow users to open guaranteed investment certificates through its platform and accrue interest before landing in Canada (ApplyBoard also has a deal with RBC to offer GICs). A month later, it launched a GPT-based AI chatbot agent called Abbie that provides support and guidance about any step of the post-secondary application process in any language.

Basiri said the company will use the $100 million CAD to expand beyond English-speaking countries to 20 new destinations, with a particular eye on bringing European and Asian schools to the platform by 2030. Currently, ApplyBoard has beta launched in Germany with plans to bring it fully online by early next year. Within two years, the company plans to add another 10 countries to the platform. 

The debt facility could also be used for future mergers and acquisitions, Basiri mentioned briefly, but he said the focus is on research and development and growth. 

ApplyBoard is targeting non-English-speaking markets because those countries are realizing the advantages international students bring to their economy, the CEO said. What’s more, countries in Europe are facing population declines and one possible solution to solving the crisis is by bringing in international students, he said.  

“You bring someone into your country, they get a degree from your school and you embed them into your workforce. They become far more successful than immigrants with foreign credentials,” Basiri said, adding that countries like Japan, Korea, Italy, and France are increasingly warming up to bringing in more international students. 

“English-speaking countries will continue their fair share [of international recruitment], but the pie itself is getting bigger, so new players will have bigger portions of [it],” he said. 

The focus abroad comes as the need for ApplyBoard’s services lessens at home. At the beginning of the year, the Canadian government announced a cap on student visas, citing increased pressure on housing, healthcare and other services. Basiri said the move negatively impacted ApplyBoard’s Canadian business, but the company is focused on its international expansion. 

According to an ApplyBoard report, the number of new study permit applications processed by the federal government dropped 54 percent in Q2 this year compared to the same period in 2023. The report projects that the number of applications will drop 47 percent from 436,600 approved last year to just over 231,000 in 2024.

RELATED: ApplyBoard raises $375 million CAD Series D at $4 billion valuation

“What we would have maybe achieved in 10 years, now we’re going to achieve it in six years. So there is always upside and opportunities in any of these challenges,” he said. 

Currently, ApplyBoard generates revenue from the schools on its platform and test providers, such as ones that offer language proficiency certifications. Long-term, Basiri said he wants the company to evolve into a platform that helps international students beyond their post-secondary applications, such as helping them decide where they will bank or find accommodations. He also mentioned the possibility of one day helping students get their mortgages through the ApplyBoard platform. 

Whether ApplyBoard gets there by raising another equity funding round or going public, Basiri didn’t say. For now, he’s satisfied with where the company is at and its trajectory. 

“We have a huge run rate and we don’t have challenges,” he said. “We’re focusing on the next phase of our work.” 

Feature image courtesy ApplyBoard.

The post Exclusive: ApplyBoard secures $100-million CAD credit facility to fuel global expansion first appeared on BetaKit.

Google has revealed the 14 startups joining the 2024 cohort of its Canadian accelerator program, and artificial intelligence (AI) is front and centre in this year’s lineup of participants.

Now in its fifth year, the Canadian iteration of the Google for Startups Accelerator offers startups a mix of remote and in-person learning over 10 weeks. Founders will also get the chance to connect with mentors and experts who provide guidance on technical and business topics like product design, customer acquisition, and leadership development for founders.

This year’s cohort represents four Canadian provinces, with half hailing from Ontario.

This year’s cohort of startups represents four Canadian provinces: Ontario, Québec, British Columbia, and Alberta, with half of the companies hailing from Ontario.

In addition to AI, the cohort spans sectors like digital health, legaltech, developer tools, and FinTech.

Ten of the 14 startups claim to be using AI or machine learning as part of their core offering.Toronto-based Aya Care, which develops payment solutions and program administration for employee benefits packages, is one of the startups joining this year’s cohort. Founded in 2018, Aya launched out of stealth in 2020 with $3.7 million CAD in seed funding.  

Joining from Montréal, Deeplite offers a software engine designed to optimize AI models by refining their design constraints. This allows users to enhance deep neural networks, making them faster, lighter, and more energy-efficient. Deeplite raised $7.5 million in seed funding in 2021.

RELATED: Three Canadian startups earn spots in Google’s latest Women Founders accelerator cohort

Also joining the cohort is PulseMedica, based in Edmonton. The startup is developing a non-invasive platform to diagnose and treat vitreoretinal diseases, including eye floaters, age-related macular degeneration, and diabetic retinopathy. PulseMedica gained traction in 2021 after securing investment from Startup TNT’s Investment Summit IV and closed $12 million CAD in funding in May 2024.

Vancouver-based Defang is another participant, offering a platform that enables programmers to develop, deploy, and debug cloud applications. Defang claims its platform can help developers deploy cloud applications in under five minutes.

The other 10 startups joining the 2024 cohort include:

• BioTwin (Québec City, QB)
• Envision.ai (Montréal, QB)
• EZee Assist (Toronto, Ont.) 
• Handy.ai (Toronto, Ont.)
• OkRx (Mississauga, Ont.) 
• OPTT Health (Toronto and Kingston, Ont.)
• runQL (Waterloo, Ont.) 
• Streamline (Kitchener, Ont.)
• Transitional Forms (Toronto, Ont.) 
• Vaultie (Toronto, Ont.) 

According to Google, more than 100 Canadian companies have participated in the equity-free program since its launch in February 2020. Google claimed those startups have collectively raised $395 million CAD in funding to date.

The initiative is just one of several Google accelerator programs available to Canadian startups. Earlier this year, three Canadian companies joined Google’s Women Founders accelerator. Google has also opened several of its North American programs to Canadian startups, including those focused on climate change and Black founders.

Google’s program officially begins in October. A demo day and graduation ceremony will cap off the 2024 cohort in December.

Feature image courtesy Unsplash. Photo by Pawel Czerwinski.

The post AI startups dominate latest Google for Startups Accelerator’s Canadian cohort first appeared on BetaKit.

PathPresenter, a Montville, NJ-based pathology and artificial intelligence (AI) startup led by a Canadian CEO, is planning to establish a physical presence in Canada following a $7.5-million USD Series A round of funding.

The startup offers a platform designed to help hospitals, labs, and pharmaceutical companies streamline pathology workflows, share images, and improve diagnostic accuracy using AI tools. PathPresenter’s Series A round was led by life science investor Avant Bio, with participation from Belgian technology company Barco NV and early-stage venture firm Modi Ventures.

“Canada can benefit greatly from the adoption of digital pathology workflows.”

Patrick Myles, PathPresenter

PathPresenter said its current customers include large academic medical centres in the United States. The company hopes that a Canadian presence will open up opportunities for its products north of the border. “Canada can benefit greatly from the adoption of digital pathology workflows,” PathPresenter CEO Patrick Myles told BetaKit.

PathPresenter told BetaKit it is in the process of setting up a Canadian subsidiary in the Waterloo Region. Myles will lead the new subsidiary, which he said will be focused on a combination of commercial activities, such as sales, marketing, regulatory and account, and research and development.

Although based in the US, PathPresenter’s leadership team already includes a strong Canadian presence.

One Canadian on the team is Myles, who previously led Huron Digital Pathology, a digital pathology scanner company based in St. Jacobs, Ontario. Before that, he served as vice president of business development and corporate communications at Teledyne DALSA in Kitchener-Waterloo.

Also on PathPresenter’s leadership team is co-founder and senior vice president of operations, Cory Batenchuk, based in Val-des-Monts, Québec, near Ottawa. Before joining PathPresenter in 2021, Batenchuk worked as a diagnostic specialist in oncology at Google-affiliated research arm Verily and Bristol-Myers Squibb in the US.

Finally, Rahul Garg, PathPresenter’s chief growth officer, is based in Burlington, Ontario. He joined the company in 2023, after serving as chief strategy officer at Qritive, another digital pathology AI company. Prior to that, he was the innovation lead at Reinsurance Group of America and a strategy and technical advisor for KPMG in Toronto.

RELATED: Canadian AppDirect co-founder launches Landbase with Inovia, Desmarais family backing

“Waterloo has a long history in medical imaging, software in particular,” Myles told BetaKit, pointing to his previous employers Teladyne and Huron Digital Pathology, as well as Agfa Healthcare, Canon Medical Informatics, and KA Imaging as examples.

The CEO said the idea for the Canadian subsidiary came about last year. Myles, who has been a resident of the Waterloo Region for over three decades and has held senior positions at local healthtech companies, said he also has a strong talent network in the region.

Four employees are currently working for the subsidiary, a number PathPresenter plans to grow to six by the end of the year. 

“With the closing of the funding round, we are now hiring employees in the region and setting up our subsidiary and facilities. We are currently evaluating several office locations in Kitchener-Waterloo,” Myles added.

Feature image courtesy Unsplash. Photo by Trnava University.

The post PathPresenter to establish subsidiary in Waterloo Region following Series A round first appeared on BetaKit.

Toronto-based retail and logistics startup SecondShop has officially launched the B2C side of its re-commerce platform, which aims to make shopping for secondhand goods as easy as buying from mainstream retailers.

The launch comes roughly five months after the Toronto-based startup closed a previously unannounced $2-million CAD seed financing led by Harvest Venture Partners. Several angel investors also participated in the round.  However, SecondShop declined to disclose their names to BetaKit.

“We immediately saw the opportunity to build what we think is a new vertically integrated opportunity in Canada.”

SecondShop’s “re-commerce” platform is designed to use reverse logistics to give new life to over returned goods. The startup is incubated out of Harvest Builders, the venture studio affiliated with Harvest Venture Partners, that is known for building startups like Neo Financial, OneVest, and Walnut Insurance. 

After finding early success with its B2B offering for wholesalers and retailers, Alex Gold, founder and general partner at Harvest Venture Partners, believes SecondShop has a first mover advantage in the secondary retail market.

“We do believe this is the creation, effectively, of a new vertical,” Alex Gold, founder and general partner at Harvest Venture Partners, told BetaKit in an interview.

SecondShop is led by CEO and founder Cedric George, who is no stranger to the retail and logistics markets. In 2005, he started the Calgary-based home delivery company Custom Delivery Solutions (CDS), which specialized in the white-glove delivery of bulky items, such as furniture and appliances. 

CDS provided warehouse services, including reverse logistics, and over-the-road long-haul transportation, with the final mile being the primary focus and biggest driver of its operations. After scaling in the Canadian market, CDS sold to third-party distribution and warehousing company Metro Supply Chain Group in 2019 for an undisclosed amount. 

George said his experience working with large national retailers gave him a unique perspective on the entire supply chain—not just the transportation of goods, but their full life cycle. He noticed that once a product becomes undesirable or loses its brand-new, factory-fresh appeal, its journey through the supply chain can become complicated and inefficient.

RELATED: Harvest Builders launches venture fund to build on Neo Financial, SkipTheDishes success

“In high value, big and bulky items, the logistics side of it is really cost prohibitive, so retailers that don’t have a really robust ‘keep it sold’ type of program end up eating a ton of transportation cost,” he explained.  “Even when those retailers try to sell, the repurchasers of those products have to deal with the same problems.”

After developing a logistics network that initially focused on the forward movement of goods, George saw an opportunity to apply his knowledge to reverse logistics, which refers to the process of managing the return, housing, and resale of products that are no longer in brand-new condition.

But George wasn’t just looking to solve logistics problems for wholesalers and retailers. While secondhand shopping has increased in popularity dramatically thanks to platforms like Facebook Marketplace, the buying experience is not always seamless.

“If you’re a Facebook Marketplace type of purchaser, you’re not getting any bells and whistles, and you might not even get the product you set out to get,” George added.

Seeing the need for a more efficient reverse logistics solution and a better secondhand marketplace experience, George reached out to the team at Harvest Builders to begin building SecondShop. The startup is the third internally incubated business from Harvest Builders.

“We were connected through one of our investors with Cedric, and we immediately saw the opportunity to build what we think is a new vertically integrated opportunity in Canada,” Gold said.

“From our standpoint, everything needs to find a home that doesn’t include a landfill.”

Cedric George, SecondShop

Gold explained that changing consumer sentiment is making second-hand purchases a first choice for Canadians due to sustainability concerns and rising prices. He said winning in this market requires a comprehensive solution: combining logistics and warehousing with accessibility features like warranties, financing, and loyalty programs to attract a broader consumer base.

That’s what George and Gold believe SecondShop can offer. The startup sources overstock, open box, “scratch and dent” and like-new products directly from Canadian retailers and manufacturers, and offers consumers access to deals on these products from an online marketplace. SecondShop’s current offering encompasses appliances, such as dishwashers or laundry machines, as well as furniture, electronics, and tabletop appliances.

SecondShop’s B2B side has been in operation since January and has moved over 1,000 tons of merchandise. While building its tech platform, the team focused on wholesale operations, allowing the startup to generate cash flow early.

George said the startup quickly became revenue-generating by capitalizing on George’s established relationships with major Canadian retailers, allowing them to secure inventory and launch reverse logistics operations. The startup claims it is currently growing revenues by over 40 percent month over month.

However, George sees becoming a solution for retailers and wholesalers as only part of the overall strategy.

RELATED: ReturnBear to launch operations in UK in July

SecondShop is also focused on providing Canadian consumers with a trusted secondary marketplace, offering features like secondhand warranties, buy-now-pay-later options, and loyalty programs—benefits not typically found on reselling platforms like Facebook Marketplace. Gold believes these offerings are key to mainstreaming secondhand shopping for consumers.

With the B2B and consumer-facing sides of SecondShop’s product now live nationally, the startup is using the March equity investment to scale, focusing on growth through consumer acquisition and hiring—the company’s headcount includes 18 employees, with plans to reach over 50 by the end of the year.

Gold noted that “cash flow positive dynamics emerged very quickly” with SecondShop. However, the startup is not yet profitable as it is currently still looking to invest in growth. George explained that if the startup chose to pause on those growth investments, “we could be a profitable business today.”

“It’s the fastest growing business in the history of Harvest,” Gold said, adding it is “growing faster than Neo Financial or any of the other companies in our portfolio.”

While George and Gold believe SecondShop holds a first-mover advantage, they also acknowledge that reverse logistics isn’t new. Companies like Toronto-based ReturnBear are also tapping into the re-commerce space. However, George pointed out the key difference between companies like ReturnBear and SecondShop is the underlying logistics network. 

ReturnBear focuses on small-parcel, conveyable products like cosmetics, apparel, and footwear. “It’s really turnkey, and there’s not a lot of barriers as far as space and transportation are concerned,” George shared. 

“In the big and bulky and the non-conveyable [market], you can’t just plug into a preexisting network to warehouse and circulate those goods,” he added. “You have to build it yourself.”

George believes his experience in creating cost-effective logistics solutions is what sets SecondShop apart as it looks to mainstream the secondhand market. He and Gold see a larger opportunity for the platform—not only could it relieve the price pressures on consumers in a period marked by high inflation and shrinking purchasing power, but it also helps keep millions of returned goods each year from ending up as waste.

“From our standpoint, everything needs to find a home that doesn’t include a landfill,” George said.

Feature image courtesy SecondShop.

The post Armed with $2 million CAD, SecondShop launches B2C ‘re-commerce’ platform to change how Canadians buy first appeared on BetaKit.

It’s now September and that means the year is almost over. The kids are back in school, cottage long weekends are long gone, and Q4 approaches. It feels like prime time to reflect on what has transpired so far in 2024 before we say hello to 2025.

Thankfully, The BetaKit Podcast dropped two episodes featuring 2024 predictions and big tech questions, offering an easy lens through which to view the year and—most importantly—evaluate my colleagues’ evaluations.

AI dominated both conversations. As podcast co-host Rob Kenedi correctly predicted, companies are spending significant time and resources to figure out use cases for a technology that hallucinates. Big Tech has spent more than $150 billion USD in CapEx over the last 12 months, and AI firms continue to secure big rounds in an otherwise chilly market, with Radical Ventures’ $800 million USD fund, Cohere’s $500 million USD round, and OpenAI’s reported $6.5 billion USD ongoing fundraising being the most recent examples.

But what about return on investment? One of BetaKit editor-in-chief Douglas Soltys’ big questions for 2024 was whether AI would become “de facto or verboten.” Apple and Google both embracing AI in their major consumer smartphone launches would point to the former, but Sequoia’s search for revenue growth has grown into a $600 billion question. Nvidia can’t remain the only company making money on AI.

The podcast also pondered whether 2024 would see a return to tech IPOs. This year has seen almost as many publicly traded companies return private as we saw tech IPOs during the boom times of 2021. Investors have told me that founders don’t like dealing with the burdens and scrutiny of being publicly traded, but a recent report from The Globe and Mail indicates more structural issues in nurturing Canadian companies to the public markets.

Almost nine months in, it all seems to reflect what BDC called “uncertain market conditions” in our story below. What’s your prediction for how the year will close out? My inbox is open.

Bianca Bharti

Newsletter editor

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TOP STORIES OF THE WEEK

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BDC appoints Geneviève Bouthillier as head of BDC Capital

This announcement comes just over three months after BetaKit reported the departure of Jérôme Nycz as EVP and head of BDC Capital after more than a decade at the helm. Nycz left the organization in July. In the wake of his sudden and unexpected retirement, BDC CFO Christian Settano had assumed Nycz’s role. Bouthillier will take the reins going forward.

Bouthillier is assuming leadership of BDC Capital at a particularly tough time for Canada’s VC market, and by extension, the country’s tech startups. BDC’s latest annual report reflects this: the Crown corporation marked down the value of its VC portfolio by $220 million, noting its fiscal 2024 results were “below plan,” partially due to “uncertain market conditions.”

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Academics, nonprofits caught in middle of data consent fight as AI companies push for access to copyrighted works

As major artificial intelligence companies like OpenAI, Cohere, and Anthropic seek more copyrighted works to use to train their models, it is academics, nonprofits, and early-stage AI startups who are struggling the most to find material they are allowed to use, experts told BetaKit.

Restrictions are quickly being added or enforced to a significant chunk of the data that companies are using to train their models. OpenAI, Microsoft, Stability AI, Anthropic, Udio and Suno are facing copyright lawsuits from newspapers, authors, and some of the world’s largest record labels. And a growing number of web publishers are attempting to bar AI web crawlers from scraping their content.

“What this means for the organizations and AI developers that do respect robots.txt preferences … the quality of models they can produce will be worse,” said Shayne Longpre, lead of the Data Provenance Initiative.

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Union representing Paper tutors threatens legal action following mass layoff

Earlier this year, COPE local 131 in Ontario and SEPB-Québec local 574 were granted accreditation to represent Paper tutors in collective bargaining following a secret vote. Both unions were still in the process of preparing first negotiations when Paper laid off all the tutors, SEPB-Québec told BetaKit in an email.

“SEPB-Québec will take all legal action they deem necessary to ensure that employees are treated fairly,” the union said in a statement.

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OMERS Ventures to be moved under new Private Capital group run by Michael Block

After OMERS Ventures managing partner and global head of ventures Damien Steel left for a portfolio company, industry observers speculated to BetaKit that the Canadian pension fund would soon roll its venture capital arm under the leadership of Michael Block. Almost one year to the day, that prediction has come true.

On September 10, OMERS announced the promotion of Block, previously senior managing director at OMERS Private Equity, to head of its newly-created Private Capital group. In this new role, Block will oversee Ventures, Growth, Green Tech, Life Sciences, European and Asia-Pacific private equity, as well as the firm’s global funds strategy.

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Saskatchewan tech sector employment doubled over four-year period: report

According to data shared Tuesday at a press conference held by the government innovation agency in Saskatoon, employment in the province’s tech sector has grown nearly 109 percent to 5,489 workers from 2019 to 2023. Between 2016 and 2023 the tech sector accounted for 10 percent of all new jobs created in the province, more than mining and manufacturing despite those sectors being larger.

The Saskatchewan tech sector has added 715 jobs on average annually since 2016, which would put the province on pace to exceed its target of adding 7,893 jobs by 2030.

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AI is learning fast, are we?

At St. Michael’s Hospital in Toronto, healthcare professionals will soon use AI-powered tools to identify patients at the highest risk of being admitted to the ICU.

In radiation oncology, researchers are leveraging AI to accelerate treatment planning, promising faster, more precise care.

You might think that training artificial intelligence models to solve major medical challenges would be the hardest element of these workplace initiatives. But it turns out programming humans is even harder.

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Don’t miss 300+ speakers across 9 content tracks, opportunities for women in tech and startups, plus enhanced networking and lead generation. Don’t miss out on our food trucks and exclusive after hours socials! Use code: ELEVATEFESTBETAKIT at checkout.   

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Funding, Acquisitions, and Layoffs

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SFO – Landbase – $12.5M USD
VAN – DIGITAL invests $53M CAD across 11 projects
VAN – Teal acquired by Mercury
VAN – Catalera BioSolutions – $8.8M CAD
VAN – Spare – $42M
TOR – Ecomtent – $1.15M CAD
TOR/PHL – Radiant Biotherapeutics – $35M USD
MTL – Luge Capital – $96M CAD
OTT – Kahi – $2.3M CAD
HFX – Iris Booth acquired by Rundle Partners

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The BetaKit Podcast

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Pablo Srugo wanted to be “insanely rich.” It killed his startup.

“This was mine. This was done. I was going to be the next Steve Jobs, I was going to be rich—everything was happening. And now they took it away.”

As the young co-founder of Ottawa-based Gymtrack, Pablo Srugo had one goal: “become insanely rich.” Now a partner at Mistral VC, he joins the podcast to share what went wrong and caution founders against becoming their own worst hypebeast.

Feature image courtesy Cohere.

The post Evaluating our 2024 tech predictions as Q4 approaches first appeared on BetaKit.

What happens when it doesn’t work out?

At BetaKit, we cover fast-raising and fast-scaling companies. It’s the nature of the industry. But for every fast-scaling startup successfully chasing that exit, there are five more that have it in the palm of their hand, only to see it slip away.

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

At 22, Pablo Srugo had only one goal: to “become insanely rich.” At 25, he thought he had made it with his Ottawa-based startup Gymtrack. Now a partner at Mistral VC, he’s going to tell us exactly what went wrong and what he learned from the experience.

“This was mine. This was done. I was going to be the next Steve Jobs, I was going to be rich—everything was happening. And now they took it away.”

Pablo Srugo
Mistral VC

It is a story Srugo has told before, with equal measures of candour and perspective, and I appreciate the bluntness through which he’s able to parse his mindset during these events—both in the moment and years later. While some moments are truly cringe-inducing in retrospect, I would be hard-pressed to find many unwilling to acknowledge the same about themselves at 22.

I wish more founders would share such cautionary tales with the next generation of entrepreneurs. It’s something Srugo is regularly platforming on his own podcast, The Product Market Fit Show.

Perhaps the most interesting part is the advice a more mature Srugo would give himself were he to start over. But first, you’ll have to hear about how it all went wrong.

What happens when it doesn’t work out? Let’s dig in.

The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy Gymtrack.

The post Pablo Srugo wanted to be “insanely rich.” It killed his startup. first appeared on BetaKit.

This week, the federal government and one of the federally-backed Canadian innovation clusters announced a number of financial commitments for artificial intelligence (AI) projects across the country at the second annual ALL IN conference held in Montréal. 

Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne, announced that the federal government will provide $15.2 million CAD to Québec City-based AI firm Coveo from the Strategic Innovation Fund. 

According to Innovation, Science and Economic Development (ISED) Canada, the funding is part of a $100 million Coveo project to bolster its platform with new generative AI tools. The federal funding will help the company accelerate the development of its AI search platform, Coveo co-founder, president, and CTO Laurent Simoneau said in a statement.

RELATED: Global trends report shows AI adoption still lags in Canada

“We believe that the innovations resulting from this partnership will not only enhance Coveo’s competitive edge as a leading Canadian AI firm but also strengthen our ability to expand our workforce and customer base in Canada,” Simoneau said. “Additionally, this investment will allow us to deepen our commitment to applied research, helping to sustain Canada’s leadership in the AI sector.”

In an email statement to BetaKit, Coveo senior vice president of finance Karine Hamel declined to disclose more details about the project, but said it is “continuing” the company’s work in “applied AI to advance generative AI capabilities and other innovations.” Hamel added that Coveo will work with universities for research and talent on the project. 

The funding caps off a busy week for Coveo, which saw the firm launch its Relevance-Augmented Passage Retrieval API offering and announce an integration with Salesforce Data Cloud. 

OSC joins DIGITAL innovation cluster in making funding commitments around ALL IN

Earlier this week, Canada’s federally funded Global Innovation Cluster for digital technologies (DIGITAL) announced an investment of $53 million across 11 projects looking to incorporate AI into a variety of sectors, including subsurface imaging, patient care, and agriculture. 

Much like last year, Canada’s Ocean Supercluster (OSC) also announced a round of funding commitments at ALL IN, this time committing $4.5 million CAD in support for three ocean projects using AI. 

Kitchener-based remote-operated vehicle (ROV) manufacturer Deep Trekker received $3.4 million for its AI ROV Ship Modeling and Detection Project from OSC. Alongside industry partners like Toronto’s Qii.AI, the $8.1 million project looks to perform ship inspections by using AI with data collected by sensors and cameras on submersible ROVs. 

OSC also provided $661,000 to Vancouver-based ThisFish, which hopes to integrate generative AI into its supply chain platform that automates production, quality control, traceability, and inventory workflows in seafood processing plants. Saint John, New Brunswick-based SeafarerAI also received $386,000 to apply an “AI-enhanced” cloud service meant to predict sedimentation at ports when dredging. 

Scale AI, the Canadian innovation cluster that organizes ALL IN, announced its own call for projects focused on generative AI that will begin on September 26th. It will target a total commitment of $5 million for projects valued at more than $750,000. 

Feature image courtesy François-Philippe Champagne via LinkedIn. 

The post Coveo snags SIF investment as AI project funding flows during ALL IN 2024 first appeared on BetaKit.

Toronto tech hub MaRS announced the 10 entrepreneurs participating in the latest cohort of the RBC Women in Cleantech Accelerator this week. 

The new cohort includes the founders of Xatoms, Permalution, SkyAcres Agrotechnologies, Synoro Medical Technologies, TerraFixing, CERT Systems, Seedark, ALT-PRO Advantage, Seacork Studio, and Viridis Research. 

“To respond to the complex issues of climate change and biodiversity loss, we need innovative solutions and diversity of thought and perspective.”

Thea Silver
RBC

The program looks to support woman-identifying or non-binary founders of a Canadian business working to commercialize a cleantech innovation. MaRS and RBC teamed up to launch the accelerator as a 12-month program in 2021, but switched to a two-year program with its second cohort in 2022.

The two-year program aims to provide women founders with tools and mentorship to help scale their cleantech startups in what reports claim is still a male-dominated sector. The accelerator provides participants with access to investor and mentor networks, opportunities to work with a federal government research and development lab, and a business advisor with sector-specific knowledge. 

“To respond to the complex issues of climate change and biodiversity loss, we need innovative solutions and diversity of thought and perspective,” RBC senior director of environmental impact Thea Silver said in a statement. 

Cohort member Diana Virgovicova, founder of Xatoms, is coming off a prize-filled year. The startup looks to improve access to clean water with quantum chemistry and artificial intelligence (AI). Xatoms recently took home $250,000 and three prizes, including the Best of the Fest prize, the Women in Tech investment prize, and the Front Row Ventures student entrepreneur prize, at this year’s Startupfest. The startup aims to eventually sell a purification filter for consumers and a water treatment powder for commercial use as early as 2025, Virgovicova told BetaKit earlier this year. 

RELATED: Xatoms is planning a quantum leap to clean the world’s water

Permalution founder and CEO Tatiana Estevez is also looking to improve access to clean water in a different way. Permalution harvests water from fog and clouds, claiming its devices can collect up to three times more water than rain. Permalution won the $100,000 prize for The Firehood’s Women in Tech award at Startupfest in 2022 and joined the Women+ Entrepreneur Incubator in 2023. 

Zaffia Laplante, co-founder and CEO of Surrey, British Columbia-based SkyAcres, will also be participating in this year’s cohort. The agtech startup offers an indoor farming software and marketplace aimed at users with underutilized residential and commercial space that can be used to grow and sell produce. SkyAcres was one of three Canadian tech startups tapped to join the 2024 cohort of Google’s Women Founders accelerator program earlier this year.

More information about the founders in this year’s cohort can be found on MaRS’s website. 

Feature image courtesy Diana Virgovicova via LinkedIn. 

The post Xatoms, Permalution among 10-startup RBC Women in Cleantech accelerator cohort first appeared on BetaKit.

The Business Development Bank of Canada (BDC) has promoted Geneviève Bouthillier to executive vice president (EVP) of BDC Capital, Canada’s largest and most active venture capital (VC) investor.

The news was first reported by The Logic this morning shortly before being announced by BDC president and CEO Isabelle Hudon and Bouthillier via LinkedIn posts. A BDC spokesperson confirmed to BetaKit that Bouthillier will begin in her new position next week, effective September 16.

“I have no doubt that [Bouthillier] will leverage her flair, vision, and strategic sense to lead [the BDC Capital team] to new heights and increase our impact as a development bank.”

Isabelle Hudon, BDC

This announcement comes just over three months after BetaKit reported the departure of Jérôme Nycz as EVP and head of BDC Capital after more than a decade at the helm. Nycz left the organization in July. In the wake of his sudden and unexpected retirement, BDC CFO Christian Settano had assumed Nycz’s role. Bouthillier will take the reins going forward.

“The role that BDC Capital plays in the innovation and [VC] ecosystem in Canada is unique, both for the companies we hold in our portfolio and for the investors we collaborate with to grow this asset class in Canada,” Hudon wrote on LinkedIn. 

“We are fortunate to have a seasoned team, composed of players whose talent is widely recognized. I have no doubt that [Bouthillier] will leverage her flair, vision, and strategic sense to lead them to new heights and increase our impact as a development bank. I also know that my colleagues on the Senior Management Committee are excited to see her join us.”

Bouthillier first joined BDC in March as senior vice president (VP) of growth and impact investments. She brings more than 20 years of experience in finance and investing to BDC, having previously overseen medium-sized businesses at Québec pension fund Caisse de dépôt et placement du Québec as VP, and worked as deputy chief investment officer for labour-sponsored Québec fund Fondaction.

In her new role, Bouthillier will oversee BDC’s VC portfolio, including its direct investments in startups, fund-of-fund commitments, and federal programs like the Venture Capital Catalyst Initiative.

“Above all, I am immensely proud to lead such an exceptionally strong and focused team, firmly established within Canada’s investment and technology ecosystem,” Bouthillier wrote on LinkedIn. “I am eagerly looking forward to diving into the new role and … continuing the work we’ve begun over the past few months.”

With more than $6 billion in total assets under management, BDC Capital claims to be Canada’s largest and most active VC investor. To date, BDC Capital has invested $2.2 billion into over 300 companies and $2.2 billion across more than 160 funds.

BDC, which describes itself as “the bank for Canadian entrepreneurs,” is an arm’s length Crown corporation wholly-owned by the Government of Canada that provides loans, VC funding, and advisory services to businesses across the country. While BDC supports public policy, it is also required to be financially self-sustaining. 

RELATED: Jérôme Nycz out as BDC Capital head

BDC has been mandated to support Canadian entrepreneurship—with a particular focus on small and medium-sized businesses—and operate as a complementary player in the market. In fulfilling this mandate, BDC can assume more risk than typical financial institutions. 

The Government of Canada’s last legislative review of BDC—which covers 2010 through 2022—called for the bank to take more risks to finance underserved entrepreneurs. BDC has taken more steps towards doing so since then, launching big new funds for women and Black and Indigenous entrepreneurs.

Bouthillier is assuming leadership of BDC Capital at a particularly tough time for Canada’s VC market, and by extension, the country’s tech startups. As BetaKit reported this summer, the first six months of this year put 2024 on pace to be the worst year for Canadian VC fundraising in a decade, per data from RBCx.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

BDC’s latest annual report reflects this: the Crown corporation marked down the value of its VC portfolio by $220 million during this time, as the performance of its VC investments dragged down its overall returns from 6.2 percent to four percent.

In the report, BDC noted that its VC portfolio’s fiscal 2024 results “were below plan, driven primarily by larger unrealized net fair value depreciation of investments than anticipated as uncertain market conditions continued to have an impact on venture capital’s investments.”

For its part, BDC expects “challenging market dynamics for venture capital” to persist in fiscal 2025, which it said “should lead to further net fair value depreciation and larger net realized losses on investments.”

Feature image courtesy BDC.

The post BDC appoints Geneviève Bouthillier as head of BDC Capital amid “uncertain market conditions” first appeared on BetaKit.

Toronto-based artificial intelligence and e-commerce startup Ecomtent has closed $1.15 million CAD ($850,000 USD) in pre-seed funding as it looks to continue scaling its AI-powered content generator for retailers.

The funding was led by MaRS Investment Accelerator Fund (MaRS IAF), with participation from Techstars, eBay Ventures, and undisclosed angel investors that include executives from the retail and tech industries.

“Longtail keyword matching is dead, and the future will be matching customer intent across both written and visual assets.”

Max Sinclair, Ecomtent

The startup’s solution lets sellers and retailers generate visual and written content with generative AI. The startup says this content is optimized explicitly for AI-powered search across large catalogues on platforms such as Amazon, Google, and Ebay.

“E-commerce is about to change fundamentally,” Ecomtent CEO Max Sinclair said in a statement. “Generative AI will completely transform how consumers shop online, with conversational-style search poised to become the new normal.”

“The current best SEO practices will look completely outdated in just 12 months,” Sinclair added. “Longtail keyword matching is dead, and the future will be matching customer intent across both written and visual assets.”

Ecomtent was founded in 2022 by Sinclair and CTO Timur Luguev. Sinclair previously spent six years on strategic initiatives at Amazon working on projects including the launch of Amazon in Singapore and launch of Amazon Grocery across the European Union. Luguev, for his part, has previously worked at TechBrew Robotics (now known as 4AG Robotics), as well as a postdoctoral researcher at the Germany-based Fraunhofer Institute for Integrated Circuits.

Last year, Ecomtent graduated from Techstars Future of Ecommerce accelerator, which is run in partnership with eBay. In a statement, the startup said it has completed pilots with several retailers, including two retailers with annual revenues of $11 billion and $14 billion, respectively. 

RELATED: Global trends report shows AI adoption still lags in Canada

On its website, the startup says its product is trusted by home goods retailer Domu Brands, Amazon seller community Titan Network, brand marketing agency Ecomcy, and e-commerce platform Oslam.

The company is looking to be the “go-to solution” for the Amazon Seller and Amazon Agency communities. Its technology is patent pending, with a filing recently accepted by the United States Patent and Trademark Office.

Ecomtent offers four pricing tiers for its solution, as listed on its website: a basic plan for sellers at $165 per month, a pro plan for sellers at $465 per month, a plan for agencies and aggregators at $1,500 per month, and an enterprise option with custom pricing.

This latest funding round will allow Ecomtent to expand its team, continue improving its AI technology, and scale its operations.

“We are excited by the unique composition of Ecomtent’s founding team, and the specialist AI talent from elite institutions they have recruited around them, to capitalize on this moment of incredible opportunity to build a category-defining business,” Emil Savov, managing director of MaRS IAF, said in a statement.

Feature image courtesy of Ecomtent.

The post Ecomtent closes $1.15 million CAD in pre-seed funding for its AI-powered content generator first appeared on BetaKit.

The Business Development Bank of Canada (BDC) has reported a significant loss in value for its venture capital portfolio in its latest annual report.

According to its report, BDC’s VC division authorized a total of $403.6 million in investments during fiscal 2024 (which encompasses the year ended March 31, 2024). This is a decrease from the $526.7 million BDC approved in the previous year, a decision it attributed in part to “declines in Canadian venture capital activity and a slower pace of fundraising.”

BDC said in its report that it expects “challenging market dynamics for venture capital” to persist in fiscal 2025.

Of the total funds BDC approved in fiscal 2024, $234.6 million went into direct equity investments and $171.9 million went to indirect equity investments into funds.

BDC’s plan anticipated the value of the investments in its VC portfolio to increase by $33 million in fiscal 2024. However, that value actually decreased by $220 million over the year.

At the end of fiscal 2024, BDC’s adjusted return on equity totalled four percent, which was lower than the planned 6.2 percent. BDC said this drop is mostly because its VC investments lost more value than expected.

As Canada’s largest and most active VC investor, BDC’s performance can signal trends in Canada’s broader VC landscape, although it is not considered a definitive gauge. 

The Crown corporation, which has more than $6 billion in assets under management, has, through its venture division, backed over 300 companies through direct investments, and 600 through indirect investments into over 160 venture funds.

In its report, BDC noted that its VC portfolio’s fiscal 2024 results “were below plan, driven primarily by larger unrealized net fair value depreciation of investments than anticipated as uncertain market conditions continued to have an impact on venture capital’s investments.”

BDC did see a net revenue gain of $51 million in its VC portfolio, surpassing its target of $36 million. The value of its VC portfolio sat at $2.86 billion as of March 31, 2024. 

BDC’s venture portfolio saw net revenue exceed its target by $15 million due to the portfolio divesting from several investments during the year. The bank noted this is “in line with our strategy of supporting the best-performing Canadian companies with the technology and talent to assume leadership at the global level.”

RELATED: Jérôme Nycz out as BDC Capital head

Although BDC’s performance doesn’t directly reflect the state of all venture capital firms in Canada, it does align with the broader trend of declining venture funding activity in the country’s tech sector, a downturn that has been evident since around 2022. 

The Canadian Venture Capital and Private Equity Association recently found that total funding in Canada declined by 14 percent and deal count dropped by nearly 16 percent year-over-year in the second quarter of 2024.

At the same time, venture funds nationwide are raising significantly less than they did over the past two years. According to data from RBCx, as of July 2024, five Canadian VC funds have collectively raised a total of $500 million CAD, putting the country on pace to match 2014.

BDC’s report noted that the business development bank expects “challenging market dynamics for venture capital” to persist in fiscal 2025, which it said “should lead to further net fair value depreciation and larger net realized losses on investments.”

“As venture capital continues to grow to support the Canadian innovation ecosystem and prepares to launch several new initiatives, operating and administrative expenses are expected to increase by $3 million when compared to plan 2024,” BDC’s report stated.

BDC and its risk division BDC Capital have seen several key developments during the calendar year thus far. 

In June, BetaKit was first to report that Jérôme Nycz was retiring from his role as BDC Capital’s longtime leader. That same month, BDC also earmarked $250 million CAD in new commitments to support women, Black and Indigenous entrepreneurs, which would include the creation of two $100-million CAD investment platforms for Indigenous and Black-led businesses.

Feature image courtesy of BDC.

The post BDC writes down venture capital portfolio by $220 million in annual report first appeared on BetaKit.

Montréal-founded FinTech startup Zūm Rails has announced the permanent relocation of its new CEO Miles Schwartz from Canada to its newly established United States (US) headquarters in Miami, Florida. After taking his talents to South Beach, Schwartz will lead the company’s new US growth initiative.

 
Zūm Rails said it will continue scaling its work in Canada as part of an overall North American expansion strategy.

The move follows a 75 percent increase in Zūm Rails’ US business over the last year, the company said in a statement, adding that it is now preparing for at least 50 percent of its overall revenue to originate stateside within the next 18 months.  

Zūm Rails said it selected Miami due to its “emergence as a destination for some of the country’s largest technology and finance corporations,” with the new location bringing the company closer to “leading FinTech talent and resources.”

“The opening of our Miami headquarters marks a new chapter for myself and the company,” Schwartz said in a statement. “We’re ready to roll up our sleeves and make sure that any US company that’s processing payments has the opportunity to take advantage of what’s available at the intersection of open banking and instant payments.”

The new headquarters will house the startup’s sales, engineering, risk and compliance, and customer success teams. 

Zūm Rails said its entire suite of offerings is now available to businesses in the US. The startup noted that it will continue scaling its work in Canada as part of an overall North American expansion strategy, with all of its new capabilities serving both markets.

RELATED: Profitable payments startup Zūm Rails closes $10.5-million Series A

Zūm Rails offers an omni-rail payment solution for businesses that processes digital payments, manages invoices and subscriptions, and collects customer data. The startup was founded in 2020 by Schwartz and Marc Milewski, alumni of Canadian FinTech firms Flinks and Versapay, respectively, alongside CTO Marcel Ferreira. 

Schwartz began as Zūm Rails’ chief sales officer, while Milewski acted as CEO. Schwartz told BetaKit in an email that he took on the CEO job earlier this year as part of his role in growing the US market, adding that the team all thought it made sense given the stage of the company and his revenue focus. Schwartz noted that Milewski is still involved as a co-founder.   

The startup raised a $10.5 million CAD Series A round led by sole investor Arthur Ventures in February. Schwartz told BetaKit at the time that Zūm Rails had achieved $10 million in annual recurring revenue (ARR) and launched in the US in 2023. 

Zūm Rails said it would use the capital to scale its platform in the US and develop new banking-as-a-service capabilities. In April, Schwartz said in a LinkedIn post that Zūm Rails grew by an additional $5 million ARR in the previous six months. 

Zūm Rails claims it is used by 1,000 businesses in Canada and has achieved a “nine-figure valuation.”

Feature image courtesy Zūm Rails.

The post Zūm Rails moves recently-named CEO Miles Schwartz to Miami to lead US growth initiative first appeared on BetaKit.

A new report, shared at the ALL IN conference in Montréal on Wednesday by data platform company WEKA, reveals key findings on the lagging adoption of artificial intelligence (AI) in Canada. 

“Global AI demand is outpacing access to AI accelerators and GPUs needed to power AI projects.”

The study, conducted by S&P Global Market Intelligence, gathered responses from 1500 AI professionals and decision-makers. The data, which offers an overall look at the current trends shaping AI adoption worldwide, noted an “astonishing rate of change” since the onset of ChatGPT 3 and the first wave of generative AI models reached the market in early 2023. 

“In less than two years, generative AI adoption has eclipsed all other AI applications in the enterprise, defining a new cohort of AI leaders and shaping an emergent market of specialty AI and GPU cloud providers,” John Abbott, principal research analyst at 451 Research, part of S&P Global Market Intelligence, said in a statement. 

Abbott’s research team also reported a direct correlation between the degree of AI maturity within a company and its revenue, operating efficiencies, and time to market for product innovation. 

The proportion of all respondents who said AI is “widely implemented” in their organizations grew from 28 percent in 2023 to 33 percent in 2024. Among those in North America, the rate is even higher with 48 percent saying AI drives critical value in their companies. 

RELATED: Generative AI use in the workplace is growing unchecked, new Salesforce survey finds

However, the penetration of these AI tools within Canadian businesses remains low. In Canada, only 35 percent of organizations say AI is “widely implemented, [and is] driving critical value,” according to the report. The average organization in Canada has eight AI or machine learning (ML) projects in the pilot phase and 16 in limited deployment. However, on average, only seven are deployed at scale. 

Although AI is now more widely implemented in global organizations, obstacles remain in deploying AI successfully at scale, the report reveals, with GPU availability among the biggest challenges cited in the report. Thirty percent of organizations surveyed in the report noted GPU access among the top three most serious challenges in moving AI models into production.

“Global AI demand is outpacing access to AI accelerators and GPUs needed to power AI projects,” the report says. 

According to the report, most organizations are also still concerned about the impacts of their AI/ML projects on their carbon footprint. Nearly two-thirds of the organizations globally (59 percent in Canada) say they are concerned about the impact of AI/ML on their energy use, and up to 25 percent of organizations (14 percent in Canada) indicate they are very concerned about AI’s carbon footprint. 

More details about these insights can be found in the full report. 

Feature image courtesy of WEKA.

The post Global trends report shows AI adoption still lags in Canada first appeared on BetaKit.

After a disaster like a hurricane, flood, or fire ravages a building, someone’s gotta clean it up. 

That’s why insurance companies bring in a disaster restoration subcontractor, who use professional-grade climate control equipment like dehumidifiers, heaters, and air movers to dry an environment so property owners can get their building back. 

But the lack of transparency between the three parties–insurance companies, subcontractors, and property owners–creates an “effectively adversarial relationship,” said Kevin Dooley, co-founder and CEO of Ottawa-based Kahi. 

“I think now is the time where, if we don’t really put a concerted effort in taking it, it could supplant us to somebody else.” 

Kevin Dooley
Kahi CEO

Spun out of Dooley’s restoration subcontracting company Drysource in 2020, Kahi produces internet-of-things (IoT) disaster tech sensors that track and manage the climate control equipment used by restoration subcontractors on its platform. Dooley bootstrapped Kahi for a few years alongside co-founders Marc Lennox, Meghan Dagenais, and Chris Wise, but recently raised a $2.3 million CAD seed round led by BDC Capital Seed Venture Fund. Now, Kahi plans to add an analytics component that aims to reign in the often inconsistent pricing and methodology of disaster restoration contractors. 

“The insurance company wants to pay the least amount. The person that owns the building just wants to get their building back, what they had, and sometimes they want to get back more than they deserve,” Dooley explained in an exclusive interview with BetaKit. “Then you have this contractor trying to make as much [money] as often as they can.”

Dooley knows this relationship well, and he’s hoping Kahi can bring much-needed transparency to the process. He’s a “second generation restoration guy” having grown up working at his father’s own business and, as he reluctantly describes, has become a “figure in the space” himself. 

RELATED: BDC Capital recommits to leading seed deals in startups across Canada with new $50-million fund

Kahi’s sensors will prescribe multiple ways an environment can be dried, including the “best” and “most efficient” possibilities, helping insurance companies get some predictability across their supply chain. 

“It gives all stakeholders full visibility into the best to worst [methods], and also the expected time frame,” Dooley said. “Once they choose whatever method they’re using, we can then validate it as it’s occurring to help the service provider stay on track [and] also provide all that data to the other parties to trust that the service provider is actually doing the right thing.” 

Even though Drysource is now a distinctly separate entity from Kahi, Dooley said his two companies are complementary to each other. The duo provides space for product ideation, product testing, and “some level of innovation” by testing Kahi’s tech in the field before deploying to its customer. 

RELATED: Contractor management platform PayShepherd closes $7 million CAD as product, market expansion continues

The all-equity round, which closed in April, also featured participation from a strategic investor that Dooley declined to disclose, but called them a “disaster restoration industry veteran.” Dooley said the funding will be used to increase the company’s headcount in both sales and research and development, aiming to grow the company from 20 employees to approximately 35 employees by the end of 2025. 

“We see an opportunity to position ourselves as the de facto service provider and, in some aspects, become a standard part of how you operate in the [disaster restoration] space,” Dooley said. “I think now is the time where, if we don’t really put a concerted effort in taking it, it could supplant us to somebody else.” 

Kahi is currently using a “guerilla grassroots” approach to move its product and grow sales into the new year, Dooley said, leveraging his own visibility in the space and Drysource’s network of contractors across the United States and Canada to propel the business. As for the name ‘Kahi?’ Dooley was just keeping it simple. 

“It’s a Hawaiian word that means ‘one place,’” he explained. “[In the] early days it made a lot of sense in terms of what we were initially going to market with and what we do.” 

“It was also a simple, short word that we could get the URL for,” Dooley added with a chuckle.  

Feature image courtesy Kahi.

The post Disaster restoration startup Kahi looks to solve “adversarial relationship” between insurance companies and subcontractors with IoT first appeared on BetaKit.

Daniel Saks, the Canadian entrepreneur who co-founded software firm AppDirect, has launched his latest venture, Landbase, out of stealth with $12.5 million USD in seed financing.

Landbase is developing an artificial intelligence (AI)-powered platform that allows companies to automate, unify, and optimize their go-to-market processes. The company, like Saks’ previous venture AppDirect, is headquartered in San Francisco, though its CEO’s Canadian roots run deep.

Daniel Saks remains a member of AppDirect’s board.

AppDirect was founded by Saks and Nicolas Desmarais in 2009. Desmarais is one of Canada’s most influential families across a number of sectors, having backed notable Canadian tech companies like Wealthsimple, Koho, and Borrowell via Power Corporation.

The company provides a platform that helps businesses sell, distribute, and manage cloud-based software and services. It’s an American-headquartered firm, but has offices in Montréal and Calgary. AppDirect has raised over $400 million in venture funding to date, and earlier this year, raised $100 million USD from existing investor Caisse de dépôt et placement du Québec (CDPQ) to expand its AppDirect Capital program.

In an email, Saks told BetaKit he recently moved on from his executive role at AppDirect to start Landbase, though he remains a member on AppDirect’s board. He moved from the role of co-founder and president in 2022, and since 2023 has been co-founder and board member. 

Landbase’s other co-founders include chief product officer Emily Zhang; CTO Raheem Syed; chief data scientist Hua Gao; and chief growth officer Yi Jin.

Landbase’s seed financing round was co-led by A*, 8VC, and First Minute Capital, with participation from Canadian venture firm Inovia Capital, as well as Picus, General Catalyst, and a number of angel investors. 

A* is an early-stage venture firm that has notably invested in fellow Canadian-founded tech company Faire, as well as DoorDash and AirBnB. Saks said Paul Desmerais Jr. and the Desmerais family have also backed the business as angel investors.

RELATED: AppDirect acquires low-code B2B marketplace builder Builtfirst

“Since co-founding AppDirect in 2009, I’ve been committed to supporting the Canadian tech ecosystem,” Saks told BetaKit. “I’m grateful to continue this commitment with Landbase. I’m proud to have AppDirect investors including the Inovia and Desmarais Family support the Landbase team on our journey.”

The startup has developed GTM-1 Omni, an AI model designed specifically for go-to-market. Saks said the model is targeted to B2B businesses of all sizes, adding that Landbase also provides free business intelligence tools to sales and marketing professionals, agency owners, and researchers. According to a statement by Saks, the model can understand and predict outcomes, as well as execute tasks across the spectrum of go-to-market activities.

In its statement, Saks claimed that customers using GTM-1 Omni have seen a seven-fold increase in conversion rate compared to traditional OpenAI models, and a 70 percent reduction in average time spent per generated lead.

Landbase plans to launch a series of products to automate omni-channel go-to-market including inbound and outbound strategies. Landbase hopes to eventually build a developer ecosystem and agency network to offer third-party partners the opportunity to benefit from GTM-1 Omni.

“We are building a go-to-market experience that prioritizes efficiency and results, not manual effort,” Saks wrote in the statement. 

“An experience focused on helping you automate your sales and marketing processes, without the clutter of disconnected tools or the loss of human expertise. An experience where your technology tools work for you, and not the other way around.”

Feature image courtesy of Landbase.

The post Canadian AppDirect co-founder launches Landbase with Inovia, Desmarais family backing first appeared on BetaKit.

After OMERS Ventures managing partner and global head of ventures Damien Steel left for a portfolio company, industry observers speculated to BetaKit that the Canadian pension fund would soon roll its venture capital (VC) arm under the leadership of Michael Block. Almost one year to the day, that prediction has come true. 

On September 10, OMERS announced the promotion of Block, previously senior managing director at OMERS Private Equity, to head of its newly-created Private Capital group. In this new role, Block will oversee Ventures, Growth, Green Tech, Life Sciences, European and Asia-Pacific private equity (PE), as well as the firm’s global funds strategy.

“As far as OMERS Ventures goes, there’s no change on our side.” 

Michael Yang, OMERS Ventures

These changes come alongside news that OMERS Private Equity executive vice president (VP) and global head of PE Michael Graham is set to retire effective February 2025 after decades with the organization. OMERS said the consolidation under OMERS Private Capital is partially due to Block taking over some responsibilities held by Graham.

Graham’s OMERS career began in 2004 as VP on its PE team in Toronto. In 2009, he moved to New York to open an office there, taking on greater responsibilities until becoming global head of PE in early 2020. During this time, he helped grow OMERS’ PE business from $1.5 billion CAD to $25 billion in assets under management. Following his retirement, Graham will remain involved as a senior advisor.

The Ontario Municipal Employees’ Retirement System is one of Canada’s largest pension funds. With Graham now on his way to retirement, OMERS will divide oversight of its PE business at the strategy level between Block and Eric Haley, senior managing director and head of North America PE at OMERS Private Equity. For his part, Haley will become head of private equity and buyout, and lead OMERS Private Equity’s buyout strategy and teams.

“Both [Block] and [Haley] are proven leaders and investors, each with a strong track record,” OMERS chief investment officer Ralph Berg said in a statement. “We have the deepest confidence in them and congratulate them on their new roles.”

These moves mark the latest in a series of changes impacting OMERS Ventures over the last several years, which saw the firm expand to Europe with a dedicated fund in 2019, launch a transatlantic fund in 2020, and share plans in early 2023 for a fifth fund with a unified global investment team. However, since then, OMERS Ventures has pulled out of Europe, replaced former leader Steel with Michael Yang, and seen other investment team members depart.

In early 2023, BetaKit sat down with Steel to discuss his bold vision for OMERS Ventures, which included a fifth fund and a unified global investment team.

RELATED: The future of OMERS Ventures with Michael Yang 

But last August, OMERS Ventures pulled out of the European market to focus on North America, citing challenging market conditions, and Steel left to become CEO of Deep Sky, a Montréal-based carbon-capture startup linked to travel-tech scaleup Hopper—two OMERS Ventures portfolio companies.

Yang, the San Francisco-based managing partner who had been leading OMERS’ United States VC portfolio, replaced Steel as OMERS’ head of VC. This marked the first time OMERS Ventures has been led by someone outside of Canada since its launch in 2011.

Graham told The Globe and Mail last year that OMERS remains committed to VC and the early-stage Canadian market, specifically, but noted that OMERS will likely invest less in VC during 2023 and possibly 2024.

At the time, some industry observers that BetaKit spoke with speculated that without leadership on the ground in Canada, Block could take over OMERS Ventures and oversee it alongside the pension fund’s Growth Equity division, which he took over in April 2023.

RELATED: OMERS Ventures turnover continues with global head Damien Steel joining DeepSky as CEO

Last August, an OMERS Ventures spokesperson told BetaKit that there were no plans for Block to take over OMERS Ventures following Steel’s departure, claiming, “OMERS is committed to the Ventures platform and the leadership team believes that Michael Yang is the best person to succeed [Steel].”

This week, OMERS confirmed that with Graham out, Block would indeed be overseeing OMERS Ventures and OMERS Growth Equity going forward.

“As far as OMERS Ventures goes, there’s no change on our side,” OMERS Ventures head Michael Yang told BetaKit. “Strategy, brand, focus, and resources for Ventures are all the same. The only difference is that within OMERS, I now have a different boss named Mike.”

An OMERS spokesperson declined to provide further comment to BetaKit on these leadership changes, why OMERS decided to create a new Private Capital division, how much of a focus VC and growth equity will be for the firm going forward, or when Block and Haley will assume these new roles.

Over the past year, the ranks of OMERS Ventures’ Canadian investment team have thinned as partner Shawn Chance, investor Charlie Renzoni, and venture partner Ken Nickerson have left the organization. Today, managing partner and head of fund operations Brian Kobus, partner Laura Lenz, and investor Taku Murahwi are OMERS Ventures’ only investment personnel in Canada.

OMERS Ventures has expanded in other markets, however, bringing on three new United States-based investment team members, including partner Ben Fu and investors Ryan Zauk and Julianna Vitolo, and hired two operations and strategy folks in Canada, including head of network development Darrell Etherington (a former BetaKit senior writer and TechCrunch managing editor) and executive assistant Alexandra Stasula. According to Yang, the firm is also looking to hire an associate focused on infrastructure software.

Asked about whether OMERS Ventures has continued to invest during this period, Yang told BetaKit that the firm has made a few new investments recently that have not yet been publicly disclosed. 

He added that 2024 has been a busy year for the organization, involving “a fair bit of recruiting, several exits and other transactions that brought distributions to our [limited partners], lots of follow-ons, and several term sheets on new startups.”

Feature image courtesy OMERS Private Equity.

The post OMERS Ventures to be moved under new Private Capital group run by Michael Block first appeared on BetaKit.

The Québec branch (SEPB-Québec) of the Canadian Office and Professional Employees Union (COPE) has released a statement threatening legal action following the mass termination of Paper’s Canadian tutors last month. 

“Paper may fiddle around by claiming to be experiencing financial difficulties, but we are not fooled.” 

SEPB-Québec executive director Pierrick Choinière-Lapointe

Earlier this year, COPE local 131 in Ontario and SEPB-Québec local 574 were granted accreditation to represent Paper tutors in collective bargaining following a secret vote. Both unions were still in the process of preparing first negotiations when Paper laid off all the tutors, SEPB-Québec told BetaKit in an email.

“SEPB-Québec will take all legal action they deem necessary to ensure that employees are treated fairly,” the union said in a statement. 

Following the publication of this story, COPE local 131 organizer Casey Oraa sent an emailed statement to BetaKit noting the chapter was “similarly concerned and disgusted by Paper’s extreme clear cutting of its tutoring workforce across the country.”

Oraa alleged that Paper had previously committed to the tutors returning to work in early August, but then “kept pushing back” the return-to-work date before terminating all of the tutors on the cusp of Labour Day weekend. Referencing online tutoring contracts between Paper and school boards with unionized teachers and workers like the Toronto District School Board, Oraa added, “we’d be surprised if their actions don’t have ripple consequences beyond Ontario and Quebec.”

“We are absolutely looking into this from many legal angles and have serious concerns about Paper’s actions leading up to these terminations,” Oraa added. “It seems like Paper might be under the mistaken assumption that this ends their obligations under the law.”

In an email statement to BetaKit, a Paper spokesperson said that its recent layoffs were “driven by a fundamental need to improve operational efficiency by right-sizing our headcount to meet the current needs of our business.” 

“The size of our operations today enables us to nimbly deliver the service our district partners expect while putting our business on a more solid and sustainable footing for the future,” the spokesperson said. In its emailed statement to BetaKit, Paper did not directly address the union’s plans to take legal action. 

An SEPB-Québec union representative told BetaKit it had already launched three complaints against Paper for changes in the working conditions after the unionization, but had not made any complaints regarding the layoffs yet. The union claims it has invited Paper to collaborate with Quebec’s government “several times,” and tried to negotiate severance packages for the tutors without success. 

 RELATED: Paper CEO Phil Cutler out, startup cuts 45 percent of HQ staff and all Canadian tutors

“We are evaluating our legal options right now and, if Paper doesn’t discuss with us to make sure they meet their obligation, we will file complaints for every violation of the law that Paper has made in the layoff process,” SEPB-Québec told BetaKit. “We have several lawyers in our staff working on the case.”

The union’s statement alleges that the work previously performed by 130 tutors in Québec and more than 700 in the rest of Canada has been transferred to non-unionized workers in the United States (US). The union also alleges that Paper reportedly informed the workers that their services were no longer required by email. 

“Whether it’s better wages or less restrictive working conditions, management has always asked more of their employees by promising better days without keeping their promises,” Naomi Spiegelman, president of the Paper employees’ unit at SEPB-Québec, said in the statement. “I am sad to see that the company prefers to lay us all off rather than face us as equals at a bargaining table.”

The Paper spokesperson told BetaKit that “the vast majority” of Paper’s partners are based in the US, where it has seen a rapid increase in US state-specific biometric safeguards, like fingerprinting. “Having a US-based tutor workforce allows us to set and maintain a gold standard with respect to these evolving student-safety requirements.” 

After the COVID-19 pandemic proved a boon to Paper’s mission, the startup secured $343 million CAD ($270 million USD) in Series D capital in 2022. Paper went on to make two acquisitions in March 2023, Readlee and MajorClarity, before a series of layoffs in August and September 2023, as well as April 2023, according to a report by The Globe and Mail. 

“We hired aggressively at the onset of the pandemic as schools shifted to online learning and never decreased the size of our tutor team following the post-pandemic decline in demand,” the Paper spokesperson said. “This resulted in our being over-staffed, with many tutors receiving minimal and inconsistent scheduled hours, understandably causing frustration.”

The embattled Montréal EdTech startup’s latest round of job cuts came alongside with the company parting ways with founding CEO Phil Cutler in favour of Silicon Valley EdTech veteran Rich Yang. In a statement sent to BetaKit last month, the company said the move was done to help the organization “return to growth over the longer term.” Two weeks later, Paper announced it was laying off all of its Canadian tutors, with Yang telling The Globe and Mail that focusing on the US market will give the company a chance to rebuild its operation and improve its financial situation.

“We file our certification to represent these workers and a few weeks later, everyone is fired!” SEPB executive director Pierrick Choinière-Lapointe said in the statement. “Paper may fiddle around by claiming to be experiencing financial difficulties, but we are not fooled.” 

The union said it believes the layoffs were an “ideological” decision, calling the layoffs a “scare tactic” to stop potential unionization campaigns. 

UPDATE (09/17/2024): This story has been updated with commentary from COPE local 131 organizer Casey Oraa.

Image source Unsplash. Photo Thomas Park.

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Toronto and Philadelphia-based preclinical biotechnology startup Radiant Biotherapeutics has secured $35 million USD in Series A funding to fuel the advance of its therapeutic candidates.

Based on foundational science from Toronto’s Hospital for Sick Children (SickKids) and the University of Toronto (U of T), Radiant is developing an antibody platform, Multabody, designed to deliver new therapies for patients with life-changing diseases.

Radiant’s all-equity Series A round, which closed last week, was co-led by two existing backers, the Bill & Melinda Gates Foundation and Montréal’s Amplitude Ventures, the latter of which recently closed its second precision medicine fund in May at $263 million CAD. 

Radiant is developing a platform designed to deliver new therapies for patients with life-changing diseases.

New investors BDC Capital, through its Thrive Venture Fund, and Scotland’s Abrdn PLC also participated, with follow-on support from FACIT, Alexandria Venture Investments, and Toronto Innovation Acceleration Partners (TIAP). The round brings Radiant’s total funding to $43 million, and values the startup at $65 million.

To start, Radiant president and CEO Art Fratamico told BetaKit the startup has set its initial sights on cancer, inflammation, and immunology, as well as infectious diseases like HIV through its existing collaboration with the Bill & Melinda Gates Foundation, from which Radiant received a $2-million grant in late 2023. But Fratamico also sees broader applications for the company’s Multabody platform in other areas.

Radiant’s origins date back to work from the laboratories of Jean-Philippe Julien, senior scientist at SickKids and associate professor at U of T, and U of T professor Bebhinn Treanor. Founded in 2020, Radiant has built a proprietary, multi-valent, multi-specific antibody platform called Multabody. Per Radiant, the therapies created through its platform have demonstrated the potential to deliver multi-functional biologics to tackle difficult-to-treat diseases.

“Simply put, Radiant’s Multabodies can do things that traditional antibody treatments can’t do,” Fratamico claimed. “Because they are multi-valent, Multabodies grip targets more strongly. This enables Radiant to address areas of biology where antibodies—even bi-specific and tri-specific—fail, by not having enough grip.”

Fratamico added that Radiant’s platform builds these biologics on a modular scaffold, which he claimed enables quick development and early proof of profile for new therapies. As for competition, Fratamico claimed he is not aware of any other firms developing multivalent and multi-specific antibodies. Its lead clinical candidate is 4-1BB.

Radiant was created by Amplitude, which led the company’s $8-million seed round alongside launch partner SickKids, with participation from Alexandria, FACIT, and TIAP. Radiant emerged from stealth last year, announcing this funding and two partnerships with undisclosed global pharmaceutical players, and bringing on Fratamico as its leader. Today, Radiant’s 14-person team is spread across its labs in Toronto and executive offices in Philadelphia.

RELATED: Amplitude Ventures closes $263 million for second precision medicine VC fund

“The company is using the proceeds to drive 4-1BB towards the clinic as well as advancing other programs in the pipeline which includes its collaboration with the Bill & Melinda Gates Foundation,” Fratamico said. “As the programs advance, the company plans to hire additional scientists and also add to the management team.”

In a statement, Amplitude principal Bharat Srinivasa noted, “This financing will enable the next stage in Radiant’s growth and move the company towards the clinic as it continues to demonstrate the superiority of the Multabody platform against therapeutic targets that cannot be treated with traditional antibodies.”

Venture capital (VC) funding for biotech startups has been recovering in 2024 following a turbulent few years, but many investment firms have also become more selective about which biotech companies they are backing, which has created haves and have-nots.

Per RBCx, only seven percent of the VC raised in Canada in the last decade has gone towards life sciences funds, despite the country punching above its weight: life sciences accounts for some of Canada’s biggest VC exits during this time, like the billion-dollar-plus sales of Chinook Therapeutics, Inversago Pharma, and Fusion Pharmaceuticals. Recently, some have questioned domestic pension funds’ lack of support.

Feature image courtesy Radiant Biotherapeutics.

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Toronto and Montréal-based FinTech startup Beacon has launched its first financial product, a remittance tool designed to help newcomers to Canada receive money from India. 

The startup, which emerged from stealth in May, plans to eventually build a “super app” specifically for immigrants in Canada.

“Our mission is to empower immigrants by removing the traditional barriers and complexities of international finance.”

According to a statement, the new remittance product, called Beacon Remit, allows users to remit money for their education from India to any Canadian bank.

The goal of the service is to ensure newcomers to the country from India, such as students, immigrants, and work permit holders are prepared to settle in Canada.

The startup claims the product is 50 percent cheaper than processing transfers through traditional banks in India, and its exchange rate is “optimized” in order to minimize the total cost of each transaction.

Transfers made from the platform are also approved by the Reserve Bank of India (RBI), Beacon said in a statement. RBI is India’s central bank and banking regulator. 

“I know firsthand how challenging it can be to transfer money from India into a Canadian bank account, so we created a solution that allows users to move their money from start to finish with just one app,” Aditya Mhatre, Beacon’s co-founder and chief product and technology officer, said in a statement.

“Our mission is to empower immigrants by removing the traditional barriers and complexities of international finance, and Remit is the first of many financial solutions we are bringing to market to serve Canadian newcomers,” Mhatre added.

Beacon was founded in 2023 by CEO Stuart Szabo, a former leader at Canada’s Public Sector Pension Investment Board, and Mhatre, formerly a leader at Indian payments giant Paytm. The startup emerged from stealth earlier this year with $5.25 million CAD in seed funding.

RELATED: Can Canadian FinTech woo the customers that banks have left behind?

Beacon’s goal is to create a super app tailored for Canadian immigrants, offering a wide range of services within a single platform. A super app integrates various functions, like payments and other financial services, into one experience. One of the most well-known and oft-criticized examples of the super app model in the tech industry is China’s WeChat.

Several digital remittance services are available to Canadians, but most cater to sending money from Canada to recipients in other countries. In 2022, Canadians sent over $8.3 billion abroad via international transfers, commonly known as remittances, according to the World Bank. Among the companies hoping to disrupt this market are Seattle-based Remitly and Toronto-based Pesapeer.

While the remittance product represents Beacon’s first financial product, the startup also offers resources, such as planning guides, for newcomers to Canada. The startup is also working on a mobile app to help newcomers open a Canadian deposit account before arriving in the country. That offering would encompass Beacon Remit, as well as a prepaid virtual or physical card and ATM withdrawal.

Feature image courtesy Beacon.

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The Government of British Columbia is investing $4 million into tech training charity NPower Canada to expand the Canadian Tech Talent Accelerator (CTTA), a program aimed at upskilling youth who are underrepresented in the tech sector.

The CTTA, launched in 2021, is run through a partnership facilitated by Digital, one of Canada’s innovation clusters. The project is led by NPower, and is supported by Microsoft Canada, CIBC, as well as the federal government and the government of BC.

Over 80 percent of CTTA graduates secure a job or enroll in post-secondary education within six months of graduation.

The CTTA is a national initiative, according to a spokesperson from NPower, however the BC government’s investment is focused on growing the capacity and curriculum of the program’s BC portion.

A statement issued today on the funding noted that the latest investment from the BC government is expected to support an additional 1,800 participants in BC.

The CTTA encompasses a 15-week online skills training and job placement program, which offers students industry certification and support in finding a tech job. Areas covered include data analytics and web development. A statement from NPower noted that the next phase of the CTTA will introduce new skill-building and job opportunities in cybersecurity and generative AI.

According to NPower, the CTTA program has put more than 6,400 people on the path to tech employment since 2021, with the charity noting that 80 percent of graduates secure employment or enroll in post-secondary education within six months of graduation.

RELATED: Google Canada commits $2.5-million grant to NPower Canada to help 5,000 job-seekers develop tech skills

“The CTTA program contributes to making the province’s workforce more inclusive, highly skilled and competitive, and helps build British Columbia’s clean and innovative economy of the future,” BC’s Minister of Jobs, Economic Development and Innovation Brenda Bailey said in the statement.

The program is looking to specifically support underrepresented groups in the tech sector, including those who identify as Black, Indigenous, or People of Colour (BIPOC), newcomers to Canada, women, and members of the LGBTQ2S+ community. 

According to an NPower statement, 77 percent of the 2,200 CTTA participants in BC identify as BIPOC, and 65 percent identify as newcomers. Notably, a 2016 report in The Globe and Mail described Vancouver as CTTA partner Microsoft’s “staging post” for bringing in foreign tech workers.

In a statement, CEO of NPower Canada Julia Blackburn said the new funding will help the program support more underrepresented youth and adults entering the tech sector.

“This investment will enable us to foster a more inclusive workforce, drive innovation, and spur economic growth,” Blackburn added.

Feature image courtesy Unsplash. Photo by Mimi Thian.

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A new Innovation Saskatchewan report shows the province is set to exceed its growth goal to triple employment in the tech sector by 2030. 

According to data shared Tuesday at a press conference held by the government innovation agency in Saskatoon, employment in the province’s tech sector has grown nearly 109 percent to 5,489 workers from 2019 to 2023. Between 2016 and 2023 the tech sector accounted for 10 percent of all new jobs created in the province, more than mining and manufacturing despite those sectors being larger. 

From 2016 to 2023, the number of tech companies in Saskatchewan grew more than 28 percent to 347.

The Saskatchewan tech sector has added 715 jobs on average annually since 2016, which would put the province on pace to exceed its target of adding 7,893 jobs by 2030.The report also found that workers in tech had an average compensation between $82,857 and $87,896, significantly higher compared to the average of $65,075 for all workers in the province. 

“This substantial growth in the province’s tech sector is a direct result of government and industry working collaboratively to support innovative technologies,” said Jeremy Harrison, the minister responsible for Innovation Saskatchewan. 

“The report highlights how Saskatchewan has developed a business-friendly tech ecosystem that is accelerating new technologies, generating hundreds of millions of dollars in revenue and creating new employment opportunities,” he said. 

In 2020, the province unveiled a 10-year growth plan with goals to build a stronger economy by growing Saskatchewan’s population of 1.1 million to 1.4 million and adding 100,000 jobs. Premier Scott Moe said at the time that technology and innovation would be the “catalyst” to grow its core sectors and diversify the economy. 

From 2016 to 2023, the number of tech companies in Saskatchewan grew more than 28 percent to 347, but business creation slowed between 2019 and 2023 as the province saw just 14 new companies, an increase of 4.2 percent.

RELATED: Conexus Venture Capital launches its second $30-million fund to back Saskatchewan tech startups

Revenue data of the tech sector was only available from 2016 to 2022, just before the bottom fell out for tech companies as interest rates and inflation increased. Software companies’ revenues grew 187.1 percent in that time period from $51.2 million CAD to $147 million CAD. Profit margins declined nearly 42 percent in 2022, which could suggest there was an increase in startups raising capital to focus on scaling over profitability.

Revenues of software development and computer services firms grew 61.6 percent from $432.2 million CAD in 2016 to $698.5 million CAD in 2022. Profit margins in the subsector fell from nearly 15 percent in 2016 to 11 percent in 2022. 

Venture capital investment in Saskatchewan reached a high in 2021 at $210 million CAD and fell to $37 million CAD last year, lower than the $114 million CAD in 2019. 

In April the provincial government doubled the cap of the startup investor tax credit to $7 million CAD and since the beginning of the year, the federal government has invested nearly $9 billion CAD in Saskatchewan’s tech ecosystem. In May, the CEO of Conexus Credit Union told BetaKit that Saskatchewan’s tech industry is ripe for opportunity, which is why the financial institution put in $15 million CAD into its subsidiary’s second technology-focused venture capital fund. 

Feature image courtesy Innovation Saskatchewan.

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Vancouver-based transit software startup Spare has secured a $42 million Series B round as it looks to carve out a place in the paratransit sector.

Spare is currently present in more than 200 cities across North America, Europe, and Asia. 

The round was led by return investor Inovia Capital with participation from other returning investors, including Kensington Capital and Nicola Wealth. The funding will be used to expand its global reach into more transit agencies, accelerate the development of its AI-driven platform, and meet growing demand for its transit solutions, particularly in the paratransit sector, the startup said in a blog post. BetaKit has reached out to Spare for more details but did not hear back by press time. 

Founded in 2015, Spare’s platform works directly with transit agencies to provide transportation services and dispatch rides based on riders’ individual needs. Transit agencies can integrate with public and private sector transportation services, including ride-sharing companies like Uber and Lyft, or offer on-demand paratransit services for individuals with disabilities or limited mobility. 

Spare said it has recently announced partnerships with transit agencies in Dallas, the Bay Area, and North Carolina, adding the agencies are using its platform to power their demand response services for paratransit or microtransit. Spare said one of its “pioneering projects” in paratransit took place in Austin, Texas, where it “modernized” the “decades-old” system of the city’s CapMetro Access transit agency. 

RELATED: Spare, Lyft partner to offer flexible transportation for transit agencies

“Spare has been instrumental in helping CapMetro Access transform our paratransit service, making it more efficient and responsive to our community’s needs,” CapMetro vice president of demand response Art Jackson said in a statement. “Their innovative platform and dedicated support have allowed us to offer a more equitable transit solution.” 

Spare is currently present in more than 200 cities across North America, Europe, and Asia. While its focus has been on paratransit, Spare CEO Kristoffer Vik Hansen said in an interview with TechCrunch that the startup is “exploring ways to incorporate non-emergency medical and school transportation services.” 

After securing a $6 million seed round led by Japanese vehicle manufacturer Mitsubishi in 2019, Spare went on to secure an $18 million Series A round in 2021 that resulted in Inovia partner Todd Simpson joining the board. Following a partnership with ride-hailing app Lyft in 2022, Vik Hansen indicated to BetaKit that the company was “likely looking” to raise a Series B round in 2023. 

Earlier this year, Spare also received a $10-million growth capital injection from CIBC Innovation Banking to aid in the development of more artificial intelligence-based solutions for its platform. 

Feature image courtesy Spare.

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Vancouver-based seed-stage startup Teal has been acquired by US-based FinTech firm Mercury for an undisclosed amount, the latter announced in a statement Friday. 

The acquisition comes mere months after the accounting tech startup announced it had raised an $11 million CAD ($8 million USD) seed round. Teal was founded last year by CEO Ian Crosby and design lead Adam Saint, both of which also co-founded Bench Accounting and later worked at e-commerce giant Shopify. 

In a statement, Mercury said Crosby, Saint, and the Teal team will join Mercury as part of this acqusition. Crosby’s LinkedIn profile now states he is Mercury’s head of accounting products while Saint’s profile has not been updated. 

Mercury declined to provide further details about the acquisition to BetaKit. BetaKit reached out to Crosby and Saint for more details but did not hear back by press time. 

“Accountants are important partners in the Mercury ecosystem. Now, as part of Mercury, Teal’s incredible talent, technology and expertise will strengthen what we’re doing to transform banking into a lever that helps ambitious companies operate at their best,” Mercury posted to LinkedIn. 

Teal provides out-of-the-box tools to help vertical software-as-a-service (VSaaS) companies launch accounting platforms, including app code repositories and native integrations with external data sources. Their goal was to help those VSaaS companies give their small-to-medium-sized business customers the ability to more easily draw insights into things like real-time cash flow, per-product profitability, access tax filings, and support from live bookkeepers.

RELATED: Bench and Shopify alumni announce $11 million CAD to build “the Stripe for accounting” with Teal

After founding Bench together in 2010, Saint left the startup in 2016 to work in various roles. He became part of Shopify’s user experience advocacy before working as a product designer for Quora. Crosby led Bench as CEO for 10 years before departing in early 2022 to join Shopify, first as product director of Shopify’s business banking offering and then as head of financial services. The duo reunited in April 2023 to create Teal. 

Founded in 2017, Mercury provides business banking services layered with its own FinTech offerings. The startup raised $120 million at a $1.62 billion valuation in a Series B round backed by Andreessen Horowitz in 2021. 

Mercury reportedly attracted more than 26,000 customers following the collapse of Silicon Valley Bank in 2023. According to reporting from The Information, the Federal Deposit Insurance Corp. (FDIC) has also scrutinized one of Mercury’s partner banks for possible violations of anti–money-laundering and counterterrorism financing regulations. 

FDIC reportedly chastised the bank for what it claims is a lack of oversight over Mercury, citing international account openings and Mercury’s compliance system flagging a curiously low number of suspicious transactions. 

Feature image courtesy Teal.

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At St. Michael’s Hospital in Toronto, healthcare professionals will soon use AI-powered tools to identify patients at the highest risk of being admitted to the ICU. 

In radiation oncology, researchers are leveraging AI to accelerate treatment planning, promising faster, more precise care.

“The only way we will achieve scale is by training more trainers.”

You might think that training artificial intelligence models to solve major medical challenges would be the hardest element of these workplace initiatives.

But it turns out programming humans is even harder.

“The real challenge lies in equipping Canadians with the skills needed to thrive in this new AI-driven landscape,” says Noel Baldwin, Executive Director at the Future Skills Centre. “With unrealized skills vacancies costing us about $25 billion annually—more than 1% of our GDP—there’s a critical need to focus on essential skills and training. To achieve our transition and productivity goals, we must incentivize employers to invest in comprehensive AI training and support the development of relevant programs.”

By now, most individuals and industries have heard about the potential of AI to revolutionize industries and transform lives. 

But what’s not clear is whether the Canadian workforce is ready to adopt and effectively apply this technology.

To address this gap, the Future Skills Centre (FSC) was created in 2019 to foster a more responsive skills development ecosystem in Canada, making sure that workers and employers across fields and geographies are able to adapt to the times and embrace emerging opportunities.

Funded by the Government of Canada, FSC has invested more than $200 million in research and innovation initiatives to strengthen Canada’s skills ecosystem.

“We recognize that Canada’s economy is evolving rapidly as a result of technological, demographic, environmental and geopolitical change,” said Baldwin. “That change inevitably alters the nature of work and it’s our role to understand the gaps that need to be addressed.”

One of the gaps FSC is actively addressing is the ability of Canadian workers to embrace new tools. 

As part of this work, FSC partnered with the Michener Institute to specifically address AI skills gaps in healthcare. The project found that healthcare professionals needed foundational education on AI, helping them understand and embrace the possibilities of the technology.

David Wiljer, Executive Director of Digital Education at the Michener Institute of Education, said the project helped clinicians “identify problems that are emerging in their practice, in the work that they do, that might have solutions in AI.”

Wiljer noted three steps in helping front-line clinicians and leaders feel comfortable using new AI tools: mindset, skillset and toolset.

“We really needed to think about what was the mindset of clinicians and leaders toward AI and how might we influence that and help them to understand what the power of AI might be,” he said. “We needed to increase the skills around decision-making. And on the toolset side, we wanted to create a collaborative innovation hub that would allow people to practice with their new knowledge.”

Of course, healthcare isn’t the only sector that requires Canadians to rapidly scale up their understanding of new technology. 

A recent study performed by The Dais, a public policy and leadership think tank at Toronto Metropolitan University, analyzed data from nine million jobs posted across Canada between January 2020 and June 2023, to examine how the demand for skills has evolved.

The report found a significant rise in job postings requiring digital skills, especially around software/product development and data skills, cybersecurity and system infrastructure skills, industrial modelling and geospatial software skills, design and marketing skills, and workforce digital skills.

To address these skills gaps, Vivian Li, Senior Economist at The Dias, said Canada is going to need more targeted skills development programs, and quickly.

“A big piece of that is funding from the government for some of these skills development programs,” Li said. “Whether it’s delivered through employers or through municipalities. I think that would be really essential.”

Wiljer agrees that additional funding could go to good use to support free training programs, sector-specific research, and leadership development, which he believes are essential to the successful adoption of AI in Canada.

“If we can get leaders on side understanding the value, giving them some basic AI literacy, and having them understand some of the choices that they need to make, then people who have the innovations, have the ideas, can actually plug in and make things happen,” he said.

In Québec, FSC is also funding work that will help Canadians recognize when they need to upskill. 

IVADO, a research, training, and knowledge mobilization association dedicated to advancing and promoting responsible AI, recently partnered with FSC to develop a self-diagnosis tool that allows professionals to evaluate their AI skills and identify areas for improvement. 

The 20-question self-diagnosis tool is free to the public but primarily targets industry professionals with a basic understanding of AI. It’s currently available in French but an English version is in development. 

Réjean Roy, Director of Training and Knowledge Mobilization at IVADO noted that while managers of technical teams generally have a sense of their team’s AI skills, they often lack the detailed knowledge needed to provide effective training.

“One of the things they could do with this tool is determine with more precision that person A is very strong in this particular area whereas person B is weak overall,” he said. “And then given the results obtained with the tool we could direct people to training so they can improve their skills.” 

So far, IVADO has deployed FSC funding to develop nine courses on six different themes and trained more than 3,000 people. They hope to train and certify 2,000 professionals annually.

Roy believes that advancing AI depends on training industry leaders who can, in turn, educate their peers and employees.

There is already a shortage of AI specialists, he noted, and even fewer are well-versed in the technology’s sector-specific applications. Roy refers to those who combine expertise in AI with sector-specific knowledge as “translators.”

“Let’s say you have one or two translators. These people are going to give courses to 20 people, who will then in turn reach 200, 2,000 people,” Roy said. “This is what we have to do sector by sector, region by region, and the only way we will achieve scale is by training more trainers.”

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All images provided by Future Skills Canada.

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Vancouver-based Catalera BioSolutions, which develops biological pesticides for agricultural use, has secured $8.8 million CAD ($6.5 million USD) in Series A funding. 

The all-equity round was led by Chicago-based agtech investor S2G Ventures, with participation from crown corporation Farm Credit Canada (FCC) Capital. Catalera expects to close a second tranche that could bring the round up to $10.8 million CAD ($8 million USD) before the end of the year. 

Catalera launched in May after spinning out from Terramera, a Vancouver agtech company that develops soil composition analysis and biological pest control solutions. Catalera’s CEO, Matthew Dahabieh, was a senior vice president at Terramera and its head of green chemistry solutions. S2G Ventures also backed Terramera’s $59.5 million CAD Series B round in 2019. 

Catalera is a fully independent company focused on commercializing biological products using Terramera’s core technological foundation, the company told BetaKit in an email statement, adding that Terramera is a Catalera shareholder. 

RELATED: Terramera forms new subsidiary to address more problems facing farmers

As opposed to chemicals, Catalera develops a line of biological fungicides, insecticides, and miticides designed for use on crops. The company claims, among other features, that its internal development platform uses proprietary algorithms to detect the impacts of its products on pests and plants better than the human eye.

Dahabieh said in a statement that the Catalera team has been developing biological products for over a decade, adding that the funding will be used to help the spinout go to market. 

Catalera also noted this round represents the first investment by FCC’s newly created Capital arm. FCC, which typically provides loans and knowledge support in the agricultural sector, aims to deploy $4 billion from its Capital arm to support the “high-impact areas” in Canada’s agriculture and food system over the next five years. 

“This transaction aligns with FCC’s commitment to build a capital solutions platform which delivers impactful financing for innovative companies with the potential to advance the Canadian food and agriculture industry,” FCC president and CEO Justine Hendricks said in a statement. “We are excited to support Catalera BioSolutions and leverage our expertise, data, and relationships to help them grow and succeed.”

Feature image courtesy Catalera. 

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Toronto investment firm Rundle Partners has purchased a controlling stake in Halifax-based photography technology startup Iris Booth as the latter’s founder prepares to step back.

Both companies declined to disclose the financial terms of the deal, which closed last month and marks Rundle’s first acquisition to date. 

Rundle managing partner Ian Black described Iris Booth, which has built a profitable, growing business selling self-service photo booths and accompanying software to schools, companies, and healthcare institutions, as “an amazing Canadian success story.”

“We don’t do anything except one thing: we take the perfect headshot, every time.”

Sue Siri, Iris Booth

In an exclusive interview with BetaKit, Black said Rundle is set up to invest in small, profitable, high-potential, founder-owned Canadian startups, and Iris Booth fits that description perfectly. “It’s a really well-built small company that we think has the potential to grow into a much larger company, with a global footprint even, over time,” he explained. 

Founded in 2015 by photographer-turned-tech CEO Sue Siri, Iris Booth aims to make high-quality headshots more accessible and affordable for large institutions through its photo booths and software. Iris Booth caters primarily to college, university, corporate, and healthcare campuses across North America.

Bringing in freelance photographers to take professional-quality headshots for social networks, identification badges, and other online profiles can be expensive and logistically challenging for big organizations. Iris Booth aims to offer a more cost-effective and convenient option.

Iris Booth’s 10-person team will stay on as part of the acquisition, with Ratehub founder and former CEO Alyssa Furtado also joining Iris Booth’s board of directors. 

After nearly a decade at the helm of Iris Booth, Siri plans to gradually step back but remain involved, helping the firm bring on a new CEO and supporting the leadership transition. After which, she plans to continue providing strategic guidance at the board level. “The idea is for me to just take a really gentle off-ramp and eventually retire,” Siri told BetaKit in an interview.

Founded in 2023 and led by Black—a former leader at Shopify Retail, Uber Eats, and Uber Canada—Rundle focuses on acquiring well-run Canadian tech and tech-enabled companies and growing them as their founders step back. Rundle’s investors consist of a group of undisclosed individuals, most of whom are Canadian tech entrepreneurs or executives.

Rather than raise a fund, which Black said brings a pool of capital but also more constraints, with each acquisition, he noted that Rundle brings together the right group of investors in what Black described as a model that sits somewhere between private equity and venture capital.

RELATED: AI photography startup Skylab acquired by ImageQuix

According to Black, Rundle does not have a particular time frame in mind for when it needs to sell or exit an investment. “We can take bigger bets, because some big bets take many years to pay off, and we can also lean into growth when it makes sense but also focus on sustainable growth when that’s more appropriate,” he said.

Today, Black said Iris Booth has hundreds of customers across North America, with 80 percent of its business coming from south of the border. Black declined to disclose the startup’s revenue, but noted that it is profitable—with profits in the “single-digit millions”—and has been growing 80 percent annually for several years.

“[Siri] created this technology that could sit in offices and campuses and take self-service headshots of a very high quality, and with the growth of online profiles … and everyone’s desire to look good, externally and internally, the product’s just taken off,” Black said. 

The idea for Iris Booth came to Siri, a professional photographer with 25 years of experience, when she was approached by a university about taking thousands of graduation photos. While sitting around the dinner table one night, she jokingly suggested setting up her gear in a classroom, recording voice instructions, and giving the kids a remote to take their own photos. 

Siri’s children thought this was a great idea so she built her first prototype in her living room out of cardboard and craft paper. The core idea behind Iris Booth was to figure out a way to mass-produce high-quality headshots—something she said many professional photographers prefer not to do.

“It’s like flipping burgers,” Siri said. “Gordon Ramsay doesn’t want to flip burgers—he doesn’t want to flip 4,000 burgers.”

Initially, Iris Booth went direct-to-consumer, setting up its booths in public places and charging for individual headshots, but the company quickly realized that this was not a winning combination. It eventually pivoted to a business-to-business model in the years before COVID-19, after which Siri said its growth accelerated.

The pandemic made things difficult for the startup, which counted big tech companies among its first clients. At that point, Iris Booth was just another amenity to try and draw in young, cool tech workers, and when those firms went remote, their need for Iris Booth disappeared.

Siri said this led Iris Booth to target more stable, recession-proof industries, and since then, the startup has seen its biggest success with postsecondary and healthcare clients. Today, Iris Booth does not take basic annual school or graduation photos but rather caters to students, teachers, and staff in career centres.

According to Siri, she has largely bootstrapped Iris Booth to date, save for a small amount of funding from family and friends and government subsidies for wages and hiring new students, and sought to grow the startup in a sustainable way. “I was always very careful, very lean, ran the company as small as I could and let growth drive spending, not spending drive growth.”

Black said Siri’s “really disciplined approach to growing while maintaining profitability” impressed Rundle. Iris Booth’s timing was also fortunate. 

“For the longest time, I think people didn’t even recognize there was a market, let alone that we were the only player in this market, so we got to grow organically without spending a lot of money,” Siri said. To date, Iris Booth has grown primarily via word of mouth and events. Iris Booth’s event division, which enables it to make money while also showcasing its product to other prospective customers, has been the startup’s only form of marketing.

“[Iris Booth is] a really well-built small company that we think has the potential to grow into a much larger company.”

Two years ago, Siri said she thought she was getting too old to be working 18 hours per day and decided to explore a sale of Iris Booth, with the expectation that such a deal would likely take some time given the nature of the startup’s business. Iris Booth engaged PwC as a broker and brought in a number of offers. While the process ultimately took longer than she hoped, Siri said she was happy with the result.

The Iris Booth founder was immediately attracted to Rundle given Black’s background and the fact that two of his former employers—Shopify and Uber—were early adopters. After meeting with the firm, she said she felt confident Rundle would stay true to her vision for the business.

“This is very much a family business,” Siri said, noting that her husband, son, and brother all work for Iris Booth. “The joke is, I sold my family, and even though I’m willing to sell my family, I won’t sell them to just anybody, so it was really, really important that I felt the connection and I liked the person on the other side of the table.”

Black said Rundle sees “huge potential” to apply what he and Rundle’s other investors have learned at other tech companies to help Iris Booth grow to another level.

When asked about Iris Booth’s limitations given the human touch that characterizes many types of photography, and the potential for the company’s tech to replace the work of photographers, Siri noted that the startup is “not trying to replace every photographer.”

“We don’t do family photos, we don’t do glamour shots, we don’t do sports, we don’t do craft, we don’t do anything except one thing: we take the perfect headshot, every time,” Siri said. “There’s lots of places we don’t belong, and there’s lots of arenas that we don’t compete in,” she continued. “We’re very clear and very focused on what our intention is, and I think that’s what helped drive success.”

Feature image courtesy Iris Booth.

The post “Gordon Ramsay doesn’t want to flip burgers”: Rundle acquires photography startup Iris Booth as founder prepares to step back first appeared on BetaKit.

Canada’s federally funded Global Innovation Cluster for digital technologies (DIGITAL) has announced an investment of $53 million across 11 projects looking to incorporate artificial intelligence (AI) into a variety of sectors, including subsurface imaging, patient care, and agriculture. 

The projects receiving the largest amount of backing come from companies such as Ideon, Calabrio, and Agi3. DIGITAL said its co-investment joins an additional $106 million in partner backing, giving the 11 projects a total value of $162 million. 

Federally funded innovation clusters like DIGITAL co-invest alongside industry partners into projects that are developing digital innovations through collaborative research and development. 

“By uniting industry leaders, innovators, and academic partners, and focusing on commercialization, talent development, and AI adoption frameworks, we’re solving today’s challenges and building the environment to accelerate breakthrough innovation that keeps Canada at the cutting edge of global AI innovation,” DIGITAL CEO Sue Paish said. 

The largest amount of DIGITAL funding, $16 million, is going to a project led by British Columbia (BC)-based Ideon Technologies with support from Dias Geophysical, VRIFY Technology, Fireweed Metals, and Simon Fraser University. 

The $46 million project, dubbed Subsurface Intelligence to Unlock Critical Minerals Supply, aims to build, test, and deploy subsurface AI solutions that help the mining industry target and accurately map mineral deposits. The project is also expected to aid in the continuous monitoring of mine operations. Ideon raised a $21 million CAD ($16 million USD) Series A round in 2022 to help address the world’s looming critical mineral supply shortage.

DIGITAL is also providing the CareAI project from leader Calabrio Canada with $14 million. Supported by ORX AI, WELL Health, and Queen’s University, the $44 million project looks to automate and manage administrative tasks in medical settings. Calabrio Canada was formerly known as Wysdom, which provided software and services to improve AI-powered virtual agents before American support center solutions firm Calabrio acquired it in January. 

RELATED: Digital Innovation Cluster invests $15 million into AI megaproject from consortium of Canadian healthtech companies 

A project looking to integrate AI into enterprise risk management for the agriculture sector received $7 million from DIGITAL. The $20 million project is led by Winnipeg-based Agi3 and supported by grain company G3 Canada, the University of Manitoba, and agricultural equipment dealer Enns Brothers. DIGITAL said the project will use AI to generate insights and personalized risk profiles that can be used to inform crop insurance, financing, and sustainability within the agricultural sector. 

Other projects supported in this funding cohort include multiple companies working on AI applications in the medical field, mining, education, and more. Details on all of the recently funded projects can be found on DIGITAL’s website. 

DIGITAL has placed a strong focus on supporting medical AI applications over the past year. In July, the innovation cluster invested $15.3 million into Health Compass II, an AI healthcare platform project from Canadian healthtech companies like ORX Surgical, Healwell AI, and WELL Health. In May, AI projects from Swift Medical, RxPx, Gotcare, and AlayaCare also received $10.5 million from DIGITAL. 

Feature image courtesy Ideon Technologies.

The post Ideon, Calabrio headline $53 million AI project investment from DIGITAL Innovation Cluster first appeared on BetaKit.

Despite tough market conditions leaving many emerging managers struggling to fundraise, FinTech-focused Luge Capital closed its second early-stage fund last month after securing $96 million CAD in total commitments.

The Montréal and Toronto-based venture capital (VC) firm ultimately came in just shy of its $100-million target for Fund II, which has a list of limited partners (LPs) ranging from large banks to insurance carriers, pension funds, funds-of-funds, family offices, and angel investors. This brings Luge’s total assets under management to more than $180 million. 

With Fund II, Luge’s strategy will be “substantially similar” to its approach for its first, $85-million fund, co-founder and general partner (GP) Karim Gillani told BetaKit in an interview. The VC firm plans to keep backing seed and Series A-stage FinTech startups across Canada and the United States (US), building a portfolio of 20 to 25 companies. This time around, Luge intends to write bigger cheques and establish an Alberta presence in Calgary.

With Fund II, Luge intends to write bigger cheques and establish an Alberta presence.

The final close of Fund II comes about a year after Luge announced a $71-million first close for Fund II from a group that included Fund I LPs Caisse de dépôt et placement du Québec, Desjardins, BDC Capital, Sun Life, Industrial Alliance Financial Group, Fonds de solidarité FTQ and new investor Inovia through its Discovery Fund.

Since then, Luge has added more first-time backers, including provincial government-funded Venture Ontario and the Alberta Enterprise Corporation (AEC), and Washington, DC’s AAF Management. In a shift compared to Fund I, Luge has also brought on other undisclosed family offices and strategic angel investors, many of whom are trusted advisors with knowledge of the FinTech space and have supported Luge in various ways since its launch in 2018.

To support its growing operations, Luge has added Ha Duong—former head of finance at Toronto-based software-focused growth-stage investor Georgian—as vice president of finance and operations. “[Duong] is one of the most experienced, well-rounded finance and operational leaders in the venture space,” Gillani said. “He spent more than ten years at a leading [VC] firm, developing and enhancing their core operations.”

Luge also plans to hire an investment team member in Calgary and establish a presence there to capture the opportunity it sees in Alberta. “We’ve been seeing a great deal of quality deal flow coming out of Alberta more recently,” Gillani said. To date, Luge has backed Calgary and Toronto-based wealthtech startup OneVest and Edmonton proptech firm HonestDoor. 

“The Luge investment team has deep knowledge and experience in FinTech and we see a great fit with their investment focus,” AEC president and CEO Kristina Williams told BetaKit. “FinTech is a growing sector in the province with companies such as Neo Financial and Helcim to mention a few. We have a number of early-stage FinTech-focused companies that would benefit from Luge’s capital and expertise.”

With Fund II, Luge will write slightly larger cheques and have more room for follow-on investment to adjust for valuation growth over time. The firm has upped its maximum cheque size from $2 million to $5 million, investing $500,000 on the low end. 

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

Luge, which has the capacity to lead or support rounds and tends to take an active role with portfolio companies, plans to invest the majority of Fund II in Canada and deploy one-fifth to a quarter of it in the US, Gillani said.

This final close of Luge’s second fund comes amid a challenging tech market and what is on pace to be the worst fundraising year for Canadian VC in a decade in terms of dollars allocated, according to research from RBCx.

As BetaKit has previously reported, LPs have become more cautious and selective amid the tech downturn, which has led to smaller funds and longer fundraising timelines for Canadian VC firms. Many LPs have focused on more established VC firms, slowing down or pausing their commitments to emerging managers. Per RBCx, 2024 is on track to have the lowest volume of first and second fund raises in 10 years—something that has led many to pull the plug.

Last year, Luge co-founder and GP David Nault claimed to BetaKit that Luge’s “very disciplined” approach to investing through Fund I, which included steering clear of the “crazy high valuations” of 2021 and providing “meaningful distributions” to its LPs, played an important role in helping the emerging manager secure the commitments it has for Fund II.

RELATED: Luge Capital looks to buck FinTech trends with $71-million CAD first close of new fund

Those distributions have come through National Bank’s majority stake investment in Montréal financial data aggregator Flinks, and the firm’s secondary payout during Burlington, Ontario-based payments startup Tiptap’s growth financing before its restructuring last year.

Gillani noted that fundraising is never easy, but said the support Luge saw from existing LPs gave the VC firm the momentum to bring on new investors and come close to meeting its goal. According to Gillani, almost all of Luge’s LPs from Fund I returned for Fund II, and many increased their commitments.

Luge has already made four investments out of Fund II, three of which have yet to be announced. The fourth was in Montréal insurtech startup Inscora, which is developing risk assessment and sales software for cyber insurance brokers. Earlier this year, Luge led Inscora’s $2-million pre-seed round, which saw support from Luge Fund II LPs Desjardins and Inovia.

Since the “sugar rush” of 2021, FinTech funding has dropped precipitously, with total dollars invested and deal count both down. But Gillani argued that a longer-term perspective paints a clearer picture of where the market sits today.

RELATED: Deal volume in Canada’s FinTech sector fell by 50% in 2023

“If you have a very narrow historical view of FinTech, it looks like FinTech fell off a cliff in 2022,” Gillani said. “But if you zoom out a few years prior to that, what you’ll notice is that FinTech funding spiked heavily in 2021 … [and] has [now] reverted back to normal levels.”

Amid current market conditions, Gillani said that FinTech investors have become more focused on growing startups with strong fundamentals. Companies that meet this criteria have been able to fundraise, while startups with “upside down” unit economics that are struggling to deliver growth are facing more difficulties, he added.

Gillani noted that during the downturn, consumer FinTech has taken a harder hit than business-to-business FinTech, an area where Luge tends to focus more of its efforts. Luge primarily targets FinTech infrastructure plays, which Gillani claimed tend to be more durable over the long run, have higher gross margins, and scale faster, but does make select investments in consumer FinTech provided the startup has an unfair advantage.

Despite challenging market conditions, Gillani said Luge is seeing “tremendous” investment opportunities in Canadian FinTech today to back growing startups with strong fundamentals. 

By strong fundamentals, Gillani means companies with high-quality revenue—such as long-term, “durable,” often recurring revenue—and strong gross margins in a big market with growth. If the startup is profitable, all the better, he said, but noted this is not always reasonable to expect at the stages where Luge invests.

Feature image courtesy Luge Capital.

The post Luge Capital navigates emerging manager minefield, closes second early-stage FinTech fund at $96 million CAD first appeared on BetaKit.

As major artificial intelligence (AI) companies like OpenAI, Cohere, and Anthropic seek more copyrighted works to use to train their models, it is academics, nonprofits, and early-stage AI startups who are struggling the most to find material they are allowed to use, experts told BetaKit.

AI companies are running out of data sources as they seek to continue scaling and advancing their large language models, which are trained on trillions of words of human-generated text from around the web. A June paper by research institute Epoch AI estimated the stock of human-generated public texts to be around 300 trillion “tokens,” which could be fully used by LLMs between 2026 and 2032, or even earlier if models are “intensely over-trained.” 

Notably, Epoch didn’t define public texts beyond identifying non-public texts as instant messages, suggesting its paper refers to availability rather than a guaranteed right to use.

OpenAI web crawlers were the most heavily restricted, followed by Anthropic, and Google’s AI crawler.

Restrictions are quickly being added or enforced to a significant chunk of the data that companies are using to train their models. OpenAI, Microsoft, Stability AI, Anthropic, Udio and Suno are facing copyright lawsuits from newspapers, authors, and some of the world’s largest record labels. And a growing number of web publishers are attempting to bar AI web crawlers from scraping their content.

Between April 2023 and April 2024, AI-specific restrictions were added on five percent of the data in three widely used datasets—C4, RefinedWeb and Dolma—and on 25 percent of the most critical sources, according to a July study by the Data Provenance Initiative, a volunteer collective of global AI researchers that audits AI-training datasets.  

The study examined 14,000 domains and found a “proliferation of AI-specific clauses to limit use” in websites’ robots.txt files, which tell web crawlers what they are allowed to take and what they can’t. There’s no legal requirement for crawlers to respect a website’s robots.txt file.  

Shayne Longpre, lead of the Data Provenance Initiative and a co-author of the July report, said the percentage of data now under restrictions is “significantly higher” when factoring in websites’ terms of service documents. Between 45 and 55 percent of websites in the three datasets now have data use restrictions in their terms of service, which are legally enforceable. The paper estimated the amount of restrictions will only continue to grow.

“What this means for the organizations and AI developers that do respect robots.txt preferences … the quality of models they can produce will be worse,” said Longpre, who is also a PhD candidate at the Massachusetts Institute of Technology researching the responsible training, evaluation, and governance of general-purpose AI systems. 

The quantity and quality of data is important to large language and other foundational models, he said, and these restrictions hit both. Sources of high-quality data, including news websites, periodicals and social media platforms, were most likely to have implemented restrictions.

OpenAI web crawlers were the most heavily restricted (25.9 percent of the data), followed by Anthropic (13.3 percent), and Google’s AI crawler (9.8 percent). Toronto-based Cohere was the least restricted, at 4.9 percent.

Caught up in a copyright fight

Major AI developers have said that they need more data, and particularly copyrighted data, to improve the quality of their models. In a submission to the British House of Lords in January, OpenAI argued it should be allowed access to copyrighted data for free because it would be otherwise “impossible” to continue training ChatGPT.

However, Roxana Sultan, chief data officer and vice-president of health at the Vector Institute, told BetaKit that AI models don’t necessarily need copyrighted data to continue improving. 

“The organizations that are most hard-hit by this are smaller companies that can’t afford to spin up more complex crawlers…as well as web archives, academics, and nonprofits.”

“Right now there’s a lot of research happening specifically to address that question,” she said. Companies can use a mix of open-source and synthetic data—data that’s artificially generated specifically to train AI models—and modify it to increase the diversity and quantity of the training sample. 

“The key to improving the quality of a gen AI model is ensuring the quality and diversity of the data. That doesn’t necessarily mean data forever, data ad infinitum,” she said. 

Longpre said the foreclosure of parts of the open web—the parts of the web that are accessible without a password or paywall—has unintended consequences. The Internet Archive and Common Crawl, which crawl the web for archival purposes, are heavily used by academics and journalists, and “tens of thousands of academic articles have been written off the back of that research,” he said. “But at the same time, they can also be used for nonprofit and corporate AI, so there’s a conflation of uses that makes it hard right now for websites and data creators.” 

Having to ban crawlers with public-interest functions to avoid AI startup scraping is an example of the challenges web publishers face when trying to express their preferences for how their content be used, Longpre said. They have been forced to enumerate every possible AI-related crawler and disallow them through their robots.txt file, rather than being able to express preferences such as only having their content used for non-commercial purposes, or only with attribution. Recent reporting by 404 Media has revealed the difficulties publishers have faced in attempting to stop Anthropic from scraping their content. 

“The largest AI companies can likely afford to license a lot of the highest-quality data, and some are already doing that. It’s also the case that they have really strong crawling technology, and if robots.txt files are not enforced, depending on the outcome of these lawsuits in the U.S., they may keep fighting to get access to this data anyway,” he said. “The organizations that are most hard-hit by this are smaller companies that can’t afford to spin up more complex crawlers…as well as web archives, academics, and nonprofits in the field of AI and outside of it.” 

Sultan told BetaKit that the Vector Institute has seen those growing limitations. 

“The restrictions and things like that are certainly very visible to us,” she said. “Certainly for academic organizations and organizations that do research, and small and medium enterprises in the AI and machine learning space, if they’re early in their journey and still in the R&D phase and doing a lot of work similar to an academic institution, they’ll get hit with even more restrictions because there are greater restrictions on anything construed as commercial.” 

Consultation, negotiation, litigation

As data consent becomes a growing issue, Cohere, Google, and Microsoft have asked the Canadian federal government for a legal exemption to the copyright act that would allow them to use copyrighted materials to train their models without being required to pay rights-holders or obtain their permission.

Innovation, Science and Economic Development Canada launched a public consultation last fall asking for input on whether to amend the copyright act in response to generative AI systems. One question asked whether AI firms should license copyrighted material when training commercial models, or whether to offer an exemption similar to the fair dealing provision in the Copyright Act, which allows for the use of copyrighted works for purposes such as education, criticism and review, and satire and parody.

All three companies argued that text and data mining for AI training isn’t copyright infringement, claiming the AI model is consuming data only to learn concepts, facts, and patterns, and not for its expressive content. Being required to pay for copyrighted content could risk Canada’s lead in AI development, they argued, and further contribute to the country’s productivity crisis. 

“What we find from big tech companies is a resistance to admit liability and sit down and negotiate.” 

Margaret McGuffin
Music Publishers Canada

Microsoft noted in its submission that there is a “shortfall in the data that companies and organizations have access to in order to benefit from the promise of AI” that access to copyrighted works could help to address. “More open access to data is needed to help organizations of all types take advantage of AI.”

Both Microsoft and Google Canada declined BetaKit’s interview requests. Cohere did not respond to multiple emails.

Cohere said in its submission that rights holders who don’t want their work to be used for AI training can use technological protection measures—such as passwords, paywalls, captchas or encryption—to prevent it. Microsoft said it has introduced options for creators to request their works not surface in outputs by the company’s Bing generative AI chatbot, and that Bing will also not engage in copyright-infringing outputs like providing song lyrics or excerpts of novels if requested, changes that were made after discussions with creators.

The companies said they shouldn’t be required to disclose data in their training sets, arguing that LLMs ingest far too much data to be practical, and the datasets can change as a foundational model is continually developed.

Paul Banwatt, a partner at Gilbert’s LLP in Toronto whose practice includes high tech intellectual property litigation, emerging technologies and music and entertainment law, said disclosure and attribution of data sources “is not foreign” to a fair dealing-type exemption if the government were to ultimately go that route. But he added that even if AI companies were given that exemption, rights-holders are likely to continue restricting access to their works through their terms of service. 

“[Companies] may be in a position where, even if you had the right under the copyright act to train your model, you have to disclose that you did so in an unlawful way via terms of use [violations],” he said.

Numerous groups representing artists, musicians, authors, and other copyright holders urged the government to reject those proposals. Music Publishers Canada, in its submission, noted AI developers themselves consider copyrighted works to be quality sources of data, and argued an “opt-out” copyright system and lack of requirement to disclose sources would kill the emerging market for licensing music to AI companies. 

“The false narrative is that licensing will stifle innovation, and we know that’s absolutely not true,” said Margaret McGuffin, MPC’s chief executive officer. “What we find from big tech companies is a resistance to admit liability and sit down and negotiate.” 

McGuffin said she wants to see the government require companies to disclose the data used to train their models, similar to what the European Union has done, which she said will “help in…compelling companies to come to the table or face litigation.”

Sultan said that while she can’t speak for other organizations’ data management practices, it is possible, with effort and resources, to properly attribute and disclose the data sources that were used to train a model. 

Vector has a five-step process for evaluating prospective datasets, including searching it for any copyrighted material with terms too restrictive to use, identifying any ethical concerns with the data, and obtaining any permissions necessary for promising datasets. In its submission to the consultations, the institute noted there are numerous Creative Commons licenses for datasets that allow for non-commercial and even commercial use with attribution. The institute has also been building a tool that could flow the attribution required in the training dataset through to the final product, said Jessica Blackman, Vector’s director of health research operations.

“Ultimately the quality of your model, the types of models we’re trying to create and put out there, that really is very heavily dependent on good quality data. Good quality data usually does come with some degree of parameters,” Sultan said. “It does translate to a return on that investment to seek out the top quality and ensure compliance with their parameters.”

Feature image courtesy Patrick Tomasso via Unsplash.

The post Academics, nonprofits caught in middle of data consent fight as AI companies push for access to copyrighted works first appeared on BetaKit.

What is the secret sauce behind universities that produce the most founders? This year, six Canadian post-secondary institutions made PitchBook’s list of the top 100 universities by number of students-turned-founders.

Andre Charoo believes it’s the Ivy-League-quality education students receive at Canadian institutions (often at a much cheaper tuition compared to the US). Charoo, a Canadian and general partner of San Francisco-based Maple VC (which primarily invests in Canadian expats’ startups), said that some of the biggest companies, like Uber, Slack, OpenAI, and Faire, had highly technical co-founders who attended Canadian universities. “We can compete against these [Harvard Business School] guys or these Stanford guys,” he told me. And the successful Canadians that try their hand at raising capital from US investors have already had to fight to get a seat at the table in, say, cutthroat Silicon Valley. That adds to their competitive edge, he said.

Aditya Mhatre, co-founder of FinTech startup Beacon, told me that his time completing the University of Toronto’s MBA program was instrumental in his founder journey. “Interacting with international students facing similar challenges validated my idea for Beacon, and working with local entrepreneurs at Rotman’s Creative Destruction Lab gave me the confidence to pursue this path. The community I built during my time at university has continued to be a tremendous support as I navigate my entrepreneurial journey,” he said. 

A few of the Canadian universities that made PitchBook’s top 100 list this year have invested heavily in their computer science programs, ranking as some of the best globally. Moreover, some leverage their proximity to novel ideas by launching incubator and accelerator programs, such as the University of Waterloo’s Velocity. “[Students’] co-op experiences allow aspiring entrepreneurs to rapidly gain practical industry know-how and with Velocity we develop their skillset and mindset as a founder,” Adrien Côté, executive director of Velocity told me. Since 2008, Velocity has incubated more than 400 companies that are collectively worth more than $26 billion.

Why do you think these universities produce an outsized number of founders? Let’s talk. My inbox is open. 
Thanks for reading on and ’til next week, 

Bianca Bharti
Newsletter editor

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TOP STORIES OF THE WEEK

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​Recon Instruments’ co-founder wants to advance autonomous driving systems with latest venture Matt3r

Eight years after making waves in the wearables market with Recon Instruments, Hamid Abdollahi is back with something new.

A co-founder at Recon, which developed smart glasses and wearable displays for athletes, Abdollahi served as the company’s chief technology officer. Earlier this summer, his latest venture, Vancouver-based Matt3r, introduced K3y—a device that turns cameras in Tesla vehicles into a smart dashcam system that captures every honk and hard brake to make those events instantly accessible on the driver’s smartphone.

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“It’s just straight math”: Assent CEO Waitman sets bar higher after hitting centaur status

It’s mid-August at the Ottawa headquarters of compliance software company Assent, where three giant numbers filled with deflated balloons have been left ajar against the cafeteria wall—‘1’, ‘0,’ and ‘0.’ The block numbers are remnants from a celebration in June, where the company officially announced becoming a centaur, after achieving the coveted goal of hitting $100 million USD in annual recurring revenue.

Armed with mandarin-flavoured sparkling water in one hand and sporadic movement in the other, CEO Andrew Waitman laid out how he thinks it’s possible to achieve his next goal for the company to hit $200 million ARR within four years.

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Report: Québec venture ecosystem still “highly dependent” on public and para-public funding

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The report, which traces the evolution of Québec’s venture capital industry from 2013 to 2023, aims to assess the outcomes of Québec’s long-term strategy to develop a stronger private investment sector. The report also identified potential areas for strengthening the ecosystem by analyzing its evolution over the past two decades.

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Executive director Michael Buhr wants C100 to help Canadian tech startups scale

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In an exclusive interview with BetaKit, Buhr laid out his plans for C100 in more detail, which include expanding beyond just early-stage Canadian tech startups through new programs and events, a renewed focus on connecting those companies to Silicon Valley, and greater attention on core markets.

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Shopify to become Roblox’s first platform commerce partner

Shopify is set to pilot its checkout in Roblox, one of the world’s largest online games, the two companies announced Friday.

With this integration, developers, creators, and brands who are on Shopify can sell physical items to customers using real currency within Roblox games without ever leaving the Roblox platform.

For example, a Roblox player can interact with a shirt displayed on an in-game mannequin to summon a Shopify-powered checkout where they can purchase a real-life version of the clothing in addition to a digital replica for their character. Shopify said it plans to follow the soon-to-be-launched pilot with a “larger launch” in early 2025.

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The most important work in tech is happening on-chain

When planes land in snowy conditions at Chicago’s O’Hare International Airport, they are guided by a machine learning system that makes sure they are positioned within two meters of a specific point 99 percent of the time, a process that requires the highest possible degree of accuracy and security.

It was created by two founders based in Hamilton, Ontario. “We did an aviation tracking project and no one really knew,” said Colin Gagich, co-founder and CEO of Inference Labs. “Canadian Web3 tech is highly undervalued. We’re like a sleeper cell no one knows about.”

BetaKit Talks: You Don’t Know Crypto, will take place on Sept. 24, in partnership with WonderFi, which hopes to engage a broader audience with the innovations of Canadian tech that are being built “on-chain.”

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Here’s what will make or break the next wave of Canadian IPOs

The Canadian tech IPO market might seem like a ghost town right now, but Mia Morisset, Principal at Inovia Capital, is optimistic about the potential for a comeback.

After two years of wrestling with high interest rates, inflation fears, and global instability, going public has become a distant dream for Canada’s SaaS scale-ups. Many of those that squeezed through the door during the 2021 boom have seen their share values falter, with some even retreating back to private ownership this year.

Morisset appreciates the IPO landscape is still rocky, but she’s betting that the tide is set to turn.

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Teladoc Health Canada releases study that shows over 78% of Canadians find accessing mental health support in the health care system a challenge 

Teladoc Health Canada, a leading provider of virtual healthcare services, recently partnered with Modus Research to survey over 1,600 Canadians to shed light on the mental health needs of Canadians and the persistent challenges they face in accessing support.  

Key highlights: 

• 71% would be more likely stay with an employer who fully supported their mental health needs 

• More than 78% who accessed mental health support report that navigating the health care system to find this support was “somewhat difficult” or “very difficult” 

• 53% found it challenging to locate a professional who can effectively help them. Of those who received care, only 28% had high levels of confidence in their diagnosis 

For more information, click here. 

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Funding, Acquisitions, and Layoffs

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PAL – Safe Superintelligence – $1B USD
ON – FedDev issues $5.2M CAD
LON – Deep Breathe – $95K
TOR – Northside Ventures closes $15M CAD fund
TOR – Wombo – $12.2M CAD

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The BetaKit Podcast

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Shopify president Harley Finkelstein cautions Canadian entrepreneurs against “bullshit” narratives

“Using Canada as an excuse for why you didn’t get funding, you didn’t get to hire the right person … I think that’s bullshit.”

Shopify president Harley Finkelstein joins for a brand refresh Canadian entrepreneurship, pushing back against doom-and-gloom narratives before digging into his real issues of concern and offering proactive tips for entrepreneurs looking to scale globally.

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AWS Activate helps startups reduce costs and increase speed to market.

AWS helps startups bring their ideas to life through AWS Activate. As you build and scale your business, Activate credits grow with you to support your changing needs. If you’re an AWS Activate member, you may be eligible for up to $100,000 in credits to help offset your AWS bill.

Credit eligibility AWS credits packages for early-stage startups is based on stage and affiliation with Activate Providers, which are thousands of accelerators, angel investors, venture capital firms, and startup enabling organizations around the world. Select the package that’s right for your startup today.

Visit AWS Activate to get started.

Feature image courtesy R.schneider101, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons.

The post The Canadian universities that ship the most founders first appeared on BetaKit.

Back in May, BetaKit hosted a town hall where Shopify CEO Tobi Lütke noted that ambition is a problem in Canada’s “go-for-bronze” culture.

The point resonated with many founders across the country, but I’m not sure if ambition is the sole problem.

“Using Canada as an excuse for why you didn’t get funding, you didn’t get to hire the right person … I think that’s bullshit.”

Currently, we have: entrepreneurs threatening to leave Canada due to a high cost of living and Budget 2024’s capital gains tax rate changes; Canadian angels saying those tax rate changes are killing their investment pipeline; and we’re in the middle of the worst year for VC fundraising in a decade according to BetaKit’s Josh Scott, who has reported on whispers of emerging VC’s quietly leaving the space as they fail to close funds.

It’s a sharp about-face for the brand of Canadian entrepreneurship compared to say… 2016. But is the doom and gloom legit or just another spin of the wheel in an ongoing cycle?

On the podcast this week, we have Shopify president Harley Finkelstein, someone personally and professionally invested in the state of entrepreneurship, and one of the more doggedly optimistic people I know.

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

I ask Finkelstein if the above issues are core problems or if we’re simply in need of a brand refresh, and it’s interesting which side of the line he falls depending on the subject. Some highlights from Harley on this episode for Canadian founders:

• Be proud of being Canadian.
• Be less Canadian.
• Stop comparing Canada to the US.
• Start thinking and acting on a global scale.

The advice can seem contradictory and perhaps a little hard to swallow if you’re an early-stage entrepreneur. The fact that the Québec venture ecosystem is “highly dependent” on public funding is below Shopify’s stratosphere, but very real for first-time founders, emerging managers, and even some of the entrepreneurs Finkelstein mentions by name on the podcast (almost all of whom are 10 years or more into their entrepreneurial journey).

But here’s the thing: on the whole, Finkelstein is correct in his proclamations, and the complexity lies in understanding the proper calibration for each truism. He seems most interested in busting Canadian founders out of any mental trap holding their company back; for everything else, flavour to taste.

So does the president of Canada’s largest tech company really think we’re being too Canadian? 

Let’s dig in.

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The BetaKit Podcast is presented by AWS Startups: AWS Activate helps startups reduce costs and increase speed to market.

AWS helps startups bring their ideas to life through AWS Activate. As you build and scale your business, Activate credits grow with you to support your changing needs. If you’re an AWS Activate member, you may be eligible for up to $100,000 in credits to help offset your AWS bill.

Visit AWS Activate to get started.

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Recording support for this episode graciously provided by AmberMac Media.

The post Harley Finkelstein wants Canadian entrepreneurs to ignore the “bullshit” first appeared on BetaKit.

Shopify is set to pilot its checkout in Roblox, one of the world’s largest online games, the two companies announced today. 

“This will open up a massive audience of 80 million daily active, highly engaged, Roblox users, and potential customers, for creators and brands.”

Harley Finkelstein

The announcement was made during this year’s Roblox Developers Conference in San Jose, California. With this integration, developers, creators, and brands who are on Shopify can sell physical items to customers using real currency within Roblox games without ever leaving the Roblox platform. 

For example, a Roblox player can interact with a shirt displayed on an in-game mannequin to summon a Shopify-powered checkout where they can purchase a real-life version of the clothing in addition to a digital replica for their character. Shopify said it plans to follow the soon-to-be-launched pilot with a “larger launch” in early 2025. 

“This gives Roblox creators a brand new avenue into entrepreneurship, and brands will be able to sell their products in Roblox experiences,” Shopify president Harley Finkelstein said in a video in the form of a Roblox avatar. “This will open up a massive audience of 80 million daily active, highly engaged, Roblox users, and potential customers, for creators and brands.”

Finkelstein’s digital avatar added that Roblox was one of the most relevant places in the digital world right now and that the partnership will shape the future of “immersive commerce.” Immersive commerce refers to interactive shopping environments in virtual, augmented, and mixed reality. 

First launched in 2006, Roblox is a free-to-play online game creation platform that allows users to create their own games or “experiences,” as well as play games created by others, in a marketplace-like format. The platform is available on PC, mobile, consoles, and Meta’s virtual reality headset Quest. 

Dress to Impress is one example of a viral hit on the platform, becoming Roblox’s most popular experience in recent months with 334,000 concurrent players according to Eurogamer, and scoring a collaborative partnership with singer Charli XCX. The game prompts players with a theme, who then must dress their avatar from a variety of clothing options before rating other players’ fashion choices on the virtual runway. 

The large popularity of the platform amongst global youth underscores recent questions Roblox has faced on its moderation practices. The company faced a class-action lawsuit last year alleging the company targeted child users with an illegal gambling ecosystem. Roblox was banned in Türkiye over child exploitation and inappropriate content concerns last month following a report from Bloomberg that revealed online predators attempting to lure and groom children on the platform.

In an email statement to BetaKit, Shopify referred to Roblox regarding the potential of parental controls for the integration. Roblox told BetaKit that shopping on its platform is only available to users in the United States aged 13 and up, and all payments are done via fiat rather than its virtual currency.  

Roblox went public on the Nasdaq in 2021, closing at $69.50 per share and a market cap of $38.26 billion according to CNBC. The company’s share price peaked above $134 per share during a pandemic-fuelled popularity surge in Nov. 2021 but has since dropped below $43 per share as of market open on Friday. 

Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.

UPDATE (09/06/2024): This story has been updated with commentary from Shopify and Roblox on the platform’s parental controls for shopping.

Feature image courtesy Roblox via YouTube.

The post Shopify to become Roblox’s first platform commerce partner first appeared on BetaKit.

The Alberta Securities Commission (ASC), the Edmonton Police Foundation, and the Edmonton Police Service have partnered to seek out new tech solutions to combat online crypto investment fraud.

The ScamShield Investor Protection Challenge is calling on those working in the tech sector, academia, and other sectors to propose new ways to enhance investor protection against crypto scams. The challenge, which has a prize pool of up to $130,000 is open to all interested parties, including individuals, teams, startups, and established firms. 

“As technological developments create new opportunities, criminals continually refine their methods, exploiting the digital economy in increasingly creative ways.”

The ASC estimates that more than 60 percent of the $309 million of investment fraud reported to the Canadian Anti-Fraud Centre last year was tied to crypto investment. The commission noted that in the city of Edmonton alone, there were over 80 victims who lost a combined $7 million to crypto-related fraud in 2023.

“Anyone can be the victim of a scam and the impact can be devastating,” the ASC’s director of enforcement Cynthia Campbell said in a statement.

“We are partnering with the [Edmonton Police Foundation] and the [Edmonton Police Service] and hoping to engage more disciplines so that together we can find new ways to address this significant issue, protect more Alberta investors, and strengthen our capital market,” Campbell added.

In a statement, the ASC noted that crypto scammers often use technology as well as psychological manipulation to deceive victims through social media deepfakes, romance scams, emotional manipulation, and other online tactics.

Deputy Chief Devin Laforce of the Edmonton Police Service’s Investigations and Support Services Bureau noted that scammers often capitalize on the general public’s lack of knowledge and experience with crypto as a high-risk investment vehicle, as well as the challenges in tracing cryptocurrency transactions.

RELATED: Kraken appoints Alex Mehrdad as new leader of crypto exchange’s Canadian operations

“As technological developments create new opportunities, criminals continually refine their methods, exploiting the digital economy in increasingly creative ways,” Laforce added. “Police continue to investigate and pursue these criminals to the fullest extent of the law, but the pervasiveness of their tactics makes this an issue we cannot tackle alone.”

The ScamShield challenge will take place over two phases. The first will assess the proposals and implementation roadmaps of submissions. Submissions will be accepted until November 4. 

Proposals that advance to the second phase of the challenge will receive a more detailed assessment, and may include a product demonstration, presentation, or a Q&A with the judges. Judging will take place until December 13, and a winner will be announced January 17. 

Feature image courtesy Unsplash. Photo by Kanchanara.

The post “The impact can be devastating”: ASC launches $130,000 tech challenge in bid to combat crypto scams first appeared on BetaKit.

It’s mid-August at the Ottawa headquarters of compliance software company Assent, where three giant numbers filled with deflated balloons have been left ajar against the cafeteria wall—‘1’, ‘0,’ and ‘0.’ The block numbers are remnants from a celebration in June, where the company officially announced becoming a centaur, after achieving the coveted goal of hitting $100 million USD in annual recurring revenue (ARR). 

“It’s a lot of work but if you did 25 percent [growth] for three-and-a-half years, you’re at $200 million, right? It’s just straight math.”

Andrew Waitman

Assent provides a platform that collects vendor management, ethical sourcing, and product data to help complex manufacturers navigate compliance and environmental, social, and governance (ESG) reporting. Essentially, products like electronics are made of elements like gold, tin, or tungsten, and certain regulations require product manufacturers to know where those materials come from. That’s where Assent comes in: the platform helps manufacturers compile a list of material sources. 

With his 10th anniversary leading the company approaching in September and the revenue achievement in the rearview mirror, CEO Andrew Waitman sat down with BetaKit to reflect on the unexpected advantages that brought him to the milestone, and how war kept him away from it longer than he’d hoped. 

Armed with mandarin-flavoured sparkling water in one hand and sporadic movement in the other, Waitman laid out how he thinks it’s possible to achieve his next goal for the company to hit $200 million ARR within four years. 

Network Effect 

Long before leading Assent to centaur status, Waitman grew up a “dirt poor” adopted child in Ottawa, an upbringing he believes influenced him to pursue “practical jobs that were half decently paid.” He wasn’t a fan of cutting up frogs, or the expensively lengthy process of learning litigation, so he saw his “ticket out of poverty” at the University of Waterloo’s engineering program. 

He graduated with a BASc in electrical engineering in 1987 before obtaining a Master’s degree in Business at Western University, leading to a stint in the venture capital (VC) scene as a managing partner at Ottawa-based Celtic House Venture Partners in the late 1990s. 

Waitman then became a CEO in 2009 when he joined data analytics company Pythian, eventually using his status to join the Ottawa-area charity boxing match Fight for the Cure. The event pits Ottawa-based business leaders against each other in the ring to raise money for the Ottawa Cancer Foundation. Fight for the Cure famously hosted the boxing match between current Prime Minister Justin Trudeau and Conservative Senator Patrick Brazeau in 2012. 

Prepping to take a punch for charity, Waitman began training with the event’s co-founder, Matt Whitteker, every Wednesday. Waitman informed Whitteker that he was imminently departing Pythian during one fateful training session in 2014, leading Whitteker to suggest Waitman “check out” Assent, the consulting organization he co-founded in 2010. 

“I said ‘Okay, Matt, I don’t want to make any commitments but you give me a free office and I’ll give you some free advice.’”

Whitteker’s early experience on the consulting side made it apparent that there was a role for software, Waitman explained, as Whitteker would often help companies with their compliance needs in a “one-off” capacity before moving to another company and doing the same tasks. 

In response, Assent pivoted to a product-focused business in 2012 and began offering its conflict minerals solution as a result of the United States’ Dodd-Frank Act. As Waitman puts it, there were so many manufacturers going to the top of their supply chains asking for the same information from the same suppliers; a “tedious” process without technology that was “begging for a network effect.” 

Over/Underdog

Nearly two years after Waitman officially took the CEO job in September 2014, Assent looked to shed its bootstrapped status and began seeking outside institutional investment. Success eventually came from properly navigating an emerging industry that VCs aren’t familiar with. 

“When I went to raise the Series A, not a single person had a clue what I was talking about, and therefore I couldn’t raise in Canada,” Waitman said. “When I went looking in Boston and New York, very few really understood what I was doing.”

For its first-ever external raise, Assent managed to secure $20 million CAD from Boston’s Volition Capital, with support from the OpenText Enterprise Application Fund, Business Development Bank of Canada (BDC), National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP), and the Royal Bank of Canada (RBC). 

“The issue is that becoming a unicorn is about perception of potential.”

Andrew Waitman

Because VCs look for common themes, it’s that “moat of complexity” that Waitman feels was an underrated advantage. If VCs think they understand your business then there will be venture funding flowing to your competitors, Waitman said. To underscore his point, Waitman looked at the current state of the artificial intelligence (AI) market.

“Everybody thinks they know what they’re talking about with AI, they don’t, but at least they think they do, so it’s the only place where money is moving right now,” Waitman explained. “[…] I just didn’t want to be in any space that was obvious, because the Americans are going to start at least 10, maybe 20 [companies] if it’s super exciting.” 

The Series A round and the macroeconomic environment for SaaS companies led to growing investor interest and understanding, according to Waitman. Assent went on to secure a $40 million CAD Series B round in 2017 and a $131 million CAD  Series C round in 2018.

RELATED: Assent Compliance Canada’s newest unicorn after $446.5 million CAD raise 

The company then reached $50 million ARR in 2021 before securing a $446.5 million CAD Series D round and unicorn status, a $1-billion USD valuation, in January 2022. Unicorn status is nothing to scoff at, but it wasn’t what excited Waitman. 

“The issue is that becoming a unicorn is about perception of potential,” Waitman explained. “[…] That doesn’t mean you’ve solved the issue of growing revenue over $100 million, which you could look at as a very, very, very tough milestone.”

The funding was used to expand Assent’s presence in Europe, particularly Germany, and expand its workforce by 40 percent. Assent employees are kept in the loop on the company’s financial goals and progress on an internal financial results dashboard. The entire company knew centaur status was an important milestone, and Waitman’s ‘big bet’ on Europe had Assent pencilling in the $100 million ARR milestone later that year. 

Market disarray 

According to Waitman, Europe is an important market for a business like Assent. The European Union is often a trendsetter in compliance standards and as a result, the population is “attuned” to regulations, he said. 

Additionally, as opposed to Americans balking at fines, Waitman believes Europeans follow regulations because “it’s the right thing to do.” Entering the market through Germany, a complex manufacturing hub with companies such as Mercedes, Porsche, and BMW, seemed like a slam-dunk for a compliance software company. 

Then, war broke out. The Russian invasion of Ukraine in February 2022, along with the rise of interest rates, placed the European market into disarray just as Assent was cementing its place in the region. The import of cheap Russian crude oil into Germany, used by the country’s chemical and automotive manufacturing industry, fell by 99.9 percent over the next year. 

The abrupt change led Assent to diversify its European go-to-market efforts beyond Germany by looking to manufacturers in France, Italy, the United Kingdom, and the Nordic countries sooner than planned. It took a while to recover, but after readjusting its resources Assent got back on track. 

Centaur Celebrations

In May 2024, Assent finally became a centaur. 

Despite the circumstances, Waitman seemed content with the final timeline. 

“2022 was when I was trying to hit [centaur], and in ‘23 I thought we were gonna get super close but there were a lot of headwinds,” Waitman explained.  “Then we hit it in ‘24, so eight years after [Series A], which is still pretty darn good.”

Assent’s offices in the US, Kenya, Malaysia, Netherlands, and Canada each had their own tailored festivities, food, and presumably giant balloon-filled ‘100s’ to commemorate the milestone. Additionally, Assent earmarked funds for employee resource groups to donate to charities of their choosing, launched a mentoring program to connect employees with its executive team, and sent surprise gifts to 100 team members. 

Assent’s achievement is one of very few among Ottawa tech companies. Shopify may have been a “significant win,” but Waitman hopes that more companies in Canada’s capital can “get to a scale so one wind coming through doesn’t blow everything down,” he said. 

While there is no “silver bullet” to becoming a $100 million ARR company, Waitman headlined a panel at Invest Ottawa earlier this summer where he encouraged early-stage founders to not look too far ahead, take their milestones step-by-step, and to adapt when something is not working. 

RELATED: Assent CEO talks ESG’s growing impact on stakeholder, customer, and investor relationships

In an email statement to BetaKit, the company said it is currently well-positioned with its financial resources including a strong balance sheet, supportive private equity investors, and outside investor interest, but may consider engaging with new investors if new opportunities arise. At the moment, the company isn’t looking toward an IPO within the next 12 months. 

Waitman himself wears the ambition of the next goal on his sleeve—$200 million ARR. 

“It’s a lot of work but if you did 25 percent [growth] for three-and-a-half years, you’re at $200 million, right? It’s just straight math.”

Having now led the company for a decade, Waitman also indicated there is still “a lot of the world to play out,” referencing Assent’s lack of presence in Asian countries with large complex manufacturers like Japan, South Korea, and China.

“I think we’ll have 20 percent [growth] this year, […] it’s a lot of work to push into 20 to 25 and it depends on where your actual market dynamics are,” Waitman said. “Our market dynamics are okay, there’s not like crazy tailwinds.”

“The headwinds are tough, but they’re not insurmountable,” Waitman added. “So I think we’re in a reasonably good place.” 

Feature image courtesy Assent.

The post “It’s just straight math”: Assent CEO Andrew Waitman sets bar higher after hitting centaur status first appeared on BetaKit.

Boundless Accelerator, formerly known as Innovation Guelph, has launched a new cleantech fund aimed at supporting businesses developing clean technologies in southern Ontario.

The Southern Ontario Environmental Impact Fund (SOEIF) received a $5.2-million investment from the federal government Wednesday. The federal investment was made through FedDev Ontario, the regional development agency for southern Ontario. 

The SOEIF will consist of two programs, including what the federal government described in a statement as a “revised cohort” of the i.d.e.a. Fund, as well as a new Sustainable Impact Program. 

The i.d.e.a. Fund will offer companies access to business support and seed funding to develop or re-design green products, services, and technologies to reduce their environmental footprint.

Since its launch in 2022, the i.d.e.a. Fund claims to have supported approximately 245 businesses and helped to commercialize nearly 480 products. According to the i.d.e.a. Fund’s website, the program has already completed two cohorts and plans to accept 145 companies in its third and fourth cohorts.

RELATED: MKB raises $145 million for third cleantech fund mostly from government agencies

The i.d.e.a Fund will be co-delivered by Boundless Accelerator and five other regional innovation centres in the region, including Innovation Factory, Innovate Niagara, LaunchLab, TechAlliance of Southwestern Ontario, and WEtech Alliance. BetaKit reached out to the federal government for more information but did not receive details by press time. 

The second component of the SOEIF is the soon-to-be-launched Sustainable Impact Program, which will see Boundless Accelerator work with partner organizations that are targeting innovations to reduce their environmental impact. This program is also aimed at supporting scale-ups with their commercialization activities and helping them become export and investor-ready. 

“By working closely with our regional innovation centre and university partners, the i.d.e.a. Fund and the new Sustainable Impact Program will provide vital resources and support to businesses committed to making a positive environmental impact,” Alison Crumblehulme, CEO of Boundless Accelerator, said in a statement. 

Featured image courtesy Unsplash. Photo by Colin Watts.

The post Fed issues $5.2-million investment to boost southern Ontario cleantech first appeared on BetaKit.

Toronto-based venture capital (VC) firm Northside Ventures has closed its inaugural fund, hitting its $15-million CAD ($11 million USD) target last month despite tough market conditions.

Northside’s Fund I LPs consist of a mix of institutional investors, funds-of-funds, corporate VC arms, other VC funds, family offices, and experienced tech founders and operators. The group includes Inovia Capital, Bain Capital Ventures, Intact Ventures, Notable Capital, Golden Ventures, FJ Labs, Bling Capital, Coolwater Capital, and Garage Capital among others.

The VC firm also counts more than 50 individuals from companies like Google, Uber, Affirm, Deel, Rippling, Wave, and PointClickCare among its LPs, such as former Wave Financial and now GoConfirm head Kirk Simpson, ex-PayBright and current Affirm leader Wayne Pommen, Uber senior vice president Andrew Macdonald, and Kindred co-founder George Babu.

“We’re building Northside to scale, but we invest, from a founders’ perspective, like an angel investor.”

Founded last year by solo general partner (GP) Alex McIsaac, a former Canadian partner at Germany’s Global Founders Capital, Northside targets Canadian founders at the earliest stages, where McIsaac said a lack of institutional capital exists. “There are obviously a few funds that do it, but just not enough,” McIsaac told BetaKit in an exclusive interview.

“That true pre-seed cheque that comes before the Golden Ventures invest is still pretty hard to find for founders, and so that’s the gap that I’m trying to fill,” McIsaac added.

Northside backs startups based in Canada or the United States that have at least one founder with a strong connection to Canada and a focus on artificial intelligence, vertical SaaS, FinTech, or cleantech. The VC firm aims to participate in its first round of external funding, often at inception and ideation, with initial investments of between $100,000 and $500,000 at the pre-seed and seed stages.

To date, Northside has deployed about 40 percent of its fund across 15 investments, backing a group that includes Datacurve, Switch, Terminal, and Veritree, among others. Two-thirds of its existing portfolio consists of Canadian companies, while the remainder is Canadian founders building south of the border. The VC firm plans to make another 15 to 20 investments over the next one to two years, at least half of which will be in startups based in Canada.

According to McIsaac, Northside hopes to differentiate itself with what he described as an “institutional angel investor” approach that combines the best of both worlds from his time working at startups and as an early-stage investor at three other large institutional funds with Northwater Capital, BDC Capital, and Global Founders Capital. He said this involves building Northside into an “institutional-grade” fund with a “founder-friendly approach.”

“We’re building Northside to scale, but we invest, from a founders’ perspective, like an angel investor,” McIsaac said. “We invest with agility, we can make decisions quickly.”

Inovia, one of Northside’s two largest LPs alongside Intact, backed the firm through its $34-million Discovery Fund for early-stage VCs. Inovia Discovery Program vice-president Prem Kalevar told BetaKit that McIsaac has built a relationship with the Inovia team over many years and has collaborated on investments.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

“His relentless hustle and speed of execution stood out to us, and he continues that nimble execution with Northside Ventures’ first fund,” he said.

McIsaac began working in tech as an associate at Northwater Capital focused on cleantech investing, before joining Northwater-incubated, Toronto-based energy storage tech startup NRStor as its first employee, where he led business development for seven years until around when the company was acquired by Blackstone. In 2019, he joined BDC Capital, where he spent a year as a principal on its Women in Technology Venture Fund and Seed Fund.

He left BDC Capital and joined Global Founders Capital as its first and only Canadian partner in February 2020, and spent the next three years building out and leading its operations in Canada, investing close to $40 million across 30 Canadian startups over three years, including AutoLeap, Aviron, Clutch, Disco, Float, Ledn, Pine, Secoda, Shakudo, and Wombo.

As BetaKit previously reported, McIsaac left Global Founders Capital in late 2022, handed over its Canadian portfolio to the VC firm’s European investment team, and launched Northside, securing a first close of $5 million in February 2023 and a second close that summer, which brought its total to $6.25 million of its $15-million target.

RELATED: Ex-Global Founders Capital partner launches Northside Ventures to back pre-seed Canadian entrepreneurs across North America

Since then, McIsaac has been working on closing the remainder amid what has become the worst fundraising environment for Canadian VC in the past decade, especially for emerging managers. McIsaac said it was tough raising a fund amid these conditions and the firm prepared for a long process from the outset, and received “lots of no’s” along the way.

During Northside’s 18-month fundraising process, McIsaac said he connected with more than 700 prospective LPs, ultimately securing 77 commitments from this group, while another 200 expressed interest in investing in Northside’s future funds. “It wasn’t easy,” he added.

“[McIsaac’s] relentless hustle and speed of execution stood out to us, and he continues that nimble execution with Northside Ventures’ first fund.”

Prem Kalevar, Inovia

As BetaKit has previously reported, LPs have become more cautious and selective amid the downturn, which has led to smaller funds and longer fundraising timelines for Canadian VC firms.

According to McIsaac, most LPs who passed on Northside did so because they didn’t have the liquidity, weren’t interested in early-stage VC as an asset class, or didn’t make Fund I investments. This meant smaller cheques and more conversations for Northside. 

Northside recently brought on a number of undisclosed family offices, founders, and operators as LPs. McIsaac said he found that the family offices were more open to joining in subsequent closings after the VC firm had secured sizeable commitments from other players.

McIsaac’s strategy ultimately proved fruitful as the firm was able to meet its target. For his part, Kalevar credited McIsaac’s structure and discipline, noting he “applies a very structured process to everything he does, and is extremely disciplined with his time and execution.” 

“It’s been a lot of work, but it feels really rewarding now being at the end of the fundraising journey, but the start of the bigger journey in terms of investing and building a lasting firm,” McIsaac said.

Feature image courtesy Northside Ventures.

The post Northside Ventures closes first early-stage VC fund at $15 million CAD first appeared on BetaKit.

London, Ont.-based healthtech startup Deep Breathe, which develops artificial intelligence (AI)-powered ultrasound diagnostics systems, has taken first place at xTechInternational 2024, an international competition hosted by the United States (US) Army. The competition invites companies to showcase the potential military applications of their technologies. 

This year’s competition attracted more than 100 applicants across various industries and academic institutions, culminating in an in-person pitch competition held in Madrid, Spain last month. As one of 12 finalists, Deep Breathe presented their offering to a panel of military technology experts and took home the top prize of $95,000. 

Founded in 2021, Deep Breathe says its solution uses deep learning algorithms to interpret portable ultrasound images of the lungs, which can impact patient outcomes in time-sensitive settings. In a statement, the startup said that winning xTechInternational positions itself as a promising strategic partner for future military and healthcare procurement initiatives.

RELATED: Three Canadian companies among finalists of Musk-funded XPRIZE Carbon Removal competition

“This recognition from the US Army is a testament to our team’s dedication and the transformative potential of our technology,” Deep Breathe founder and CEO Dr. Rob Arntfield said in a statement. 

xTechInternational 2024 opened up applications for small-to-medium businesses or international academic and research institutions not based in the US earlier this year. The competition was seeking companies working on quantum sensing, food production methods, and AI uses in decision-making. 

The first phase of the competition awarded  $5,000 to 24 semi-finalists for their concept white papers in March. The second phase awarded  $10,000 to 12 finalists for their performance in a virtual pitch competition held in May. 

xTechInternational said that, in addition to non-dilutive cash prizes, finalists were entered into the xTech Accelerator to receive mentorship and access to networking events that can help grow their companies for the US Department of Defense and commercial use.

Feature image courtesy Deep Breathe via LinkedIn.

The post Canadian healthtech company Deep Breathe bags top prize at US Army’s xTechInternational 2024 first appeared on BetaKit.

Toronto-based Bitcoin mining company Bitfarms and activist investor Riot Platforms continue to trade public blows leading up to an October shareholder meeting that could determine the company’s future. 

In a statement released early this week, Riot warned that Bitfarms’ board “should not enter into any financing transaction” prior to the completion of the special meeting with shareholders set to take place on Oct. 29. 

Riot said it “will not hesitate to hold the incumbent directors personally accountable.” 

Bitfarms pushed back, releasing a statement sent on Wednesday against what they called “public attacks and actions” meant to harm the interest of other Bifarms shareholders. 

The companies have been duelling since Bitfarms rebuffed Riot’s $950 million takeover offer in April, leading to Riot issuing public statements questioning the competency of Bitfarms’ leadership and steadily increasing its stake in the company. In response, Bitfarms has adopted various ‘poison pill’ plans meant to discourage a greater ownership share.

The latest public war of words follows Bitfarms entering an agreement to acquire American firm Stronghold Digital Mining in a $125-million USD stock-for-stock merger deal, plus the assumption of $50-million USD in debt. Stronghold is a vertically integrated Bitcoin mining company, placing its Bitcoin mining rigs at its wholly-owned power plants in Pennsylvania. 

Bitfarms CEO Ben Gagnon said discussions had been ongoing for the past three years, touting Stronghold’s ability to increase Bitfarms’ power capacity, as well as the potential to diversify its offerings and use the sites in high-performance computing (HPC) and artificial intelligence (AI) applications. Bitcoin mining, HPC, and AI are notorious for requiring significant amounts of energy. 

In an open letter sent out this week, Riot said shareholders “should seriously question” the timing of the acquisition announcement, pointing to the deal valuing Stronghold at a more than 100 percent premium on its closing price the previous day. 

The transaction will see Stronghold shareholders receive 2.52 shares of Bitfarms for each owned share of Stronghold, an approximate consideration of $6.02 USD per share. Stronghold shareholders are expected to own just under 10 percent of the combined company when the transaction closes. 

In an email to BetaKit, Andreas Park, a University of Toronto professor of finance, said the transaction was “unlikely” to be a snap decision amidst Bitfarms’ dispute with Riot. 

“One possibility is that Bitfarms rejected Riot’s offer because such a takeover would jeopardize the Stronghold merger,” Park said. He added that it’s also possible Riot submitted its takeover offer to learn more about the merger during the negotiation process. Park added that the Stronghold merger means it’s likely Riot now needs more capital to complete a takeover of Bitfarms. 

In response to Riot steadily increasing its stake, Bitfarms adopted a ‘poison pill’ plan that would automatically issue new shares when a “creeping bid” accumulated more than 15 percent of Bitfarms common shares. That original poison pill was struck down by the Ontario Capital Markets Tribunal, forcing Bitfarms to change the trigger to 20 percent. Following the adoption of the new poison pill, Riot now holds 19.9 percent of the company.

RELATED: Targeted by activist investor, Bitfarms chairman and co-founder Nicolas Bonta steps down

The months-long saga has seen Bitfarms appoint Gagnon as CEO in July and appoint him to the board after co-founder and former chairman Nicolas Bonta stepped down in August. Riot has been looking to oust Bitfarms’ leadership, including Bonta, and install its own. Riot called the executive changes a “step in the right direction” in its recent open letter, but called for further changes and for Bitfarms to “halt its defensive tactics and let shareholders be heard” leading up to the Oct. 29 shareholder. 

“Riot is deeply concerned that any transaction the current Bitfarms Board will pursue will be punitively dilutive to all Bitfarms’ shareholders when there are other more attractive financing options available,” the statement reads. “If the Bitfarms Board insists on taking any such action to further entrench itself at the expense of shareholders, Riot will not hesitate to hold the incumbent directors personally accountable.” 

In a response, Bitfarms said Riot has “declined to engage” constructively and that the board and leadership changes were made “to ensure the right team is in place” and “not for Riot’s benefit and approval.”

“The upcoming special meeting is not about corporate governance, as Riot has repeatedly positioned it to be, but rather about Riot attempting to acquire Bitfarms at a discounted price for the benefit of Riot shareholders, not Bitfarms shareholders,” the statement read. 

Bitfarms trades on the Toronto Stock Exchange and the Nasdaq under the symbol “BITF.”

Feature image courtesy Michael Fousert via Unsplash.  

The post Bitfarms and Riot continue public squabble leading up to October shareholder meeting first appeared on BetaKit.

Safe Superintelligence (SSI), the startup launched just three months ago by Canadian OpenAI co-founder Ilya Sutskever, has closed $1 billion USD in funding.  

SSI confirmed the fundraising in an update on its website, which noted investors included NFDG, Andreessen Horowitz, Sequoia Capital, DST Global, and SV Angel. Notably, NFDG is an investment partnership run by former GitHub CEO Nat Friedman and SSI’s CEO and co-founder Daniel Gross.

As first reported by Reuters, this deal values the startup, which is looking to develop a lab for safe artificial intelligence (AI) development, at $5 billion USD, though SSI declined to disclose its valuation to Reuters.

Per Reuters, SSI will use the proceeds to purchase compute power, as well as scale its currently 10-person team. The company plans to split its researchers and engineers between Silicon Valley and Tel Aviv, Israel.

Many AI startups remain unprofitable due to the immense costs of training their models, and many have focused on raising venture capital to acquire the necessary compute to scale their models and accelerate product development. This high cost of compute is pushing some startups to consider selling to or merging with larger companies. Canadian AI giant Cohere has closed several large rounds of financing in a bid to increase its computational capacity.

RELATED: Cohere’s Ivan Zhang on making Canada the place to scale

SSI launched publicly in June of this year. In addition to Sutskever, SSI is also founded by principal scientist Daniel Levy, a former technical staff member at OpenAI, and CEO Gross, Apple’s former AI lead. According to Sutskever’s LinkedIn, he will serve as both co-founder and chief scientist at SSI.

While SSI is an American company, Sutskever is a Canadian citizen who studied under AI godfather Geoffrey Hinton while attending the University of Toronto. Sutskever also built AlexNet, a neural network focused on image processing, in partnership with Hinton and Alex Krizhevsky. AlexNet sold to Google in 2013.

Sutskever was one of several high-ranking employees at OpenAI who left the company following internal concerns that the ChatGPT creator was incapable of handling the safety risk of AI. 

Developing AI safely is the core focus of SSI. On its website, the startup bills itself as a safety-first organization, noting it wants to “advance capabilities as fast as possible while making sure our safety always remains ahead.”

The post Canadian Ilya Sutskever’s Safe Superintelligence closes $1 billion USD in funding first appeared on BetaKit.

Toronto-based Wombo, which has gained popularity for its ability to turn selfies into videos of users lip-syncing to popular songs, has announced approximately $12.2 million CAD ($9 million USD) in funding to launch more generative artificial intelligence (AI) entertainment products.

The all-equity round was led by an existing backer, Round13 Capital’s Digital Asset Fund (Round13 DAF), with participation from a slew of new investors, including chip giant Nvidia, AI cloud provider CoreWeave, SBI, and Web3.com. Wombo plans to use this capital to expand its 10-person team, accelerate its product development efforts, and “explore new frontiers in AI-powered content creation.”

In the less than four years since the consumer AI startup’s launch, Wombo’s apps—which today include viral text-to-image generator Wombo Dream and selfie-to-political meme creation tool Wombo Meme—have collectively surpassed more than 200 million downloads. 

Wombo’s apps, which today include Dream and Meme, have collectively surpassed more than 200 million downloads. 

But despite the company’s traction and investor excitement about the promise of generative AI, the past few years have not all been smooth sailing for Wombo, which founder and CEO Ben-Zion Benkhin said entered ‘cockroach mode’ and began focusing on survival back in 2022 after a collapsed financing, shut down its original app due to copyright issues last year, and recently dodged a proposed class-action lawsuit alleging it violated privacy law.

With the changes Wombo made during this time and fresh funding fully closed, the startup’s outlook is a bit different now. “The company is profitable, this new investment round took place, and new and exciting things [are] on the horizon,” Benkhin told BetaKit in an interview.

Round13 DAF managing partner Khaled Verjee told BetaKit that he has “been very impressed with the team’s ability to execute, ship product on time, and consistently deliver high-quality, user-friendly applications which attract a strong and sticky user base.”

Benkhin said Wombo’s latest funding round closed earlier this year, but declined to share when exactly, whether it included any secondary capital, or disclose what valuation it gave the company. Wombo is not classifying this round, which brings the company’s total funding to more than $15 million USD. Benkhin noted that it “didn’t neatly fit what we imagined a seed or Series A might be.”

Wombo’s last publicly announced funding was a $6-million USD seed round it secured shortly after its launch in 2021 from ​​Global Founders Capital, Ashton Kutcher’s Sound Ventures, the CEOs of Product Hunt and Machine Zone, Launch House, and Germany’s 468 Capital. That round valued Wombo at $40 million USD.

In March 2021, Wombo launched its first, self-titled app, which used AI to create lip-sync videos from user selfies. That October, Wombo rolled out its text-to-image generator Wombo Dream. Both took off, garnering more than 100 million downloads combined that year, and Google anointed Wombo Dream its best app of 2022 in the United States.

RELATED: Viggle closes $26-million CAD Series A to expand AI-powered video generator

On the heels of this rapid growth, in March 2022, Wombo thought it had closed another funding round. But according to Benkhin, the lead of that deal, which he declined to disclose, pulled out after two months of due diligence and the financing fell apart, right as tech market conditions were beginning to deteriorate.

The timing was unfortunate for Wombo, which Benkhin said was left with “essentially negative runway” since its app was going viral and it had a “million-dollar server bill” to foot as it faced down a more challenging fundraising environment. “We literally had no money,” he added.

“The market conditions were definitely a big factor,” said Benkhin. “Look, they got spooked … I don’t hate them for it. It probably would have been easier for my life if they didn’t do it, but sh-t happens, we move on, we live to see another day.”

Since then, Benkhin claimed that Wombo has dug itself out of that hole. Between 2022 and the end of 2023, Benkhin said Wombo set its sights on trying to survive and reach profitability. Two years ago, Verjee said Wombo closed a small bridge round that brought on Round13 DAF as an investor.

RELATED: Round13 Digital Asset Fund claims over 40 percent gains despite tough crypto market

According to Benkhin, during this period, Wombo did not conduct any layoffs for the purposes of cutting costs, but the startup did reduce its spending, boost its revenue by rolling out premium tiers and advertising for its up to that point largely free apps, and became profitable this year. “Luckily, we had ample room, ample product space with which to monetize,” he said.

“Ben-Zion is incredibly resilient and has shown amazing grit as a CEO through some pretty difficult times,” former Global Founders Capital partner Alex McIsaac—now of Northside Ventures—told BetaKit. “I’ve been very impressed since I invested at seed.”

In 2023, Wombo launched Wombo Meme and shut down its original app due to copyright issues. Copyright law poses a threat to Wombo and other AI companies, including fellow Toronto startups such as Viggle, Ideogram, and Cohere. Artists, musicians, writers, and others have claimed infringement based on content generated by AI, while companies training their AI systems using images, written material, and other data scraped from the internet have been operating in a legal grey area.

Asked how Wombo is navigating the potential for its tech to facilitate copyright infringement, Benkhin said, “We’re not pirates. We’re not in the business or philosophy of infringing, and so our intention is to do things in a legally compliant way.”

RELATED: Midjourney competitor Ideogram closes $80-million Series A, launches latest text-to-image model

To date, Wombo has amassed a big user base as a fun tool for messing around on the internet, but the tech underlying AI-generated images and videos, also called deepfakes, can also be dangerous. At its worst, it can be used to power misinformation (including of the political kind), non-consensual pornography, and scams. 

It also raises other concerns. This summer, Wombo became the subject of a class-action lawsuit claiming its apps collected and shared Illinois users’ face scans without consent. BetaKit has reached out to Wombo for comment regarding this. On September 9, following the publication of this story, this lawsuit was dismissed.

Amid what has become a competitive consumer AI space, Benkhin views Wombo’s “hits-driven approach” as a differentiator, and at minimum, a viable short-term strategy. “Creativity is the edge, and you need to be fresh and new, and coming up with interesting new concepts that people like,” he added, noting that the startup wants to make “a few hits a year.”

“Ben-Zion is incredibly resilient and has shown amazing grit as a CEO through some pretty difficult times.”

Alex McIsaac

Verjee said that having compute providers Nvidia and CoreWeave as investors gives Wombo access to “a tremendous amount of knowledge, know-how, and access to cutting-edge resources which would not otherwise be available” as it looks to execute on these goals. 

For his part, Benkhin noted that Wombo has a “rich technical and business collaboration with both companies” but declined to elaborate further.

Benkhin’s vision for Wombo also involves investing in research and development for “w.ai,” a project aimed at creating “the world’s largest AI supercomputer.” With w.ai, Wombo hopes to turn idle smart devices, such as MacBooks, smartphones, and PlayStations, into AI workers. The startup hopes to allow users to contribute computing power and earn rewards. Verjee noted that w.ai aims to do this with the help of Web3 infrastructure.

How this might work in practice remains unclear, as does how exactly what Wombo is doing connects with the world of cryptocurrency. Speaking to Round13 DAF and Web3.com’s involvement, Benkhin noted that while there is not currently any crypto in Wombo’s existing offerings, the company is “forward-thinking” when it comes to Web3. 

“Crypto, we’ve always kept an open mind to, and said that when and if it makes sense, we will bring this to our products and to our users,” Benkhin said.

Feature image courtesy Kate Dockeray.

The post Round13, Nvidia-backed Wombo announces $12.2-million CAD to launch more generative AI apps first appeared on BetaKit.

When planes land in snowy conditions at Chicago’s O’Hare International Airport, they are guided by a machine learning system that makes sure they are positioned within two meters of a specific point 99 percent of the time, a process that requires the highest possible degree of accuracy and security.

The system was built using a complex application of AI and blockchain and is now used in some of the world’s busiest airports.

It was created by two founders based in Hamilton, Ontario. “We did an aviation tracking project and no one really knew,” said Colin Gagich, co-founder and CEO of Inference Labs. “Canadian Web3 tech is highly undervalued. We’re like a sleeper cell no one knows about.”

BetaKit Talks: You Don’t Know Crypto, will take place on Sept. 24, in partnership with WonderFi, which hopes to engage a broader audience with the innovations of Canadian tech that are being built “on-chain.”

“There’s so much important work being done by Canadian companies right now that is highly relevant to conversations about security, privacy and AI.”

Dean Skurka
WonderFi CEO

“There’s so much important work being done by Canadian companies right now that is highly relevant to conversations about security, privacy and AI,” said WonderFi CEO and president Dean Skurka. “We want to create an opportunity to talk about these innovations in a way that’s accessible and engaging to those who may work outside of crypto, so the entire ecosystem can benefit.”

WonderFi is the parent company of two crypto trading platforms, Bitbuy and Coinsquare, and describes itself as the Canadian gateway to crypto. Its innovation and development arm, WonderFi Labs, is focused on decentralized technologies and their future applications.

Skurka believes Canadian Web3 innovations should be top-of-mind for all startup CEOs, investors, government and corporate leaders, and the event will showcase insights and impactful technology from companies including Inference Labs, Figment, Jackal Labs, and Noble.

Jelena Djuric, CEO and co-founder of Noble, said that few people understand the unique history of Web3 in Canada and how it has created a valuable concentration of talent and innovation.

Most notable, she said, is Canada’s connection to Ethereum, conceived by Toronto’s Vitalik Buterin with philosophical intentions that extend beyond cryptocurrency.

“So many prominent builders started in Toronto because of the Ethereum connection,” said Djuric. “A lot of those folks had a lot of good ideas that blossomed.”

Shana Derman, of blockchain infrastructure provider Figment, believes that issues of trust and security should be prompting all Canadian business leaders to focus on blockchain and Web3 work “It’s a security environment. It’s a safety mechanism,” she said. “Blockchain is the backbone of everything that’s trustworthy.”

Like many founders and builders across the wider Canadian technology sector, founders working within the Web3 space do not feel as though their innovations are widely understood or appreciated. And that environment is casting the future of Canadian Web3 into doubt.

“It’s a risk framework to stay in Canada right now,” said Patrick Dunlop, co-founder and CEO of Jackal Labs. “Companies are building things that are delivering value. But we don’t have a regulatory framework and we’re being pushed outside.”

At Inference Labs, Gagich said their work is motivated by a desire to ensure AI is developed and applied while protecting privacy and individual rights; something he wishes was more prominent in conversation around the technology. “We’re trying to build this alternative business model for tech companies and that conversation is relevant to lots of people,” he said. “I can’t even find a Canadian lawyer who can tell us how to do our taxes. The person who needs to hear this obviously hasn’t heard it.”

BetaKit Talks events are designed to engage the tech community in relevant in-person conversations, and to connect leaders from across sectors to explore the benefits, challenges and opportunities facing Canadian tech. 

For Skurka, the “You Don’t Know Crypto” event is a chance for WonderFi to encourage collaboration, mentorship and community within the sector, and to connect other business leaders with ideas about what’s possible.

“WonderFi is committed to being at the forefront of crypto and Web3 innovation for Canadians. It is crucial for industry leaders to not only acknowledge but actively embrace the innovative on-chain developments happening today,” said Skurka. “This is precisely why we are thrilled to partner with BetaKit in hosting this pivotal event, aimed at fostering greater understanding and collaboration in this transformative space.”

Register to attend BetaKit Talks: You Don’t Know Crypto, presented by WonderFi.

The post The most important work in tech is happening on-chain first appeared on BetaKit.

Seven months after taking over C100, Michael Buhr has set some ambitious new goals for the organization: by 2030, he wants the non-profit member association to help 100 companies reach $100 million USD in revenue, and at least 10 of them crack the $1-billion mark.

C100 aims to help 100 Canadian tech startups reach $100 million in revenue, and 10 crack $1 billion by 2030.

In an exclusive interview with BetaKit, Buhr laid out his plans for C100 in more detail, which include expanding beyond just early-stage Canadian tech startups through new programs and events, a renewed focus on connecting those companies to Silicon Valley, and greater attention on core markets.

Since 2009, C100 has connected Canadian technology entrepreneurs with industry leaders in Silicon Valley and around the world. Buhr, a Silicon Valley veteran, became executive director of C100 earlier this year, replacing Ray Newal after only a year and a half as C100’s CEO.

Today, C100 unveiled the first participants in its new Growth Program for later-stage Canadian technology companies and the latest selections for its longstanding, slightly revamped Fellows Program for early-stage startups for 2024–2025.

The organization has chosen 12 companies for the first cohort of its newly launched Growth Program, including Arteria, e-Zinc, Humi, My01, Relay, and RetiSpec, among others. C100 has also selected 26 businesses for the next edition of its 15-year-old Fellows Program, making this cohort—which features startups like Blanka, CruxOCM, Cybrid, Friendlier, Kento Health, and Unified.to—its largest ever.

Buhr said he has been “pleasantly jazzed” by the quality of the companies that applied to C100’s latest Fellows Program and first Growth Program. He claimed that the revenue, talent, and overall strength of this year’s applicants were higher than usual. “I think that’s just a great sign for Canada overall on the tech side,” he added.

C100 aims to help Canadian tech entrepreneurs build and scale global businesses by connecting them with the expertise, networks, and resources of its Silicon Valley and worldwide membership through programming and events, including its annual Summit. 

In recent years, C100 has focused some of its efforts on opening new chapters globally. Under Buhr’s leadership, C100 has returned to connecting Canadians with Silicon Valley. 

RELATED: C100 launches new Growth Program to support later-stage companies

The non-profit association’s initial target was helping early-stage Canadian-led startups address early-stage startup issues. Since then, Buhr has noted that other organizations have emerged to fill this gap, and many C100 members have built large, successful Canadian tech companies and expressed interest in giving back.

C100 has also recently begun providing more support to later-stage businesses and connecting folks in its network who have been there before with the next generation of scaling startups. During Buhr’s tenure, the organization has expanded beyond its early-stage roots with the launch of its new Growth Program, which serves scaling firms with between $10 million and $50 million in annual revenue, and previously unannounced Leaders Circle.

C100 has brought over two experienced scaleup support leaders to head its Growth Program, Conor McCargar and Geoff Baum. McCargar and Baum previously helped deliver Kitchener-Waterloo’s Laziridis Scale-Up Program, which supported 726 Canadian tech leaders across more than 70 scaling businesses between 2016 and 2023.

Leaders Circle is a peer group of undisclosed Canadian tech CEOs leading companies with more than $100 million in revenue that C100 decided to launch at Summit following feedback. Buhr said C100 realized it could help entrepreneurs in this group by serving as a “forcing function” to bring them together three times per year and connect them with members who have been through the same challenges associated with running a company at this scale, which can include raising private equity, going public, and conducting secondary offerings.

The latest edition of C100’s Fellows Program will have 1:1 mentoring and an additional 48 hours in Silicon Valley built-in, two programming tweaks that Buhr believes will increase its effectiveness. C100 usually chooses 20 companies for the initiative but landed on 26 this time around, which Buhr chalked up to the quality of the candidates.

With just over seven months at C100 now under his belt, Buhr said he has gained a better understanding of what was and was not working with C100 from its board and constituents and refined his vision for the organization’s future.

“We cannot do that alone,” he said regarding C100’s big new targets. To help the member association accomplish them, C100 plans to increase its engagement with other organizations across Canada and find more ways to collaborate.

As to what C100 plans to do on its own, Buhr noted that C100 currently offers three programs: Fellows, Growth, and Leaders Circle. “This year is about executing on these programs,” he said. Beginning next year, he noted that C100 plans to take a deeper look into where else it could expand with new offerings or go deeper through existing programs.

RELATED: C100 hires Michael Buhr as next leader with Ray Newal out as CEO

For instance, Buhr sees a gap in the organization’s existing programming for businesses generating between $50 million and $100 million in annual revenue, and wonders whether it might also make sense to launch a billion-dollar group. “We’re starting to think about that now,” he said.

Scaling its existing programs might also be a path that C100 pursues. Buhr highlighted that C100 selected 38 companies from the pool of hundreds that applied to its latest programs, indicating that the organization would love to find a way to cater to even more down the road. “We’d love to support twice as many, four times as many,” he added.

Going forward, C100 plans to base its in-person events and programming in a few key locations: the San Francisco Bay Area, Toronto, the Greater Toronto Area, and Kitchener-Waterloo, bringing in Canadian tech founders and businesses from elsewhere. 

Buhr said this is because these cities feature “the highest concentration” of C100 members, entrepreneurs, and companies. “We might do some events elsewhere in Canada, but it’s more cost-effective for us to be in one central place,” he added.

Feature image courtesy C100.

The post Executive director Michael Buhr wants C100 to help Canadian tech startups scale first appeared on BetaKit.

Six Canadian universities have landed spots in Pitchbook’s recent Top 100 list of post-secondary institutions that produced the most founders at the undergraduate level.

The University of Waterloo topped the list of  Canadian universities and ranked 21st globally for the third year in a row. McGill and the University of Toronto (U of T) followed, ranking 23rd  and 25th, respectively. The University of British Columbia (UBC) made the top 50, coming in the 43rd spot, while Queen’s University landed at 69th. Western University came in last among Canadian universities at 96th. 

In the third spot among Canadian universities, U of T alumni have collectively raised the most capital.

PitchBook ranks universities based on the number of founders it produced and companies that secured a round of venture financing between Jan. 1, 2013 and Aug. 1, 2024. The research platform pulls from its own data on global venture capital investments and the educational information of nearly 167,000 founders. Because there can be multiple founders at a company and founders can attend multiple schools, it is possible that founders and businesses can count towards multiple universities.

In the past decade, Waterloo has educated 562 founders who have collectively raised $20 billion, according to PitchBook (all numbers USD). By capital raised, the top five companies created by its alumni include Databricks ($4.2 billion), Instacart ($2.7 billion), Blend ($1.2 billion), Clearco ($995 million), and Kuaidi Dache ($700 million).

McGill is just behind Waterloo, producing 558 founders that have collectively raised $19.9 billion over the same timeframe. The top five companies founded by the Montréal-based university’s alumni are Indigo ($2 billion), Clearco, Vice Media ($900 million), Sana Biotechnology ($865 million), and Generate: Biomedicines ($693 million).

In the third spot with 531 founders among Canadian universities, U of T alumni have collectively raised the most capital at $26.3 billion. The top five companies include OpenAI ($10.3 billion), Databricks, Cohere ($940 million), Wealthsimple ($876 million), and Amber Group ($630 million).

UBC has 367 alumni who went on to start companies that collectively raised $5.6 billion. The top five are Securonix ($1.2 billion), Koho ($409 million), Shopline ($206 million), Crispr Therapeutics ($160 million), and 17Live ($160 million). 

Queen’s has produced 272 founders over the past decade, raising a collective $8.3 billion. The top companies created by its undergrads are Tabby ($1.1 billion), Clearco, Cityblock ($886 million), Apeel ($665 million), and InSilico Medicine ($426 million). 

Western’s 194 alumni together have raised $2.4 billion and top companies include Flexiti ($424 million), Turnstone Biologics ($295 million), League ($206 million), HiberCell ($175 million), and Maple ($85 million). 

Last year, Waterloo, U of T, and UBC made a list of the top 25 highest-ranked computer science universities globally. In another ranking, accelerators at McGill and U of T were named among the top 10 best worldwide.

Feature image courtesy X.

The post Six Canadian universities among PitchBook’s 2024 top 100 schools for founders first appeared on BetaKit.

Eight years after making waves in the wearables market with Recon Instruments, Hamid Abdollahi is back with something new. 

A co-founder at Recon, which developed smart glasses and wearable displays for athletes, Abdollahi served as the company’s chief technology officer. Earlier this summer, his latest venture, Vancouver-based Matt3r, introduced K3y—a device that turns cameras in Tesla vehicles into a smart dashcam system that captures every honk and hard brake to make those events instantly accessible on the driver’s smartphone.

“Going back to 2008, sitting in a grad school lab thinking about starting a business, I never thought that our small company was going to have such an impact.”

K3y marks the first step in Matt3r’s mission to improve the safety of autonomous driving systems.

The startup wants to use data from these events on the road, as well as artificial intelligence (AI), to accelerate advancements in self-driving technology.

Abdollahi, no stranger to Vancouver’s tech scene, has turned his attention from wearables to autonomous vehicles nearly a decade after exiting his first company.

BetaKit spoke with the CEO and founder about his transition from wearables to autonomous vehicles, the technology behind Matt3r, and his vision for the startup.

From goggles to gears

Abdollahi’s entrepreneurial journey started at the University of British Columbia’s Sauder School of Business. It was there he began an integrated master of business administration project with Dan Eisenhardt, Fraser Hall, and Darcy Hughes to develop the concept of integrating heads-up displays (HUD) into sports eyewear, allowing athletes to access real-time data during their activities.

“Going back to 2008, sitting in a grad school lab thinking about starting a business, I never thought that our small company was going to have such an impact,” Abdollahi told BetaKit.

Recon’s first HUD offering was released in 2010, over a year before Google introduced its now-discontinued Google Glass. The product, which displayed information like speed, altitude, and location, established Recon as one of the first movers in wearable tech for athletes.

As Recon grew, the company expanded its product line to include the Recon Jet, a HUD designed for cyclists and runners. The journey culminated in 2015 when Intel acquired the company for an undisclosed sum. Two years later, Intel shuttered its Recon Instruments division as part of a broader pullback from the wearables market. Recon reportedly had roughly 100 employees at the time.

Recon might have been done, but its founders were not.

RELATED: The untold story of Recon Instruments’ impact on the Vancouver tech scene

Eisenhardt has stayed in the wearables sector, and now leads smart swim goggle tech company Form, which closed Series A funding earlier this year. 

Hall went on to create Rhino Ventures, a Vancouver-based venture firm that has invested in several now-exited Vancouver tech companies, like Grow (acquired by ATB Financial), Thinkific (which went public on the Toronto Stock Exchange), and Askott Entertainment (acquired by FansUnite). 

Hughes later served as a limited partner at the Vancouver Founder Fund before transitioning to providing private equity to startups.

Post-Recon, Abdollahi went to work on two different ventures. The first was a Vancouver welding robotics company named Novarc Technologies, where he still serves as chairman. The second was a tech incubator for early-stage startups named Ignite Ventures. Ignite focuses on supporting teams and founders in the software, e-commerce, deeptech, and machine learning sectors. 

At Ignite, Abdollahi and a group of colleagues began working on projects involving telematics and AI-related concepts. For him, AI and computer vision architecture had deep similarities to robotics. That, combined with his existing love of smart devices, led him to start Matt3r in 2021.

“My network is related to consumer electronics, so it was very easy for me to find the right people to help me build the tech stack initially,” he said.

The team spent the early days experimenting and exploring how to extract information from real driving scenarios on the road, aiming to make that data valuable for the future development of autonomous driving systems.

The K3y to safer roads?

Autonomous driving systems are developed and refined through the use of scenarios, which are hypothetical or computer-simulated situations that a self-driving car might encounter in the real world. Matt3r wants to collect data from thousands of existing passenger cars as they navigate through these real-world scenarios to help developers create safer autonomous driving systems.

Abdollahi shared an example of such a scenario that many Vancouverites will recognize: at the northern entrance to Vancouver’s Lion’s Gate Bridge, more than four lanes of traffic have to squeeze into one within just a few metres, all while dealing with a bus lane cutting through the centre lane that all other vehicles must yield to.

Data points from complex and unique road scenarios like these are what Matt3r is trying to gather, and that’s where the K3y product comes in. 

“We saw an opportunity to capture real-world information and driving data that happens on the road every day in consumer vehicles,” he said. “By abstracting useful information from those trajectories and interactions, [we want] to bring it into a format that is reusable.”

With K3y, the startup is looking to turn cameras in Tesla vehicles into smart dash cams with a USB device that can be stored in the glove box. Abdollahi said K3y is designed to act as a bridge between a vehicle’s built-in external cameras and a user’s phone.

The device records the Tesla vehicle’s external front, side, and rear cameras, offering drivers a 360-degree view of every trip.

The K3y also has built-in sensors to flag events like honks, hard braking, front collision warnings, and autopilot disengagement.

Abdollahi said being able to quickly access this sort of data could be helpful not only to drivers who want to access trip footage, but also companies that own and manage large vehicle fleets: the K3y could protect their assets and reduce the cost of insurance claims by recording driving scenarios and automating both incident reporting and evidence retrieval.

The footage collected can be accessed through Matt3r’s mobile app, Consol3. Users can tap a point in the map and select front, side, or rear view. Events are automatically flagged and users can access footage remotely when their K3y is connected to WiFi.

Abdollahi said the startup is working with third-party companies to eventually offer extra incentives to road users, such as the insurance cost savings mentioned above. The startup is also in talks for more third-party extensions of the app, which may include driver rewards. “These are all the future features that we plan to eventually bring into the K3y-Consol3 experience,” he added.

The road ahead

In recent years, the purported safety of self-driving cars has come under intense scrutiny, especially following a series of high-profile incidents involving fatalities. Earlier this year, Tesla settled a lawsuit over a 2018 car crash that killed an Apple engineer after his Model X, operating on Autopilot, swerved off a highway near San Francisco. Uber also faced backlash in 2018 after one of its self-driving cars struck and killed a pedestrian in Arizona.

Events like these have raised concerns about whether autonomous driving system developers are truly prioritizing safety in their rush to bring these systems to market.

“Safety is definitely at the top of the list of priorities for developing autonomous driving vehicles, just because of the potential things that could go wrong,” Abdollahi said.

As a result of the increased regulatory scrutiny on these systems, Matt3r is looking to eventually help regulators identify nuances and scenarios that could be crucial for issuing permits for autonomous driving system developers in different jurisdictions and operational domains.

The big vision, according to Abdollahi, is to develop software solutions that streamline R&D for companies creating these systems. Tesla vehicles might be the current target model for the K3y, but the startup hopes to eventually take the data from those devices, anonymize it, and then send it to original equipment manufacturers (OEMs) and autonomous driving system developers.

“We envision becoming one of the de facto fleet-data-as-a-service businesses that will allow autonomy developers to get the data required from different operational design domains on demand as they scale into different cities and geographies,” Abdollahi said.

RELATED: Waabi to use Nvidia chip to power autonomous trucking solution

When asked how that data is anonymized, a spokesperson for Matt3r said the tech collects and reconstructs simulation-ready scenarios, and claimed that this scenario data does not incorporate any video footage or personally identifiable information about the device’s users.

The startup, which has 15 full-time employees, primarily based in Vancouver, is in the data collection stage while piloting its technology to OEMs and system developers. The K3y is currently available for pre-order, and is scheduled to ship later this year.

Abdollahi said Matt3r is also in touch with “multiple industry players and simulation companies.” Matt3r’s spokesperson noted the startup is pleased with the interest from the Tesla community so far, and noted the company is on track to achieve its targets this year.

Matt3r is also looking to close seed financing before the end of the year to support these expansion efforts. Abdollahi noted the round will mark the startup’s first fundraise to date.

Developing autonomous driving systems comes with complex challenges that demand precise technology and reliable data. As Matt3r gears up for its next phase, Abdollahi said he is “300 percent focused” on solving this challenge with technology, which he sees as a natural progression from the work he and his co-founders started 16 years ago at Recon Instruments.

His co-founders have followed similar paths, with Eisenhardt leading Form, and Hall and Hughes continuing to back and advise Vancouver-based tech startups.

“Seeing some of the investments and companies that grew out of the team that we initially put together at Recon, and even after the exit, [realizing that] much of that experience and money has been reinvested into various projects in town, it’s a pretty amazing feeling,” Abdollahi said.

Feature image courtesy of Matt3r.

The post Recon Instruments’ co-founder wants to advance autonomous driving systems with latest venture Matt3r first appeared on BetaKit.

Québec’s venture capital ecosystem has made impressive strides over the past decade, yet it remains heavily reliant on public and para-public funding to sustain its momentum, according to a new report from Québec-based investment industry association Réseau Capital. 

The report, which traces the evolution of Québec’s venture capital industry from 2013 to 2023, aims to assess the outcomes of Québec’s long-term strategy to develop a stronger private investment sector. The report also identified potential areas for strengthening the ecosystem by analyzing its evolution over the past two decades.

In the years leading up to 2022, private sources accounted for 60 percent of venture capital fundraising, which included a mix of local, national, and international sources. However, this figure dropped to 52 percent in the 2022 to 2023 period, a shift that the report attributes to the current funding downturn.

“The sharp drop in average fund size in 2022 and, even more so, in 2023 indicates that the industry is currently facing headwinds, particularly in terms of fundraising,” the report notes.

Public and quasi-public funding sources have played a crucial role in the province’s venture landscape, particularly in early-stage financing, where private investment has become more difficult to secure.

Québec is unique among other Canadian provinces because of the comparatively large presence of funds that are either funded with tax-payer dollars, or were established by Québec’s political parties. 

Public entities such as the Business Development Bank of Canada, Investissement Québec, and workers’ funds like the Fonds de solidarité FTQ and Fondaction are some of the most active investors in the province, acting not only as limited partners (LPs) but also as direct investors in startups and later-stage ventures. 

“While other Canadian VC ecosystems also rely on public contributions … the Québec ecosystem has a larger pool of public and para-public partners,” Olivier Quenneville, CEO of Réseau Capital told BetaKit. “As it is the case everywhere, one constraint of those investments are the local reinvestment clauses that might impede the attraction of other LPs.”

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace to be worst for Canadian VC in a decade

Some members of the Québec ecosystem have previously told BetaKit that the large presence of public and para-public investors has helped create a more resilient venture capital market in Québec compared to other provinces.

“The strong public and para-public presence in Québec funds was, and still is, an important contributor to the maturation of our industry,” Quenneville added. “Moreover, when fundraising is more challenging, having those LPs around is proving beneficial to counter some of this cyclical effect.”

One sector that has particularly benefited from this support is tech. The report notes that the tech sector (which it brands as information and communications technology) is the most advanced within Québec’s venture capital ecosystem, characterized by larger funds, experienced managers, and a more diversified and internationalized pool of capital.

According to data shared in the analysis, public or para-public funding experienced a sharp decline from around 80 to 90 percent from the period of 2004 to 2012 to approximately 30 to 40 percent by the 2016 to 2021 period, where it then stabilized. From 2022 to 2023 there was a slight uptick, with the share rising modestly to about 35 to 40 percent. The report noted that the relative share of public or para-public funding “has declined, but their contribution remains significant.”

Given the continued reliance on public and semi-public funding in Québec, the report said the sector overall remains “fragile,” given there are only a handful of established managers locally.

That fragility facing Québec’s venture capital industry is currently exacerbated by the sharp decline in average fund sizes in 2022 and 2023, as well as the fact that no later-stage funds were raised in 2023. 

“These later-stage funds fill an important gap in the financing chain, which require greater capital and are often filled from funds outside of the province, most often from the United States,” the report said, noting that with the recent downturn, raising funds from private sources has grown increasingly difficult.

There are signs that 2024 will represent a turnaround for private venture funds in the province. This year, a few private venture capital and private equity firms in Québec have managed to close funds, including Amplitude Ventures, Inovia Capital, Mackinnon, Bennett & Company, Idealist Capital, and TandemLaunch. 

Feature image courtesy Unsplash. Photo by Michael Beener.

The post Report: Québec venture ecosystem still “highly dependent” on public and para-public funding first appeared on BetaKit.

Koho recently announced a new product aimed at helping tenants build credit by consistently paying rent. It’s not the first startup to offer this feature—both Borrowell and Chexy have similar offerings—but it highlights how Canadian FinTech companies fill gaps in the market left by traditional banks. Earlier this year, Beacon launched from stealth to build a financial super app for immigrants. Manzil, which has been working to provide Canadian Muslims with financial access since 2017, announced in August it has now financed more than $50 million CAD in halal mortgages.

Young Canadians and new immigrants are not well served by traditional financial institutions, according to a report by McKinsey. Digital-savvy Gen Z and millennials want flawless online access to their financials. Newcomers from Europe and countries like China and India, where using apps to bank is common, are more inclined to use tech companies for their everyday financial needs. 

For the banks to offer similar products as consumer-focused startups, Karim Gillani, general partner of FinTech investor Luge Capital, said “it’s a meaningful lift to do that in time, money, resources. And it probably wouldn’t be as good a product that’s delivered by a nimble team built on modern technologies.”

“I always tell our portfolio companies: one of their biggest assets that they have against the incumbents is speed,” he continued. “Because incumbents have a big brand, a big customer base, a huge balance sheet, decades of history … they have all of these assets that could seemingly be the thing that crush these small FinTech companies, but FinTech companies have speed, which these large incumbents don’t have.”

McKinsey says targeting the underbanked is one way Canadian FinTech companies can ensure long-term success. And to make a comeback from the lows of 2022, their silver bullet might just be speed.

Thanks for reading on and ’til next week, 

Bianca Bharti

Newsletter editor

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TOP STORIES OF THE WEEK

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Shopify taps Microsoft executive Mikhail Parakhin as its new CTO

According to his LinkedIn, Mikhail Parakhin had been with Microsoft since 2019, most recently serving as CEO of advertising and web services, with previous experience as the president of its web experiences team and its corporate vice-president of technology.

In a statement, Shopify said Parakhin led Microsoft’s artificial intelligence (AI) advancement by helping to build consumer and enterprise-facing products like Copilot. The company added that Parakhin is “one of the finest machine learning (ML) crafters on the planet” and said he will oversee its engineering and data organizations.

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Sagard hires Georgian’s Parinaz Sobhani as investment firm’s first head of AI

Parinaz Sobhani has spent the past 15 years focusing on AI in academic and industry roles. With a PhD from the University of Ottawa specializing in natural language processing, Sobhani has helped develop end-to-end neural machine translation models at Microsoft alongside time working at other research labs.

For the last seven-and-a-half years, Sobhani has worked at Georgian, a growth-stage business-to-business software investor, where she most recently served as the Toronto-based firm’s head of AI.

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Benevity appoints MeridianLink president Christopher Maloof as CEO, Kelly Schmitt steps down

Calgary-based charitable donation management software firm Benevity has announced that Christopher Maloof will be replacing outgoing CEO Kelly Schmitt on Sept. 3.

Maloof had been serving as an operating partner at prominent American software-focused private equity firm Thoma Bravo, and was also president of California-based digital lending firm MeridianLink up until this month according to his LinkedIn.

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Viggle AI closes $26-million CAD Series A to expand AI-powered video generator

Toronto-based Viggle launched its app this March, and the capabilities of its tech went viral shortly thereafter when videos began circulating online of Joaquin Phoenix’s Joker persona replacing rapper Lil Yachty’s stage entrance at the Summer Smash Festival in 2021. This turned into a trending meme format this April, when social media users began using Viggle to insert other celebrities and characters into the same video.

This helped the early-stage AI startup amass a community of more than 4.3 million members on the messaging platform Discord, and secure fresh financing from Silicon Valley’s Andreessen Horowitz and Toronto-based Two Small Fish Ventures.

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Hardbacon to file for bankruptcy after Google search changes crush affiliate business

Montréal-based FinTech startup Hardbacon, which offers a free budgeting app and generates revenue through lead generation and affiliate marketing for financial products, has shut down after seeing most of its Google traffic vanish over the past year, following some updates to the search giant’s algorithm.

Hardbacon announced in an Aug. 15 blog post that it has suspended its operations, let go of its remaining employees, and plans to declare bankruptcy “in the coming days.”

This move comes 11 months after Google implemented some updates designed to combat spam that led to a steep decline in hits to Hardbacon’s website, a blow from which the search engine optimization (SEO)-reliant company was never able to recover, co-founder and CEO Julien Brault told BetaKit in an interview.

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Happipad has only signed 31 leases since signing $1.3-million deal with Nova Scotia last August

Non-profit home sharing platform Happipad has only facilitated 31 lease signings as of Aug. 28, 2024, just over one year since it signed a $1.3-million deal with the Province of Nova Scotia, the province’s Department of Municipal Affairs and Housing told BetaKit this week.

Happipad first partnered with the Nova Scotia government in June 2023 to help people displaced by the province’s unprecedented wildfire season find housing. The province expanded the partnership in August 2023 by investing $1.3 million CAD over two years to make the platform available across the province.

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ALL IN 2024 returns to Montréal for its second year

Following the success of its inaugural event, ALL IN 2024, co-organized by SCALE AI, the Montréal International Center of Expertise in Artificial Intelligence (CEIMIA), and Mila, is back for its second year, promising to be Canada’s most significant event dedicated to artificial intelligence.

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The right Caliber for Canada

When Esha Chopra first met with the team at Caliber Interconnects, she was presented with a vast array of deep tech innovations—from autonomous mobile robots to cutting-edge semiconductor test services.

Caliber Interconnects, a deeptech engineering technology company, founded in India and headquartered in Singapore, comes with a diverse range of expertise and a global presence with a focus on hardware design, integrated circuit package and substrate design, high-density interconnect design, and silicon testing. The team was eager to launch in Canada, however, with a wide portfolio of products, the real challenge was figuring out which ones would resonate.

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Technology complicated travel. FlightHub is simplifying it

Last year, global travel finally returned to pre-pandemic levels. But at the Montréal headquarters of FlightHub, one of North America’s largest online travel agencies, Ramzi Rahbani, FlightHub’s VP of Products, Customer Platforms and Innovation, began to notice that travellers themselves were not the same.

While the company had built an impressive brand, tech stack and services around offering customers easy access to affordable flights—facilitating more than 30 million travel connections since 2012—Rahbani said that FlightHub customers began to express frustrations that had nothing to do with price.

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Join ALL IN 2024: The largest event dedicated to Canada’s AI

Participate in the second edition of ALL IN, the largest event dedicated to Canadian AI, happening in Montreal on September 11 and 12. Building on last year’s success, which brought together over 2,300 AI enthusiasts from around the world, leaders from all sectors will gather again this September to explore the best of Canadian AI.

Led by Scale AI, co-organized with Mila and CEIMIA, and supported by the Canadian AI ecosystem, this must-attend event unites all the community’s pillars—from those who imagine and define AI to those who build and adopt it.

Hear from over 200 speakers, discover the latest AI advancements, engage in live demos, and connect with leading AI solution providers, including Canada’s top 100 AI startups and international delegations from over 40 countries.

Learn More

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Funding, Acquisitions, and Layoffs

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VAN – ChopValue – $4M CAD
VAN – Uni-One – $10M CAD
AB – PrairiesCan invests $15.5M CAD in 16 projects
SK – PrairiesCan doles out $6.3M CAD
OTT – Feds fund $8M CAD for 2SLGBTQI+ entrepreneurship
TOR – New School Foods – $8M CAD
TOR – Carbon6 acquires Junglytics
TOR – Givex to be acquired by Shift4 Payments for $200M CAD

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The BetaKit Podcast

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The BetaKit Podcast

AI roundtable: Hugging Face, Zapier, Tenstorrent (and more)

“Verticalized AI applications right now are available, right now accelerating industry after industry.”

AI is moving so fast it can be hard to keep up. The BetaKit Podcast has you covered with vantage points on AI from: Dr. Sasha Luccioni (Hugging Face), Reid Robinson (Zapier), Solon Angel (stealth startup), Darian Shirazi (Gradient Ventures), Joella Almeida (MedEssist), Chris Walker (Untether AI), and Eric Duffy (Tenstorrent). Rob and Douglas do their best to keep up.

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 CALLING ALL STARTUP FOUNDERS

Join the Startup Experience at Elevate Festival 2024, powered by Moneris

Elevate Festival, Canada’s premier tech event, is back in Toronto from October 1-3, 2024. This is your chance to join 10,000 tech enthusiasts, including investors, industry leaders, and potential partners.

Why should startups like yours attend?

 Founder-Focused: Enjoy talks, roundtables and masterclasses tailored specifically for founders
 Investor Access: Connect with VCs and angels looking for a future unicorn 
 Pitch Opportunities: Apply to showcase your startup on multiple stages and even get investment
 Expert Insights: Learn from 300+ speakers, including tech titans like Richard Socher and Kara Swisher
 Networking Gold: Expand your circle and meet your community in our Startup Lounge and after-hours socials

Don’t miss this opportunity to elevate your startup in Canada’s booming tech ecosystem.

Take advantage of our Last Chance sale to get $50 off your pass if you book by August 31!

Secure your spot

Image courtesy Manzil.

The post Can Canadian FinTech woo the customers that banks have left behind? first appeared on BetaKit.

Our producer and editor, Jess Schmidt, did such a good job pulling together last week’s episode while Rob and I were enjoying some summer fun in the sun that we asked her to do it again this week.

“Verticalized AI applications right now are available, right now accelerating industry after industry.”

It’s no surprise that artificial intelligence (AI) has been a constant topic of conversation over the last two years on The BetaKit Podcast. The pace of technological change has been breakneck, matched in scale only by the resulting financial commitments to AI from the world’s largest tech companies, and we have done our best on this podcast to keep up.

Perhaps the allure of AI (for podcasters, at least) is that the topic spills easily onto any other subject matter, whether it be economics, academia, or hell, cybersecurity. For this week’s episode, however, Jess tried to keep it a little more tangible and tactile, pulling clips from leaders at North American AI companies, or other tech companies that—like the rest of us—are trying to grasp what comes next. She still found spots to keep it light, like when Rob Kenedi and I offered letter grades for OpenAI and Apple, or when Solon Angel provided an interesting analogy for the creation of artificial general intelligence.

Interested in hearing more? You’ll find the full list of podcast episodes Jess pulled clips from below.

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

AI roundtable:

• Hugging Face’s Sasha Luccioni on tracking the ethical and environmental impacts of AI
• Zapier’s Reid Robinson on navigating AI integrations
• Solon Angel explains which industries will be dominated first by AI
• MedEssist’s Joella Almeida on going slow with AI in healthtech
• Gradient Ventures’ Darian Shirazi on where AI value will accrue
• Untether AI’s new CEO is here for global scale
• Why Korean car makers want Tenstorrent’s AI hardware
• WWDC: Did Apple just kill your AI company?
• AI regulation is coming but Tobi Lütke is not “EFRAID”

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy Tenstorrent.

The post AI roundtable: Hugging Face, Zapier, Tenstorrent (and more) first appeared on BetaKit.

The federal government is investing $15.6 million in 16 projects to boost technology commercialization in Alberta.

The investment is being made through Prairies Economic Development Canada (PrairiesCan), the federal regional development agency for Alberta, Manitoba, and Saskatchewan. Each of the 16 projects will be supported by a non-profit organization, some of which are well-known to Alberta’s tech sector, such as A100, InterGen, and HaloHealth.

“This is all about ensuring Alberta businesses have what they need to innovate from start to finish in order to compete within Canada and around the world.”

PrairiesCan Minister Dan Vandal

A100, which is a support and mentoring organization for tech founders, is receiving roughly $269,000 to enhance the Start Alberta platform. Start Alberta connects tech companies and investors in the province while offering real-time data for founders, investors, and other tech sector stakeholders. The platform was launched by A100 and the Venture Capital Association of Alberta.

Until last year, A100 was exclusively focused on the Alberta tech ecosystem, but in November 2023, the organization announced plans to expand its platform throughout Western Canada. 

Another Alberta tech organization set to receive funding is Calgary-based scaleup fund and talent matching program InterGen. The organization will use the $1.3-million federal investment to provide mentorship and educational and experiential programs that connect less experienced entrepreneurs with seasoned professionals to help digital technology businesses in Alberta expand into new markets, grow revenue, and attract investors.

InterGen has invested in several Alberta tech companies through its scaleup fund, including ZayZoon, Athennian, and StellarAlgo.

Toronto-headquartered angel investment group HaloHealth is receiving $260,000 to establish operations in Alberta. The firm provides advisory and business development services to healthtech startups, and has participated in funding rounds for Canadian companies like Clinify, Felix, and Wisedocs.

Earlier this year, HaloHealth led a funding round for Calgary-based RetinaLogik, which has developed a portable eye test device for optometrists and ophthalmologists.

RELATED: Fuelled by new funding, RetinaLogik wants to prevent vision loss with AI and VR

Health Cities is receiving nearly $600,000 for two projects. One is focused on strengthening the healthtech ecosystem in Alberta through more meetings and events, and the second is designed to execute the Alberta Age Smart Home Care Project. That initiative will test and validate health technologies in private residences to give startups and researchers real-world data on their technologies.

Health Cities focuses on helping startups and technology developers de-risk, develop, and validate healthcare solutions. The organization is based in Edmonton, but works with companies across Canada.

Also among the 16 organizations to receive funding are several Alberta universities. The University of Calgary is receiving $2.35 million to establish a cybersecurity solutions training centre. The University of Alberta is also receiving a total of $2.88 million to establish an advanced manufacturing hub, deliver its Lab2Market Validate program to help researchers and experts validate business ideas, and establish a network that will allow businesses to develop and test technologies to work on 5G networks.

Alberta is home to a growing tech sector that is quickly beginning to outpace more established ecosystems in Canada. A recent report from the Canadian Venture Capital Association indicated that startups in the province raised more venture funding in the first six months of this year than their counterparts in British Columbia. 

In a statement, Minister for PrairiesCan Dan Vandal noted the federal investments announced today are aimed at building on Alberta’s existing track record in commercializing tech products.

“This is all about ensuring Alberta businesses have what they need to innovate from start to finish in order to compete within Canada and around the world,” the minister added.

Feature image courtesy of abdallahh via Flickr.

The post A100, HaloHealth, InterGen get federal funding boost to help commercialize Alberta tech first appeared on BetaKit.

Toronto-based e-commerce software aggregator Carbon6 has acquired Washington, DC-based artificial intelligence (AI)-powered retail analytics platform Junglytics for an undisclosed amount. 

Carbon6 will open a European office in Belfast, Northern Ireland, in the fall. 

Carbon6 said in a statement that the acquisition will integrate Junglytics’ AI technology with its own data platform to provide online sellers with a data-driven decision-making tool. Junglytics’ platform and AI assistant provides Amazon sellers with data analysis and insights using a conversational interface powered by OpenAI’s GPT-4, according to Junglytic’s website. 

“This acquisition is a perfect alignment of our vision to revolutionize the way sellers interact with their data through AI-driven conversations,” Carbon6 co-founder Naseem Saloojee said in a statement. “Junglytics brings a transformative approach to AI that allows sellers to not only access data but also to act on it without delay.”

The Junglytics analytics dashboard provides sellers with sales numbers, page views, click-through rate, and conversion rate. Additionally, sellers can ask its AI-powered assistant plain language questions to help understand the available data. Some examples include ‘I updated my listing copy on February 1st. Did it help?’ and ‘How profitable is my business in Italy?’ according to a Junglytics blog post.

RELATED: Carbon6 closes $88 million CAD Series A to consolidate “fragmented” e-commerce software space

Founded in April 2021 by Saloojee, Kazi Ahmed, and CEO Justin Cobb, Carbon6 acquires, builds, and integrates software solutions for e-commerce merchants selling on Amazon, while also providing those same merchants with educational programs and support to help them grow.

Before securing an $88-million CAD ($66 million USD) Series A round in October 2022, a notably subdued venture capital environment, Carbon6 acquired over a dozen e-commerce companies, including inventory management and forecasting software firm SoStocked and ad revenue management tool PPC Entourage. 

Earlier this month, Carbon6 announced that it will open a European office in Belfast, Northern Ireland, in the fall. The Belfast office will serve as a hub for supporting United Kingdom and European sellers, Carbon6 said in a statement, adding that it will allow Carbon6 to provide more personalized support and attend key industry events throughout the year. 

Feature image courtesy Carbon6 via LinkedIn. 

The post Carbon6 acquires American firm Junglytics to provide AI tools for Amazon sellers first appeared on BetaKit.

Investor Deck is a six-article series presented by Sage, offering tips for SaaS startups from Canadian VCs. You can read the previous installment here.

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The Canadian tech IPO market might seem like a ghost town right now, but Mia Morisset, Principal at Inovia Capital, is optimistic about the potential for a comeback.

After two years of wrestling with high interest rates, inflation fears, and global instability, going public has become a distant dream for Canada’s SaaS scale-ups. Many of those that squeezed through the door during the 2021 boom have seen their share values falter, with some even retreating back to private ownership this year.

Morisset is a growth-stage investor at Inovia Capital, a Canadian investor that has accompanied four portfolio companies to IPO, including Sonder, Lightspeed, Perazo, and Milestone Pharmaceuticals, and works with several pre-IPO stage tech companies.

“Back in 2021, it was all about growth. Now it’s about profitable and predictable growth.”

Mia Morisset

Morisset appreciates the IPO landscape is still rocky, but she’s betting that the tide is set to turn.

“For late-stage startups, the past few years were about right-sizing the business,” she said. “In 2024, we’re starting to see companies going back into growth mode. I do think the IPO window is eventually going to reopen and we are starting to see signs.”

But Morisset says the path to IPO will look quite different when that window does reopen. She said learning from (and not repeating) the past mistakes of other public companies will be key.

“Back in 2021, it was all about growth. Now it’s about profitable and predictable growth. I think people now realize that you better not have a plan based on hope, but rather on what you realistically think you’re going to achieve, and this is how you’ll get rewarded in the public market,” she added. 

To Morisset, predictability and scale will be the twin pillars that will make or break the next era of SaaS IPOs.

Predictability, she said, comes from revenue streams and accurate forecasting models. “If you’re worried you’re not going to be able to hit your budget in the next three to six months, you don’t yet have the right predictability,” Morisset added.

Eric Sleeth, Senior Product Marketing Manager at Sage, believes that even for mature SaaS companies, building that predictability can be a multifaceted challenge that demands both strategic foresight and scalable tools. 

“Companies should focus on robust financial planning, customer segmentation, and churn prediction, leveraging tools like CRM platforms, subscription management software, and BI dashboards,” Sleeth said. “This predictability not only helps in the short term but also sets the stage for sustainable, long-term growth and investor confidence, particularly when preparing for an IPO.”

In order to build predictability into the business you first need scale, Morisset added. This includes a strong, loyal customer base and market penetration.

Sage’s Eric Sleeth believes metrics like customer acquisition cost, lifetime value, and net dollar retention “tell the story of a startup’s ability to sustain growth and achieve profitability.”

Measuring both predictability and scale involves analyzing key metrics such as gross margin, net and gross dollar retention, among others. “These metrics help you understand the profitable growth story of your company,” Morisset said.

Profitable growth differs from mere profitability, she added. It’s about expanding the business in a way that ensures long-term success. “You cannot avoid growth. But I think the public markets are going to scrutinize a bit more on what’s organic growth versus M&A, and make sure you have a strong organic story,” she added.

Beyond the numbers, Morisset emphasized that SaaS companies must consider the business drivers that aren’t as easily quantifiable. “What’s the market opportunity? What’s your edge? Is this the right management team in place to scale to the next stage?”

Sleeth believes that measuring scale is crucial because it provides a clear picture of a company’s market presence and growth potential. He said metrics like customer acquisition cost, lifetime value, and net dollar retention all offer insights into how well a company is penetrating its market and retaining customers. 

“These metrics are not just numbers,” he added. “They tell the story of a startup’s ability to sustain growth and achieve profitability, which is what public markets are increasingly focused on.”

Sage Intacct was built to support growth-stage companies on their path to IPO by providing scalable financial management, automating accounting tasks, and ensuring compliance with industry standards. Key platform features like real-time reporting, multi-entity consolidation, and strong internal controls streamline accounting processes and enhance auditability, all of which Sleeth said are essential for IPO readiness and a successful entry to the public markets.

When the IPO window reopens, Morisset believes the biggest change from 2021 will be the perception of the milestone itself. As more companies have been forced to focus on profitability, she sees an increasing number questioning whether an IPO is necessary at all.

“Before 2021, companies were seeing the IPO as the end game, and I think that has changed,” Morisset added. “People have realized that an IPO is a great milestone, but it’s not the only one, and startups have to think carefully about optionality and  the path they want to pursue.”

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Accelerate your cash flow process and request a Sage Intacct demo.

Feature image courtesy of Inovia Capital.

The post Here’s what will make or break the next wave of Canadian IPOs first appeared on BetaKit.

Last year, global travel finally returned to pre-pandemic levels.

But at the Montréal headquarters of FlightHub, one of North America’s largest online travel agencies, Ramzi Rahbani, FlightHub’s VP of Products, Customer Platforms and Innovation, began to notice that travellers themselves were not the same.

FlightHub dramatically retooled its tech to capitalize on the growing desire for “rebundling.”

While the company had built an impressive brand, tech stack and services around offering customers easy access to affordable flights—facilitating more than 30 million travel connections since 2012—Rahbani said that FlightHub customers began to express frustrations that had nothing to do with price.

“Based on our research and customer feedback, many travellers were using multiple platforms to piece together their trips. It wasn’t uncommon for them to rely on four to six different services—one for flights, another for hotels, separate platforms for car rentals, insurance, and currency exchange,” he said. “Travel planning was getting more time-consuming and complicated, so seamlessness and personalization was key.”

To address that pain point, FlightHub dramatically retooled its tech and product offerings in 2024 to capitalize on the growing desire for “rebundling”, or connected trip management, in which consumers are looking for one-stop solutions rather than an app for everything.

Worn down by the need to subscribe to multiple streaming channels and operate their personal and professional lives through a variety of platforms, consumers are increasingly looking for comprehensive support and services, not dissimilar to those provided by brick and mortar travel agencies in pre-Internet times.

“By bringing these services into one platform, we aim to simplify the process and reduce the need for travellers to juggle multiple providers,” said Rahbani. “Industry research supports the notion that travellers can spend hours piecing together different elements of their trips across multiple platforms.”

FlightHub is a product of Momentum Ventures, a holding company based in Montréal committed to growing startups that make a significant impact in the travel industry. To do this, the company and its ventures have always tried to stay at the forefront of customer demand.

For years, FlightHub has closely monitored customer feedback, through both direct contacts and wider surveys.

“There was noticeable pattern in customer behaviour. For example, many customers who initially booked flights through us would return later to inquire about accommodations or car rentals. We also tracked an uptick in searches for related services on our platform,” said Rahbani.

Today, FlightHub customers can book a suite of services through a customer portal called My Trips, allowing them to coordinate every element of their travel from connecting an eSIM, renting baby gear, booking excursions, or exchanging money.

The company is looking into expanding these services to include offerings that support sustainability, such as carbon offset programs and eco-friendly travel choices, made possible through strategic partnerships and technology integrations.

Rahbani said the company has made significant upgrades to its technological infrastructure in order to achieve a more streamlined booking service.

“This involved enhancing our search algorithms to provide optimal itineraries, not only for flights, but for entire trips that include connections, transfers, and additional services,” he said. “We also introduced more robust data analytics tools that allow us to tailor recommendations to each customer’s unique preferences.”

Technology has also allowed FlightHub to address another major pain point of modern travel: customer service.

On any given day, the company deals with thousands of customer inquiries across multiple airlines and travel services. To achieve exceptional customer service, Rahbani said the company combines AI technology with direct access to real people, ensuring customers can easily speak with someone when needed, while alleviating agents from basic inquiries.

“AI supports our customer service operations by handling a significant portion of routine inquiries through chatbots and automated systems,” Rahbani explained. “Our approach is to use AI where it can add the most value—such as quickly resolving simple issues or automating business operations—and then ensure that our customers can easily transition to speaking with a real person when their needs go beyond what AI can handle.”

AI is also used on FlightHub’s platform to provide personalized travel recommendations to customers, assist in fraud detection, and support dynamic pricing.

The company’s driving vision is returning a sense of joy and adventure to travel, and helping its customers focus on experiences rather than transactions.

“What excites me most about the technology we’re using is its potential to fundamentally reshape how we approach travel across the entire industry,” Rahbani said. “The technology we deploy enables us to create a platform where the entire journey feels intelligently designed, from the initial search to the return home and then even after that, in the referral and reconsideration phase. The era of personalization and seamlessness is here, and we are definitely moving in that direction.”

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To book seamless travel experiences through innovative Canadian tech, visit flighthub.com.

Photos provided by Momentum Ventures on behalf of FlightHub.

The post Technology complicated travel. FlightHub is simplifying it first appeared on BetaKit.

The federal government has revealed the organizations selected to deliver two key components of Canada’s 2SLGBTQI+ Entrepreneurship Program.

The $25-million federal program, first revealed in June 2023, aims to offer dedicated support to Canadian entrepreneurs who identify as 2SLGBTQI+. 

A QueerTech survey recently found that fewer than 40 percent of respondents feel that 2SLGBTQIA+ employees are “consistently treated with respect” in the workplace.

The 2SLGBTQI+ Entrepreneurship Program mirrors the approach of the government’s $7-billion Women Entrepreneurship Strategy as well as its Black Entrepreneurship Program. It consists of an $8-million ecosystem fund, a knowledge hub, and business scale-up program, and is administered by Canada’s 2SLGBTQI+ Chamber of Commerce (CGLCC).

The government has selected the first 17 organizations across Canada to deliver the program’s ecosystem fund.

The fund is designed to help recipient organizations offer programs and resources to support 2SLGBTQI+ entrepreneurs, while raising awareness of the challenges they face.

Among those selected is QueerTech, a national nonprofit that supports 2SLGBTQ+ tech workers and entrepreneurs.

QueerTech began in 2016 as a meetup group formed in partnership with Montréal NewTech, to help connect 2SLGBTQ+ professionals within the local tech industry. The organization claims that since then, it has helped over 10,000 professionals who identify as 2SLGBTQ+ through professional development and mentorship.

“QueerTech is an incredible organization dedicated to serving 2SLGBTQI+ tech entrepreneurs and I am excited to see the work they accomplish with this funding,” Canada’s Minister of Small Business Rechie Valdez said in a statement sent to BetaKit.

In addition to supporting 2SLGBTQ+ professionals in the tech sector, QueerTech also conducts research on the challenges faced by these individuals. In one report released by the organization in May, QueerTech found that fewer than 40 percent of respondents feel that 2SLGBTQIA+ employees are “consistently treated with respect” in the workplace.

RELATED: QueerTech acquires accelerator Gradient Spaces to support more 2SLGBTQ+ tech workers

In addition to QueerTech, other delivery organizations for the ecosystem fund include the 2 Spirits in Motion Society, SASKQUEER Entrepreneurs and Professionals, and Community Futures Development Association of British Columbia, among others.

The 17 organizations selected today will receive $5.1 million of the $8 million available through the fund. In a statement, the government said the remaining funding will be delivered to organizations “in regions where service gaps still remain to ensure there is equitable support across Canada.”

The government also announced that the Fyrefly Institute for Gender and Sexual Diversity, in partnership with the University of Alberta’s eHUB Entrepreneurship Centre, will operate the program’s knowledge hub. The organization will receive $3 million to build a national research network focused on collecting data to create a clearer picture of the entrepreneurship landscape for the 2SLGBTQI+ community.

According to the federal government, there are more than 100,000 2SLGBTQI+-owned and operated businesses in Canada that collectively generate over $22 billion in economic activity. But in many sectors, including tech, these entrepreneurs face unique and systemic barriers. A 2022 report by the CGLCC found that these barriers include prejudice, access to funding, sexual harassment, and discrimination in the workplace.

“Who you are and whom you love shouldn’t hurt your business, in fact, it should be a part of your success,” Valdez added in a statement. “Through our 2SLGBTQI+ Ecosystem Fund, we are supporting non-profit organizations across the country that are helping 2SLGBTQI+ Entrepreneurs reach their full potential.

Feature image courtesy QueerTech via Facebook.

The post QueerTech among 17 organizations selected by feds to deliver $8-million 2SLGBTQI+ Ecosystem Fund first appeared on BetaKit.

Calgary-based charitable donation management software firm Benevity has announced that Christopher Maloof will be replacing outgoing CEO Kelly Schmitt on Sept. 3. 

Maloof had been serving as an operating partner at prominent American software-focused private equity firm Thoma Bravo and was also president of California-based digital lending firm MeridianLink up until this month according to his LinkedIn. 

In a statement, Benevity pointed to Maloof’s “wealth of experience” in product development, leading scaled enterprise software companies, and working with impact-oriented organizations like nonprofits and credit unions. 

RELATED: Benevity cites lower than expected customer demand as cause for 14 percent layoffs

Benevity added that Maloof launched multiple new products at MeridianLink, drove its strategic acquisitions, supported digital transformation initiatives, and charted the growth path for its initial public offering.

Benevity founder and board member Bryan de Lottinville said in a statement that Maloof has “exceptional experience leading organizations focused on growth, scale, and efficiency,” adding that he is the right leader to “shepherd” Benevity. 

“As the global leader in social impact software, Benevity has redefined what business can achieve when it aligns purpose with action,” Maloof wrote in a LinkedIn post. “Benevity’s commitment to empowering people and organizations to create meaningful change resonates with me.” 

Founded in 2008, Benevity offers community investment as well as employee, customer, and nonprofit engagement software solutions. The company achieved a $1-billion valuation, also known as unicorn status, when United Kingdom-based private equity firm Hg purchased control of Benevity in December 2020. 

RELATED: Why Benevity’s new CEO Kelly Schmitt is already thinking about her successor

Benevity said that Schmitt chose to step down from her role as CEO after a six-year tenure with the company, where she started as its CFO. During that time, Benevity claimed Schmitt led the company to facilitate more than $15-billion in donations and credited her with achieving the $1-billion valuation and profitability. 

Schmitt became CEO in January 2021 after de Lottinville relinquished the role to be the company’s executive chairman for the second time in less than a year following the previous CEO stepping away for health reasons. In early 2023, Benevity laid off 137 employees, or 14 percent of its team, due to “macroeconomic conditions” and “significantly” slowed demand. 

Maloof isn’t Benevity’s only executive addition this year, having brought on Ricardo Moreno as chief revenue officer (CRO) in January. Moreno brought experience as a senior vice president and CRO at compliance software company Diligent and as a vice-president at customer service software company Zendesk. 

Feature image courtesy Benevity. 

The post Benevity appoints MeridianLink president Christopher Maloof as CEO Kelly Schmitt steps down first appeared on BetaKit.

Prairies Economic Development Canada (PrairiesCan) has invested $6.3 million across nine Saskatchewan ecosystem projects and businesses. 

The capital distribution comes in the form of large, repayable sums going to “high-growth businesses” such as Andgo Systems to help with scale-up, while smaller, non-repayable sums went to ecosystem development projects that help startups navigate growing their business, such as Conexus Credit Union’s Cultivator program.

Saskatoon-based software-as-a-service (SaaS) startup Andgo Systems received the largest repayable contribution of $2.1 million. The funding is meant to support the company in scaling up the operations and sales of its workforce-management software platform that automates onboarding, employee absences, filling vacant shifts, and annual vacation planning. 

Andgo raised a $5.6 million Series A round co-led by Boston’s Waterline Ventures and Toronto-based First Ascent in September 2022. One year later, the startup laid off nine of its employees after failing to meet its forecasted growth projections.

Other companies supported by the repayable investments include Saskarc, which is receiving $1.1 million to increase its fabrication capacity for structural steel, and Cubbi, which will get $500,000 to pursue food delivery market opportunities in Saskatoon, Calgary, and Regina. 

RELATED: Economic development agencies dole out $30 million to AgTech, AI, EV development

The non-repayable portion of the funding is going to the Indigenous Manufacturing and Contracting Network, Conexus Credit Union, and the University of Regina. 

The Indigenous Manufacturing and Contracting Network is receiving $160,000, the largest contribution to the non-repayable group, to provide training and mentorship opportunities for Indigenous companies and assist Indigenous small-to-medium sized businesses with their development in the manufacturing and contracting sectors.

Conexus’s incubator arm, Cultivator, is receiving $75,000 to sponsor its Startup Summit in Regina, which connects founders, investors, and mentors in the province. The University of Regina is receiving $35,000 to facilitate a “Startup 101 Bootcamp,” which connects students, postdocs, and faculty to connections in the startup community.

Last month, PrairiesCan invested more than $21 million across 14 projects in Alberta. Recipients included hyperspectral satellite imaging startup Wyvern and carbon-based soil alternative company Pure Life Carbon. 

Featured image courtesy Andgo Systems via its website.

The post Andgo Systems, Conexus among recipients of Saskatchewan-focused PrairiesCan funding first appeared on BetaKit.

Montréal-based investment giant Sagard Holdings has appointed its first head of artificial intelligence (AI), hiring Parinaz Sobhani to bolster its in-house expertise in an area it believes will play a key role for the firm over the coming years.

Sobhani has spent the past 15 years focusing on AI in academic and industry roles. With a PhD from the University of Ottawa specializing in natural language processing, Sobhani has helped develop end-to-end neural machine translation models at Microsoft alongside time working at other research labs.

For the last seven-and-a-half years, Sobhani has worked at Georgian, a growth-stage business-to-business software investor, where she most recently served as the Toronto-based firm’s head of AI. 

“Computers and humans are finally speaking the same language.”

Parinaz Sobhani

During her time at Georgian, where she was one of the company’s first AI hires, Sobhani built and led the firm’s AI team and practice, vetting potential AI investments and supporting the adoption of AI across Georgian and its over 50 portfolio companies. With Sagard, Sobhani has been tasked with doing the same work on a larger platform. 

Sobhani left Georgian earlier this month and is set to join Sagard as its head of AI on September 9. “I’m ready for a new challenge,” Sobhani told BetaKit in an interview. “I’m ready for building again.”

She expressed excitement about the opportunity to oversee AI efforts across a bigger Sagard ecosystem covering verticals ranging from healthtech to FinTech and climate tech. Sobhani claimed her role at Sagard offers the potential to deliver an even greater impact. 

Power Corporation of Canada-owned Sagard, which has over 150 portfolio investments and $25 billion in assets under management, is a global alternative asset management firm spanning venture capital (VC) through Portage Ventures and Diagram Ventures, as well as private equity, private credit, and real estate.

Francois Lafortune, managing partner at Sagard and co-founder and CEO of Diagram Ventures, led the search for Sagard’s first head of AI. He believes that Sobhani will give Sagard “a huge step up” in its ability to support its portfolio companies as they adopt AI, as well as how the firm evaluates prospective investments and deploys the tech internally.

“[Sobhani] is not only credible from an academic standpoint—and has published and is well-regarded in the AI circle—but she’s a practitioner who has done something similar in the world of venture … She’s seen what works, what doesn’t work, and I think she can bring a lot of that expertise to Sagard.”

To date, Lafortune said that Sagard has leaned on its existing investment team, “pockets” of internal expertise, and outside advisors to help guide its AI decision-making. “The part-time version of this across multiple people was just not as scalable, and, frankly, did not do justice to how big we think this [AI] trend is in the world of investing over the next decade.”

RELATED: Radical Ventures launches $800-million USD AI growth fund

Sagard is not alone in identifying a need for a dedicated AI leader: a variety of large companies have recently added new AI executive roles with titles like head of AI and chief AI officer.

As the broader tech market has cooled during the macroeconomic downturn, and many other startups and fund managers have faced difficulties fundraising, AI has remained hot. These conditions have benefitted Canadian companies ranging from AI-focused VC Radical Ventures to startups like video-creation startup Viggle, image-generator Ideogram, video-game behaviour engine provider Artificial Agency, and large-language model developer Cohere.

With the progress that has taken place over the past two years, Sobhani said, “Computers and humans are finally speaking the same language,” arguing that, “The opportunity is immense.”

But since the AI funding frenzy began after OpenAI’s unveiled ChatGPT in 2022, some investors have become wary of AI and how much companies have been spending on it, while ChatGPT’s growth has flatlined. In June, Thomson Reuters chief product officer David Wong told BetaKit that “The reality check is happening now” as buyers have become more discerning and started coming to terms with where AI is working and where it is not.

RELATED: “The reality check is happening now”: AI leaders on the state of the market at Collision

Sobhani acknowledged that successful AI adoption requires time, patience, and careful thought about what ingredients are being used and what problems you are trying to solve, as well as customer validation and education. “It’s not going to happen overnight,” she said, noting that data quality, differentiation, and privacy also remain challenges.

“I’ve been part of a few of those hype cycles, and they all have something in common: setting the wrong expectations, or solving the wrong problems, or not having enough patience to build the right infrastructure,” Sobhani said.

Lafortune expressed his belief that the next generation of tech champions will have AI at their core. He expects Sobhani to play an important role in helping Sagard refine its AI investment thesis and conduct due diligence to distinguish real progress from empty hype.

Lafortune expressed his belief that the next generation of tech champions will have AI at their core. 

So far, Sobhani has seen AI have a big impact on applications like content generation, information extraction, research, data analysis, customer support, and as a tool for developers. In areas where risk is lower because AI is augmenting the work done by a person, Sobhani said companies have already seen some success, something others have also told BetaKit.

Businesses developing fully automated solutions, however, need to be more cautious, Sobhani argued, given that the risk of letting AI run amok without any human supervision is greater. She said she has seen companies in highly regulated industries exercise more caution.

For her part, Sobhani highlighted that some demographics have been underrepresented in past tech waves, and hopes to play a part in ensuring that is not the case with this latest AI boom. 

“Especially for women [and] women of colour, I think this is a very critical moment to make sure they are part of this new wave of transformation … I’m very excited that I can be at least one voice [here],” Sobhani said.

Feature image courtesy Sagard Holdings.

The post Sagard hires Georgian’s Parinaz Sobhani as investment firm’s first head of AI first appeared on BetaKit.

Vancouver-based sports betting tech company FansUnite Entertainment has sold FansUS,  its United States (US)-based subsidiary, back to its co-founders. The sale includes the operations of online gambling support company Betting Hero. As a result, FansUnite has delisted from the Toronto Stock Exchange (TSX). 

 
“I extend my sincere thanks to our shareholders for their support throughout this journey.”

FansUnite CEO Scott Burton 

FansUnite entered the sale agreement back in June, which outlined that 90 percent of the sale’s $37.5 million USD net proceeds would be distributed back to shareholders at approximately $0.07 CAD per share. 

FansUnite had spent most of 2023 selling off its assets, including Chameleon Gaming and McBookie. CEO Scott Burton said in a statement that the FansUS sale agreement was a “substantial cash offer” for its “primary remaining asset” and came after a “long and thorough strategic evaluation.” 

The purchasing party, Betting Hero co-founders Jai Maw and Jeremy Jakary, are backed by Vancouver-based compliance and cybersecurity company GeoComply. Maw and Jakary will take a 60 percent stake in the company with GeoComply taking the remaining 40. 

“The completion of this sale represents the culmination of a tremendous amount of effort from the entire FansUnite team, and I am proud of what we have accomplished,” FansUnite CEO Scott Burton said in a statement. “I extend my sincere thanks to our shareholders for their support throughout this journey.”

RELATED: One year in, competition in Ontario’s iGaming market remains red hot

FansUnite said it expects to retain net cash of approximately $500,000 CAD to “explore new business opportunities” for “the economic benefit of ‎its shareholders” who are maintaining their interest. 

FansUnite first acquired Betting Hero in November 2021 as part of the acquisition of parent company American Affiliate. At the time, FansUnite said the transaction was made in order to “secure a podium position in the US online betting opportunity.” 

FansUnite had previously acquired Askott Entertainment in 2020, which had developed an iGaming betting platform with an esports, or competitive video gaming, focus. iGaming refers to activities such as sports betting, online casino betting, and poker betting.

Feature image courtesy Keenan Constance via Unsplash.

The post FansUnite sells American subsidiary back to co-founders, delists from TSX first appeared on BetaKit.

Montréal-based FinTech startup Hardbacon, which offers a free budgeting app and generates revenue through lead generation and affiliate marketing for financial products, has shut down after seeing most of its Google traffic vanish over the past year, following some updates to the search giant’s algorithm.

Hardbacon announced in an Aug. 15 blog post that it has suspended its operations, let go of its remaining employees, and plans to declare bankruptcy “in the coming days.”

This move comes 11 months after Google implemented some updates designed to combat spam that led to a steep decline in hits to Hardbacon’s website, a blow from which the search engine optimization (SEO)-reliant company was never able to recover, co-founder and CEO Julien Brault told BetaKit in an interview. 

“They killed really bad websites, and they killed a bunch of good websites as well.”

Since Google’s “helpful content update” in September 2023, Brault said Hardbacon has lost 97 percent of its traffic from the search engine. While Google’s most recent updates have led some of the company’s traffic to return, Brault said this latest change is unfortunately too little, too late for Hardbacon. “We’re still in a bad situation,” he said.

“It’s sad because, for 11 months, we dug ourselves a huge financial hole,” Brault added, noting that the startup remains in the process of filing for bankruptcy. At the time of publication, Hardbacon’s app and website remain functional, but Brault noted that both may stop working in the next few weeks if the startup’s trustee stops paying for hosting.

According to Google, the company’s helpful content system is “designed to better ensure people see original, helpful content written by people, for people, in search results, rather than content made primarily to gain search engine traffic.” 

Designed to deprioritize unhelpful SEO-driven and artificial intelligence (AI)-produced content, Google’s changes have impacted a broad swath of businesses that rely on SEO and online content, including Hardbacon, HouseFresh, New York Magazine, GQ, Urban Dictionary, and Tuta Mail, among others. “They killed really bad websites, and they killed a bunch of good websites as well,” Brault claimed.

A Google spokesperson declined to comment on Hardbacon’s situation or the ranking of any other individual websites to BetaKit, noting that Google launches thousands of updates to search each year. The company did claim, however, that its March updates “were not specifically designed to target pages with affiliate links,” but rather focused on deprioritizing content made solely for the purpose of ranking well on search and attracting clicks rather than helping people.

The Google spokesperson noted that the company takes feedback from “users, publishers, and the SEO community seriously,” adding that in response to reactions from creators and others, the company adjusted its algorithm this month to better surface small or independent sites. For its part, Hardbacon said the company’s latest updates helped but came too late.

Brault, a former book publisher and business and technology journalist, co-founded Hardbacon back in 2017 as a platform for retail investors to analyze and manage their portfolios. After struggling to monetize this app through subscriptions, in 2020 Brault said the startup pivoted to focusing exclusively on a component it already offered—budgeting—and layering on financial product comparison tools and educational personal finance content to draw consumers in.

RELATED: Sampler files for bankruptcy

“Our goal with Hardbacon was to help the little guys get as much as they can from their money,” said Brault.

Since 2020, Hardbacon has offered its budgeting app for free and the startup has generated revenue through lead generation and affiliate marketing via SEO for financial institutions, collecting a fee for connecting consumers with products like credit cards, bank accounts, and insurance, as well as sponsored content. To fuel its efforts, Hardbacon had raised approximately $3 million CAD in total funding to date from approximately 2,000 individual investors via crowdfunding.

While Hardbacon’s app has 50,000 registered users, Brault said its active user count was far lower thanks to Canada’s lack of open banking, “plateauing” at about 2,000 because of difficulties users faced connecting their financial accounts so their spending and saving could be monitored on the app. “The problem is the churn was high because accounts keep disconnecting, like every f-cking day,” he said.

Prior to Google’s September 2023 updates—the rollout of which concluded on Sept. 28—Brault said Hardbacon had 10 employees. That September, just before the updates, he said the company had 400,000 unique website visitors and booked $55,000 in revenue.

According to Brault, Google’s September 2023 updates and all of the changes it has made to its search algorithm since then—save for the latest ones—have resulted in Hardbacon losing Google traffic. 

“I guess we looked like a spam website in the eyes of Google,” he said.

Brault said Hardbacon tried everything to rectify the issue, spending months trying to fix its SEO issue, improving its content and website, reducing its expenses and whittling down its team until the company only had Brault and two employees remaining. Hardbacon laid off those two people and ultimately decided to pull the plug this month.

Hardbacon’s story has some parallels to that of Canadian-founded Apollo, a third-party app for browsing the online discussion platform Reddit. Apollo also shut down last year in response to changes made by a big tech company: in its case, the app was priced out by Reddit’s changes to its application programming interface (API) policies.

RELATED: Reddit’s new API pricing kills Canadian app Apollo

Brault characterized Google’s search dominance as “highly problematic.” According to Statista, globally Google currently owns more than 80 percent search engine market share on desktop, down a bit from the 90 percent it held in 2019, with Bing accounting for 10 percent and the remainder spread out across a variety of players. Brault argued that this makes Google “the internet by themselves.”

“It’s not sustainable to have only one search engine on the internet, and when you have 90 percent of it, you become, de facto, the judge of who will survive on the internet and who can do business on the internet,” Brault said, adding that this is why antitrust regulations exist.

What makes things even more bittersweet for Hardbacon is the fact that in a landmark antitrust case south of the border, a United States judge recently ruled that Google acted illegally to maintain a monopoly in the search space. In Hardbacon’s blog post, Brault noted that this and other pending legal cases suggest that Google may lose ground due to its allegedly anti-competitive behaviour.

Brault claimed that he has already been approached by at least 20 credible potential buyers, and hopes to see Hardbacon’s tech and content live on in some capacity, but emphasized that the matter is now in the hands of Hardbacon’s trustee. 

RELATED: FinTech leaders say “devil is in the details” with Budget 2024 open banking promises

As to what comes next for him, Brault said he doesn’t know at this point, noting that he is still engaged in the bankruptcy process, but added that he will probably try to find another job afterwards.

Brault said Hardbacon considered all possible options, including implementing a subscription fee for its budgeting app. The CEO said Hardbacon decided not to go that route given its past experience and expressed doubt that it would have made a difference.

“If [this] can be a reminder for other entrepreneurs to diversify their marketing acquisition channels, then that’s good.”

Since Hardbacon announced the news earlier this month, Brault noted that some folks have argued the startup was too concentrated on a single marketing acquisition channel.

For his part, Brault said that Hardbacon focused its efforts entirely on SEO and Google traffic because it was the most profitable, noting that this strategy has proven fruitful for larger, Nasdaq-listed NerdWallet.

“When you do lead generation for financial institutions, you need high-intent people,” Brault said. “How do you find people that have a high intent of getting a credit card or insurance? They go to Google and they say, ‘What’s the cheapest insurance for single parents?’ or something like that.”

Brault noted that it is easy to lay blame on Hardbacon’s concentration on SEO in hindsight, but also acknowledged that had the startup diversified its approach, the outcome may have been different. “Next business, I won’t do any business that I need to rely entirely on SEO—that’s learned for life,” he said.

“If [this] can be a reminder for other entrepreneurs to diversify their marketing acquisition channels, then that’s good,” Brault added.

UPDATE (08/29/24): This story has been updated to include comments from Google.

Feature image courtesy Hardbacon.

The post Hardbacon to file for bankruptcy after Google search changes crush affiliate business first appeared on BetaKit.

Canadian ecommerce giant Shopify is hiring former Microsoft executive Mikhail Parakhin as its new CTO. 

“The impact of [Parakhin’s] work across the broader tech industry runs deep.”

Shopify president Harley Finkelstein

According to his LinkedIn, Parakhin had been with Microsoft since 2019, most recently serving as CEO of advertising and web services, with previous experience as the president of its web experiences team and its corporate vice-president of technology. 

In a statement, Shopify said Parakhin led Microsoft’s artificial intelligence (AI) advancement by helping to build consumer and enterprise-facing products like Copilot. The company added that Parakhin is “one of the finest machine learning (ML) crafters on the planet” and said he will oversee its engineering and data organizations. 

Parakhin has also previously served as the CTO of Russian ML-powered search engine company Yandex, where, according to Shopify’s statement, he developed multiple search engines, cloud services, and digital assistants. 

Shopify co-founder and CEO Tobi Lütke said he has “deeply admired” Parakhin for years and praised his “deep expertise” in AI and ML in a post on X. In his own post, Shopify president Harley Finkelstein said the hire was a “huge win” for Shopify’s engineering and data teams, as well as merchants. 

RELATED: Shopify grows revenue 21 percent in second quarter

“Mikhail is exceptional when it comes to engineering, machine learning, search, and AI,” Finkelstein said. “The impact of his work across the broader tech industry runs deep.” 

Parakhin stepped down from his leadership role at Microsoft, where he was working on Microsoft’s search engine Bing, one week after the company appointed Google DeepMind alum Mustafa Suleyman as its AI chief and asked Parakhin to report to him, Bloomberg reported in March. Instead, Parakhin “decided to explore new roles” and was to report to Microsoft CTO Kevin Scott in the meantime, according to an internal memo acquired by The Verge. 

Shopify’s last CTO, Allan Leinwand, left the company for “personal reasons” in early 2023. At the time of Leinwand’s departure, the company declined to share whether the company was looking for a new CTO and explained that Lütke was assuming leadership of the company’s research and development division.

On an earnings call earlier this month, Finkelstein said Shopify surpassed $1 trillion in cumulative gross merchandise volume and launched 150 product updates and features during its Summer 2024 Edition that included a slew of AI announcements.

Feature image courtesy Shopify. 

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Toronto-based foodtech startup New School Foods has closed an $8-million CAD ($6-million USD) seed extension as it gears up to launch its plant-based salmon in the United States (US) and Canada.

The seed extension was led by Good Startup, which invests in startups that aim to remove animals from the food system. The round also included participation from returning investors NewTree Capital and Hatch, and new investor Inter IKEA Group. It also includes some non-dilutive capital that New School Foods received from federally funded innovation cluster, Protein Industries Canada, as well as angel capital. 

“The response to our initial tastings with chefs and restaurants across the US and Canada have been incredibly positive.”

Chris Bryson

The seed extension comes roughly 18 months after the startup closed $15.9 million CAD in seed financing, and brings the company’s total funding to over $24 million CAD.

New School Foods produces plant-based seafood that is meant to emulate the taste, texture, nutritional benefits, and cooking experience of conventional seafood. It is currently in the process of rolling out its first product, an imitation salmon filet. 

According to one global market research report, the plant-based seafood market was valued at approximately $84 million in 2022 and is predicted to grow to $1.3 billion by 2030. New School Foods is one of a growing number of Canadian foodtech startups looking to develop environmentally friendly and cruelty-free alternatives to meat and fish. 

But CEO Chris Bryson believes New School Foods has found its pearl: the startup has developed a proprietary food production process to create “whole-muscle” seafood alternatives.

RELATED: Can this Canadian company make a splash in plant-based fish?

In the context of seafood alternatives, “whole-muscle” refers to products that are designed to closely mimic the texture, structure, and appearance of a real piece of seafood. Unlike ground or processed seafood alternatives, which may be shaped into patties, nuggets, or other forms, whole-muscle alternatives aim to replicate the fibrous nature of actual seafood.

New School Foods has patented “scaffolding and directional freezing” technologies that it says can create this effect. The startup was founded in 2021 by Bryson. Prior to starting New School Foods, he founded Unata, which provides white-label e-commerce solutions for grocers. Bryson sold Unata to Instacart in 2018, reportedly for $65 million.

Along with the new funding, New School Foods is also unveiling a 28,000 sq. ft pilot production facility in Toronto. The facility houses the first version of the startup’s commercial assembly line, which will use the company’s patented tech to imitate the muscle fibres and connective tissue that form the basis for the texture of seafood and meat. 

The facility also houses the startup’s scientific research lab, engineering lab, and business operations team, which the company said will work together to develop more whole-cut plant-based products that have the same look, cooking properties, taste, and texture as seafood and meat.

In an emailed statement, Bryson told BetaKit the startup began using the facility in the first quarter of this year.

“It’s worth noting that unlike many other plant-based companies, we are completely our own manufacturing operation and do not rely on a co-manufacturer,” Bryson added. “This ensures that we have greater control over quality, unit costs, and can invest in continuous innovation for both our process and formulations so as to solve the most important issue at hand: creating plant-based alternatives that appeal to a wider customer audience.”

RELATED: Save da Sea closes seed financing, becomes the first investment of BDC’s Thrive Lab

The new funding will support New School’s upcoming launch in American and Canadian restaurants. Bryson said the startup is gearing up for its restaurant launch, noting its plan has “always been to distribute via the chefs and tastemakers.” 

“[Seventy percent] of the seafood purchased in the US is via restaurant orders rather than grocery [or] cook-at-home,” he added.

Inter IKEA Group represents the group of companies that connects IKEA franchisees with range development and suppliers. In a statement, New School Foods said Inter IKEA Group’s investment is part of the furniture retailer’s goal to increase its own plant-based product offering in the last few years. IKEA has previously stated its goal to make half of the main meals in IKEA restaurants plant-based by 2025.

“New School Foods is a true pioneer in the alternative protein industry, and we were impressed by the team, their products and the production technology they’ve developed. We are curious to explore and learn more about the potentials for plant-based alternatives,” Robert Carleke, innovation ventures manager at Inter IKEA Group, said in a statement.

When asked if New School Foods is currently negotiating a deal to put its products into IKEA restaurants, Bryson said there is currently no plan to serve the product in IKEA restaurants. He declined to disclose whether the firm is in negotiations with IKEA.

“Our initial go-to-market strategy via restaurants is unchanged, as is our longer term mission of accelerating the transition to a more sustainable food system,” the CEO added. “We don’t expect that can happen with any single brand, which is why we will be working with larger companies to leverage our production technology to produce co-branded products.”

When raising its seed financing last year, New School Foods launched a chef-only pilot program for its salmon alternative. On a June episode of The BetaKit Podcast, Bryson explained the initial target market for the product was restaurants and food service businesses. 

He explained that plant-based meat alternatives were “struggling in grocery, but that’s because, for the most part, there’s a lot of crappy products that are out there.”

RELATED: New foodtech association looks to promote more sustainable seafood alternatives

Bryson added that sales of plant-based foods were actually growing in the food service and restaurant markets. He noted that restaurants are places where people are more open to trying something new, making it easier to encourage the switch from meat to plant-based foods.

“The response to our initial tastings with chefs and restaurants across the US and Canada have been incredibly positive,” Bryson said in a statement. “It’s a testament to our team’s commitment to creating a product that truly amazes both chefs and customers, providing a delicious and joyous experience.”

One individual who has tasted the product is Rob Kenedi, startup advisor and coach, and co-host of The BetaKit Podcast, who described it as remarkable. 

“From the way it looked raw, cooked, and even after being torched, just uncanny,” Kenedi said. “They prepared it with an excellent chef in many different forms. Some I liked more than others, but, in general, it worked very well.” 

“It’s really weird the expectations you put on what a food ‘should’ look, taste, feel, and smell like, but I would totally eat it again. It worked for me,” he added.

Feature image courtesy New School Foods.

The post New School Foods lands big fish as IKEA joins returning investors in $8-million CAD seed extension first appeared on BetaKit.

Vancouver-based foodtech startup Uni-One has closed $10 million CAD ($7.4 million USD) in Series A funding to help it scale its supply chain network for grocers and restaurants across Canada and into the United States.

The all-equity, all-primary round saw participation from Celtic House Asia Partners and affiliate Celtic House Venture Partners, as well as Red River Investments, Banyan Pacific Capital, Fantuan, and others.

The startup claimed that the new funding gives Uni-One a post-money valuation of $60 million CAD. 

“The current model of food distribution in North America still clings to many old-fashioned, outdated, and inefficient systems.”

Founded in 2017, Uni-One says it offers a tech-based food distribution network to restaurants and grocery businesses. A spokesperson for Uni-One told BetaKit the company’s solution includes a front-end sales service designed to streamline product selection and order placement, a logistics and dispatching system, inventory management software, procurement software, and a management dashboard. 

”The current model of food distribution in North America still clings to many old-fashioned, outdated, and inefficient systems,” Uni-One’s founder and CEO Neil Gu said in a statement. 

“Food distributors in East Asia are at the forefront of efficiency and technology. Based on their example, Uni-One has developed its in-house proprietary intelligent supply chain system that integrates procurement, warehouse management, logistic dispatching, and front-end order placing that will transform the food distribution industry in North America,” Gu added.

Uni-One is focusing its efforts on specific food segments, including Chinese, Japanese, Korean, Vietnamese, Malaysian, Indian, and Thai cuisines. The firm brings brands like Chinese sparkling water brand Genki Forest , Want, and noodle brand Hao Huan Luo to grocery giants such as Loblaws, T&T Supermarket, and Walmart. The company also supplies restaurants, such as Yunshang Rice Noodle, Happy Tree House BBQ, and Jiyu Hot Thai Hot Pot, according to its website.

The startup’s spokesperson claimed that Uni-One is currently working with 500 grocery stores and 3,000 restaurants. The startup claimed its revenue run rate currently exceeds $100 million CAD.

RELATED: Eight Canadian foodtech projects receive $1.9 million in pilot funding from CFIN

In a statement announcing the recent fundraise, David Adderley, managing partner at Celtic House Venture Partners, claimed the startup has doubled its annualized revenue run rate while remaining profitable since his firm first invested in the startup in 2023.

“Uni-One is disrupting the traditional food supply chain industry in Canada with its food wholesale, food services, and retail e-commerce platform,” Adderley said. “With its one-stop food supply chain cloud-based technology platform, Uni-One has worked to solve many of the pain points in the traditional food supply chain, providing streamlined and more efficient services to its restaurant, retail and wholesale customers.”

Uni-One will use the new funding to fund strategic mergers and acquisitions in both Canada and the United States. Uni-One said it has completed four acquisitions in Canada within the past few years and has three more set to close this year. 

Uni-One’s spokesperson declined to disclose the names of those companies, but noted they include a meat processing plant in Vancouver, a seafood processing and distribution company in Montréal, and a food distributor in Calgary.

The funding will also help Uni-One extend its distribution services across Canada, and enter the US market at the end of this year. Prior to this expansion, Uni-One was only available in Vancouver, Victoria, Edmonton, Calgary, Winnipeg, Toronto, the Okanagan region in BC, and Regina.

UPDATE (28/08/2024): A news release sent to BetaKit prior to the publication of this article erroneously stated that the round was co-led by Celtic House Asia Partners and Red River Investments. Following the publication of this story, a spokesperson for Uni-One clarified the Series A round had no lead investor, and additionally included participation from two other investors not previously known to BetaKit.

Feature image courtesy Unsplash. Photo by Fikri Rasyid.

The post Uni-One closes $10-million CAD Series A as foodtech startup’s revenue run rate surpasses $100 million first appeared on BetaKit.

Non-profit home sharing platform Happipad has only facilitated 31 lease signings as of Aug. 28, 2024, just over one year since it signed a $1.3-million deal with the Province of Nova Scotia, the province’s Department of Municipal Affairs and Housing told BetaKit this week.  

“While signups are meeting or slightly exceeding expectations, the number of finalized matches is lagging slightly behind.” 

Happipad

The Canadian Press first reported that the platform had facilitated 23 lease-signings as of July 31, 2024. 

Happipad first partnered with the Nova Scotia government in June 2023 to help people displaced by the province’s unprecedented wildfire season find housing. The province expanded the partnership in August 2023 by investing $1.3 million CAD over two years to make the platform available across the province.

“We all have a role to play as we work together to overcome this housing crisis, and today’s announcement is a call to action to all Nova Scotians who may have extra space in their homes to consider hosting a person or family in their home,” Nova Scotia Municipal Affairs and Housing Minister John Lohr said when the deal was announced. 

Lohr added that Nova Scotia had 130,000 vacant bedrooms, and that the expanded program would help more people who need “a safe, affordable and comfortable short-term accommodation.”

By November 2023, Nova Scotia Department of Municipal Affairs and Housing Deputy Minister Byron Rafuse said 200 households and 558 renters had registered, the Halifax Examiner reported, adding that only four contracts had been signed by then. 

That number has increased to a total of 77 listed rooms and 31 leases signed as of Aug. 28, 2024, Nova Scotia’s Department of Municipal Affairs and Housing told BetaKit. Nova Scotia Advanced Education Minister Brian Wong told The Canadian Press that he sees the potential in the platform and that it had seen seven leases signed in July, the most in a single month since the deal was announced. 

In a statement to BetaKit, Nova Scotia’s Department of Municipal Affairs and Housing said they “promised” Nova Scotians they would explore “every idea and bold solution” that has worked in other provinces, pointing to Happipad’s operations in Ontario, British Columbia, and Alberta. The department added that it hopes “more Nova Scotians will consider if home-sharing is the right option for them.”

In an email statement to BetaKit, Happipad said that the Canadian Press report only covers the first eight months of the program’s operations, as Happipad was not allowed to launch until the Nova Scotia wildfires were resolved, causing it to miss the student housing cycle. 

“We did help with the wildfires which was a different approach, we actually built some new software to help with emergency housing placements,” Happipad explained in a statement. “Emergency housing and long-term home sharing are very different types of programs.”

Happipad added that it is also undertaking a grassroots campaign to raise awareness of its platform and inform those not on social media of its existence to encourage sign-ups. 

“Despite these challenges, we have a goal of supporting 500 households by the end of two years which our signup trajectory is showing,” the statement reads. “While signups are meeting or slightly exceeding expectations, the number of finalized matches is lagging slightly behind.” 

Happipad said it is “very pleased” with the progress it has made so far, as growth in programs like itself is not linear. The company added that it is beginning to see momentum build. Happipad said that it currently has 937 registered renter profiles, 643 registered hosts, and 312 listings in progress. 

RELATED: Nova Scotia government invests $1.3 million in home-sharing platform Happipad

Happipad, a Canadian non-profit organization based in Kelowna, BC, began with help from the Canada Mortgage and Housing Corporation (CMHC), and offers services in every province. It matches prospective renters with homeowners who have a room in their home available to rent and provides contracts, a payment platform, and support in case there is an issue. CMHC told BetaKit in an email statement that it has provided a total of $600,000 in funding to Happipad through its Housing Supply Challenge (HSC) and NHS Demonstrations initiative programs.

“It is our expectation that the projects we support will succeed but we are aware that some will not,” CMHC said in the statement. “Happipad received incubation funding through the HSC however, their solution was not selected to advance to the next stage.”

The past year has seen governments at all levels look to address what has been called a housing crisis as rent and property prices skyrocket. A CMHC report released in September 2023 found that Canada will need 3.5 million more housing units on top of what is already being built to restore housing affordability.

Halifax Atlantic MLA Brendan Maguire has voiced concerns about the province’s investment in the platform, having questioned what made Happipad more effective than any other classifieds app or website like Kijiji. The Halifax Examiner has also dissected the price and quality of some of Happipad’s public room listings in Halifax, and concluded there were no marked differences between it and other rental listing platforms. 

Happipad explained that it sets itself apart from classifieds, and unlocks “underutilized” housing, by performing background checks, check-ins, and conflict resolution support to attract users who may not feel safe using a classifieds website. Happipad added that some hosts prefer to keep listings private to view potential renter matches before inviting them to apply because of privacy concerns, meaning not all listings are publicly visible.

UPDATE (08/27/2024): This story has been updated with commentary from Happipad. 

UPDATE (08/29/2024) This story and its headline has been updated to note updated figures and commentary provided by the Nova Scotia Department of Municipal Affairs and Housing. 

Update (08/30/2024): This story has been updated with commentary from CMHC.

Feature image courtesy of Pixabay. Photo by Oleksandr Pidvalnyi.

The post Happipad has only signed 31 leases since signing $1.3-million deal with Nova Scotia last August first appeared on BetaKit.

Vancouver-based recycling startup ChopValue has added $4 million CAD to its Series A round, thanks to an investment from InBC Investment Corp.

In April, ChopValue announced it had raised $15 million CAD in Series A funding. A spokesperson for ChopValue declined to disclose the names of the investors in that round to BetaKit, but noted they included two high-profile tech entrepreneurs as well as corporate venture capital funds and other existing investors.

“The micro-manufacturing model is a viable blueprint to scale a circular future.”

Felix Böck, CEO and founder of ChopValue

With InBC’s new equity investment, the funding round now totals $19 million CAD, and the startup’s total funding now exceeds $30 million CAD.

Founded in 2016, ChopValue has created a system for recycling chopsticks from restaurants. The startup claims to collect over 350,000 chopsticks a week from its network of restaurant partners to prevent them from ending up in a landfill. 

Once collected, the chopsticks are delivered to what ChopValue describes as micro-factories. They generate a composite material, which is made by pressing the discarded chopsticks together under high pressure along with a water-based resin. 

The startup claims that the end material is stronger than traditional wood. ChopValue’s spokesperson told BetaKit the company has run mechanical property and durability tests of the material, and claimed ChopValue’s performance material has a density above 1,050 kg per m³, which they said exceeds the 600 to 900 kg per m³ range of traditional hardwoods like oak or maple.

That material is then used in furniture and decorative items for homes and businesses. The startup sells these products directly on its website. Products include tables, seating, wall decor, and shelf sets. 

On its website, the startup claims it has recycled over 174 million chopsticks to date. Its end products can be found in various locations across Canada and the United States, including within the furnishings of Vancouver International Airport and select McDonald’s, A&W Restaurants, and Pacific Poke locations, among other businesses.

When announcing its initial close of its Series A round in April, the startup unveiled the Microfactory Venture Platform (MVP), a new parent brand designed to extend ChopValue’s model to other recyclable materials.

RELATED: ChopValue raises $10.36 million CAD to globalize its chopstick-repurposing technology

Micro-factories refer to small-scale, highly flexible manufacturing facilities that typically focus on producing small batches of goods or customized products. Unlike traditional large-scale manufacturing plants, micro-factories are designed to be more agile, allowing for quicker production cycles and easier adaptation to new products or changes in demand.

ChopValue already has more than 80 micro-factories spread across more than nine countries, including in Canada, the United States, Mexico, the Philippines, Malaysia, Singapore, and the United Kingdom. The company is also opening its first micro-factory in Japan in the fall.

In its April announcement, ChopValue said MVP has acquired several intellectual property assets to manufacture from new resource streams, such as coffee grounds and apparel scraps. ChopValue’s spokesperson said MVP will “act as the research and development engine to support ChopValue’s strategic pioneer partners, with existing commercial relationships.”

In addition to ChopValue, MVP’s other brands include NoRock, which creates self-stabilizing table bases, and furniture manufacturer Jadon Inc.

In a statement, Felix Böck, founder and CEO of ChopValue and MVP, said ChopValue, despite its growth to date, is only tackling a small fraction of the global waste problem. “The micro-manufacturing model is a viable blueprint to scale a circular future and ChopValue’s value-added product engineering concept deserves to be scaled and live under its own brand: MVP,” he said.

RELATED: InBC leads $13.5-million financing round for ThoughtExchange

ChopValue and MVP aren’t the only Canadian companies using the micro-factory model. Montréal-based Relocalize, which closed $2.4 million in March, is piloting an autonomous micro-factory to produce a hyperlocal, certified plastic-negative packaged ice, on-demand for local supermarkets in Florida.

InBC is a $500-million strategic investment fund that was launched by BC’s provincial government in 2021. In addition to ChopValue, the fund has made investments in local tech startups such as 4AG Robotics and Clarius Mobile Health, as well as BC-based venture funds Pender Ventures and Amplitude Ventures.

ChopValue will use InBC’s investment to make key hires in its business development and design teams. According to its spokesperson, the startup currently has 50 team members globally, with an additional 200 across its franchise network. It plans to make three new hires by the end of the year.

“InBC’s investment is not only a testament of what we’ve built to date, but a powerful catalyst for our efforts and strategy to build a more responsible future,” Böck said in a statement. “It’s exciting to lead the way in rethinking our resources from a province that deeply values its environment.”

Feature image courtesy ChopValue.

The post BC chopstick recycling startup ChopValue picks up additional $4 million CAD first appeared on BetaKit.

This is the third and final installment of New Market Entry, presented by ventureLAB. This three-part series spotlights founders bringing their international deeptech startups to the Canadian market. Read part one here and part two here.

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When Esha Chopra first met with the team at Caliber Interconnects, she was presented with a vast array of deep tech innovations—from autonomous mobile robots to cutting-edge semiconductor test services. 

Caliber Interconnects, a deeptech engineering technology company, founded in India and headquartered in Singapore, comes with a diverse range of expertise and a global presence with a focus on hardware design, integrated circuit package and substrate design, high-density interconnect design, and silicon testing. The team was eager to launch in Canada, however, with a wide portfolio of products, the real challenge was figuring out which ones would resonate.

“For any company entering the Canadian market, determining the optimal product fit requires significant effort.”

Esha Chopra, ventureLAB

As the Director of Programs at ventureLAB, Esha Chopra’s job was to help Caliber navigate this new market.

“We worked closely with Caliber Interconnects as part of our Soft Landing program, helping them identify the key products that would be most successful in the Canadian market,” Chopra said. “We definitely don’t suggest bringing in all the products at once, so we helped them figure out those with the best potential.”

Caliber Interconnects, which had already expanded into Singapore, Malaysia, and Japan, recognized the need for local expertise. To get this on-the-ground knowledge for their Canadian launch, the company turned to ventureLAB’s Soft Landing program.

The program, part of ventureLAB’s Canada Catalyst initiative, provides international deeptech companies with advisory services and key business resources to help them gain a foothold in the country.

After reviewing Caliber Interconnects’ product portfolio, ventureLAB focused on a real-time video security surveillance solution called KENVISION. The product uses advanced image processing to detect anomalous activities and instantly alert designated authorities about potential threats.

The market for integrated security solutions in Canada is projected to expand by 12 percent annually over the next five years. For Chopra, the opportunity was compelling.

“I found Caliber Interconnects’ solution quite innovative,” Chopra said. “There aren’t as many competitors in that area in Canada, so that product was an obvious choice.”

Caliber Interconnects has also developed a line of autonomous mobile robots that can handle materials, manage inventory, provide surveillance, and perform automated cleaning. A needs analysis performed by ventureLab assessed potential demand for the robots in Canada

“The versatility of this product extends from manufacturing to hospitality,” Chopra said. “Given their widespread adoption, these robots were another clear choice for the Canadian market.”

Since completing the Soft Landing program earlier this year, Caliber Interconnects has made multiple hires in Canada. The company has also identified Canadian grants that can help them hire locally and have access to deeptech networking events across the country, such as ventureLAB’s HardTech Summit.

By equipping these companies with a local understanding of the Canadian market’s gaps and needs, Chopra said ventureLAB aims to provide international firms with a strong foundation for a successful launch.

“For any company entering the Canadian market, determining the optimal product fit requires significant effort,” Chopra said. 

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Breaking into North American markets calls for deep market knowledge, skilled talent and an experienced support network who can assist you in your journey to Canada.

ventureLAB’s Canada Catalyst serves as a launching pad for international companies to enter the Canadian market and beyond, catering specifically to the unique needs of companies in the hardware and enterprise technology sectors, with a strong emphasis on DeepTech.

Visit https://www.venturelab.ca/canada-catalyst to learn more.

Images provided by ventureLAB.

The post The right Caliber for Canada first appeared on BetaKit.

Toronto-based customer engagement platform Givex has entered into an agreement that will see it acquired by American commerce payments firm Shift4 Payments. 

The transaction is expected to close in the fourth quarter of 2024.

The all-cash transaction will see Givex’s Toronto Stock Exchange (TSX) shareholders receive $1.50 CAD per Givex share, implying an aggregate equity value of $200 million on a fully-diluted basis. BetaKit has reached out to Givex and Shift4 to confirm if there are additional financial considerations as part of the transaction. 

The firms announced the agreement Monday morning, with the $1.50 per share price tag representing a 55 percent premium on Givex’s Friday closing price of $0.97. Givex’s share price has fluctuated over the past year, dipping as low as $0.37 per share in September 2023, before steadily increasing prior to the transaction announcement. 

Givex is a cloud-based global customer engagement and business insights platform that provides businesses with end-to-end point-of-sale, customer loyalty, and event ticketing tools and analytics. 

RELATED: US hospitality tech firm Agilysys acquires Book4Time for $204M CAD

Shift4, listed on the New York Stock Exchange, provides a point-of-sale payments processing and gift card solutions platform to retailers, restaurants, casinos, hotels, and more. Shift4 President Taylor Lauber said in a statement that Givex’s “considerable footprint around the world” will dramatically increase Shift4’s customer base and that its gift card and loyalty solutions are “second to none.” 

“The Givex Team looks forward to joining the Shift4 family and [bringing] our enterprise gift card capabilities and loyalty programs to hundreds of thousands of new customers,” Givex CEO Don Gray said in a statement. “By combining Shift4’s end-to-end payment solution with our value-added engagement services, we can deliver an unparalleled package to both of our customer bases.”

Givex said it has also granted Shift4 a “right-to-match any superior proposal” provision that allows Shift4 a period of five business days to outbid any potential competitor. Givex will pay  $7.75 million to Shift4 if the agreement is terminated under “certain circumstances.”

The transaction is expected to close in the fourth quarter of 2024, at which point Givex will be delisted from the TSX and will apply to cease to be a reporting issuer under Canadian securities laws.

Feature image courtesy Unsplash. Photo by CardMapr.nl.

The post TSX-listed Givex to be acquired by American payments firm Shift4 for $200 million CAD first appeared on BetaKit.

Toronto-based generative artificial intelligence (AI) startup Viggle AI has secured nearly $26 million CAD ($19 million USD) in Series A funding to fuel the growth of its platform, which uses AI to help users create videos from simple text and image prompts.

Viggle launched its app this March, and the capabilities of its tech went viral shortly thereafter when videos began circulating online of Joaquin Phoenix’s Joker persona replacing rapper Lil Yachty’s stage entrance at the Summer Smash Festival in 2021. This turned into a trending meme format this April, when social media users began using Viggle to insert other celebrities and characters into the same video.

TSFV’s Eva Lau characterized Viggle’s recent growth as “whiplash-inducing.”

This helped the early-stage AI startup amass a community of more than 4.3 million members on the messaging platform Discord, and secure fresh financing from Silicon Valley’s Andreessen Horowitz (a16z) and Toronto-based Two Small Fish Ventures (TSFV).

In an interview with BetaKit, Viggle co-founder and CEO Hang Chu said that Viggle was “really, really excited by this virality,” noting that its product growth made closing this round “a little bit easier.”

Viggle’s all-equity, all-primary Series A round closed earlier this month, and was led by a16z with support from fellow new investor TSFV and other undisclosed backers. Chu declined to disclose the startup’s valuation or the details of its prior financings to BetaKit. This round brings Viggle’s total funding to more than $27 million CAD ($20 million USD). The startup plans to put its latest capital towards developing a stronger model, adding new capabilities, and improving its user experience.

“There’s a lot of text-to-video generators out there, but they are mainly pixel-based models [that] are hard to control and hard to really precisely edit what is happening in the video,” Chu said. “What we’re doing differently is we emphasize the controllability side.” 

According to Chu, one of the things that differentiates Viggle is its proprietary JST-1 tech, a video-3D foundational model that incorporates knowledge of physics to support the creation of more lifelike character movements and expressions. Using text and existing photos or videos, Viggle users can specify a character and a type of motion for them to do, and with the help of AI, Viggle will generate an animated video based on these requests.

Viggle’s existing software, which is available both for free and on a paid Pro subscription basis with additional capabilities for $9.99 USD per month, caters to a variety of users, helping content creators and everyday users quickly generate animated character videos from prompts, and streamlining the ideation and pre-production process for professional animation engineers, game designers, and visual effects artists.

According to Chu, Viggle currently has two main types of users: folks using it as a new tool for making memes, and professionals ranging from creators to workers at movie and game studios leveraging it as a content-making and visualization tool. To support the latter group, Viggle has recently launched a Creator Program, a free initiative that comes with a Pro subscription, an additional 1,000 credits—equivalent to 250 minutes of video—early access to new features, and opportunities to connect with fellow creators, among other things.

RELATED: Two Small Fish holds $41-million CAD final close for Fund III

Chu acknowledged that the AI video generation market has become competitive, but claimed that what Viggle is doing in terms of controllable video generation is unique currently. While general-purpose text-to-video models are good at the ideation phase, he argued that today, Viggle’s model “really shines in the post-editing” phases.

Chu is a former PhD candidate at the University of Toronto who studied computer vision and machine learning under Waabi’s Raquel Urtasun and Nvidia’s Sanja Fidler. He also previously worked as a researcher at Autodesk, Facebook, Nvidia, and Google.

TSFV co-founder and general partner Eva Lau described Chu to BetaKit as “an exceptional founder with deep technical expertise,” adding that the tech that underpins Viggle’s JST-1 foundational model is also “extremely unique and very difficult for others to replicate.”

“We’re essentially building a graphics engine with neural networks,” Chu said. While Viggle has started with a character model, he noted that over time, the startup plans to layer on more capabilities, including the ability to generate objects, character-object interaction, and eventually entire scenes.

Chu likened the startup’s existing offering to a prototype. “This is a proof of concept that this can work,” he said, adding that the startup is training stronger models to contend with more complex requests and improve the quality of the videos it can generate, which is limited at the moment, with shaky character movement and unchanging facial expressions.

Asked whether he sees Viggle’s tech replacing or supporting work done by humans, Chu claimed, “What we’re trying to do is all about empowering and augmenting the creators rather than replacing the creativity.” He asserted that the startup’s focus is on providing users with tools to streamline the animated video creation process—not automating it altogether.

But the tech underlying AI-generated videos, also called deepfakes, can also be dangerous. At its worst, it can be used to create misinformation and non-consensual pornography, and power scams. When asked how Viggle is navigating the potential for its product to facilitate copyright infringement and abuse, Chu said the startup has “community guidelines, policies, and terms in place that users need to make sure they have permission to use what they choose to upload.”

“We have implemented moderation mechanisms to protect against abuse, such as [not safe for work] content and political figures,” Chu added, noting that this is an area of focus for Viggle. “We are actively working on this, including a reporting and takedown process, to deal with potential copyright infringement and abuse.”

On the copyright side of the equation, when asked what data Viggle’s AI video models are trained on, Chu told BetaKit that the startup uses public sources. “Viggle leverages a variety of public sources to generate AI content,” he said. “Our training data has been carefully curated and refined, ensuring compliance with all terms of service throughout the process.” It is unclear what “public” means in this context, but given how other tech companies have approached training AI systems, it may refer to availability rather than rights to use said data.

Chu’s answer shares some resemblance to what OpenAI CTO Mira Murati said about the training data used for its text-to-video model, Sora, when she told The Wall Street Journal the company uses “publicly available data” as well as licensed data. For his part, Chu told TechCrunch that Viggle’s training data set included YouTube videos, an admission that a company spokesperson tried to backtrack before eventually confirming to TechCrunch.

This may create issues for Viggle. Earlier this year, when asked about OpenAI potentially using YouTube to train Sora, YouTube CEO Neal Mohan told Bloomberg that using YouTube videos to train an AI text-to-video generator would be a “clear violation” of YouTube’s terms of service.

At the same time, Viggle is not alone. According to Wired, lots of other AI model developers, including Apple, Anthropic, and Nvidia, have also used YouTube videos as AI training fodder.

RELATED: Radical Ventures launches $800-million USD AI growth fund

Earlier this month, Nvidia was hit with a class-action lawsuit from YouTube creators for training its models on their content, after a 404 Media investigation found that Nvidia scraped massive amounts of video from the platform and uncovered internal Nvidia conversations showing that workers knew the action might not be legal.

Viggle’s rapid growth has come with its own challenges, from managing its fast-growing Discord to high demand leading to longer wait times in some instances. Chu noted that the startup is working to ensure it has the capacity necessary to meet users’ needs and credited Discord and its moderators for their help in overseeing its large online community.

TSFV, which targets early-stage deep tech startups, announced the final close of its third, $41-million CAD fund two months ago. Viggle joins a TSFV portfolio that also includes fellow Toronto AI startup Ideogram, a Midjourney competitor that secured its own $80-million USD Series A round and launched its latest text-to-image model in February.

The venture capital (VC) firm was created by husband-and-wife team Allen and Eva Lau, former leaders at Wattpad, a Toronto-based social storytelling platform that was acquired by South Korea’s Naver in 2021 for more than $754 million CAD. Allen Lau, Wattpad’s co-founder and former CEO, is now TSFV’s operating partner, while Eva Lau, previously Wattpad’s head of community and content, currently steers TSFV.

RELATED: Midjourney competitor Ideogram closes $80-million Series A, launches latest text-to-image model

AI has also been a focus for a16z as of late. In April, the stage-agnostic VC giant closed $7.2 billion USD for its newest set of funds, including some big bets on AI with $1.25 billion dedicated to AI infrastructure and $1 billion for AI apps. The firm has also reportedly been building a stash of sought-after AI chips to win deals in the space.

As the broader tech market has cooled amid the macroeconomic downturn, and many other startups and fund managers have struggled to raise capital, AI has remained hot. These conditions have benefitted Canadian firms like Radical Ventures and startups like Viggle, Ideogram, and Toronto-based large-language model developer and OpenAI rival Cohere.

However, since the AI funding frenzy began after OpenAI’s release of ChatGPT in late 2022, some investors have become more wary of AI and how much many companies are spending on it, and ChatGPT’s growth has flatlined. In June, Thomson Reuters chief product officer David Wong told BetaKit that “The reality check is happening now,” as enterprise buyers have become more discerning and started coming to terms with where AI is working and where it is not.

As the broader tech market has cooled, AI has remained hot.

But Viggle’s investors are bullish on the startup’s prospects given its approach and progress to date. In a statement, a16z partner Justine Moore noted that the firm has been impressed by Viggle’s early momentum and the user base it has built in a matter of months.

Eva Lau characterized Viggle’s recent growth as “whiplash-inducing.” She claimed TSFV spotted Viggle and began discussions with the startup in March when it had thousands of users.

She claimed that Viggle’s JST-1 tech is “the first-in-the-world 3D-video foundation model with actual physics understanding,” and argued it “gives Viggle AI a huge first-mover advantage.”

Allen Lau, who has joined Viggle as an advisor, told BetaKit that he sees room for Viggle to become more than just a simple meme generator and “cause massive disruption in the content creation space.” The tech entrepreneur-turned-investor plans to lean on his decades of experience building and leading Wattpad and other startups to support Viggle, which he argued “is going to be the next big Canadian AI superstar.”

UPDATE (08/26/24): This story has been updated to include additional responses from Viggle AI co-founder and CEO Hang Chu and context about the risks associated with deepfakes.

Feature image courtesy Viggle AI.

The post Viggle AI closes $26-million CAD Series A to expand AI-powered video generator first appeared on BetaKit.

Following the success of its inaugural event, ALL IN 2024, co-organized by SCALE AI, the Montréal International Center of Expertise in Artificial Intelligence (CEIMIA), and Mila, is back for its second year, promising to be Canada’s most significant event dedicated to artificial intelligence. 

Building on the momentum from last year’s event, which attracted more than 2,300 AI enthusiasts, the 2024 edition will focus on how Canada is rapidly becoming an AI-powered economy. This year’s conference will again take place in Montréal on September 11 and 12 and is expected to welcome more than 3,000 leaders from the business and technology sectors worldwide including the country’s top AI startups, leading AI providers, government officials, investors, and researchers. 

“ALL IN will serve as a vital platform for both Canadian and global AI ecosystem players, including SMEs, to exchange, and provide a roadmap for industry leaders to fully embrace and harness the power of AI,” said Hélène Desmarais, Co-Chair of the SCALE AI Board of Directors. “Our goal is to promote the wider adoption of AI across all major Canadian industries and [enhance] our production capabilities.”

ALL IN’s extensive program will include more than 60 hours of content across four stages, featuring more than 200 speakers and thought leaders ready to dig into the latest advancements and applications of AI across sectors such as transport, healthcare, energy, and retail. Notable speakers include Yoshua Bengio of Mila, Deon Nicholas of Forethought, Nikola Mrkšić of PolyAI, Joëlle Pineau of Meta, John Shapiro of Lightspeed, and Sreedhar Sistu of Schneider Electric. 

In addition to its focus on AI’s impact on industries, the event will address broader societal issues, such as climate change and the ethical considerations of AI. Featuring researchers and thought leaders such as Sasha Luccioni of Hugging Face, Olivier Blais of Moov AI, and Anne Nguyen from the Innovation Council of Quebec, special sessions will discuss the development of safeguards and governance practices necessary to ensure responsible AI adoption.

The two-day event features an impressive agenda packed with keynotes, panels, and ample opportunities for discussion and networking. Must-attend sessions include deep dives into AI innovation in Canada, measuring AI success and ROI, the impact of AI in healthcare, and preparing society for a responsible AI-driven future.

To inspire and nurture the next generation of AI professionals, ALL IN is inviting students to attend Day 2 of the event, allowing them to connect with leading players in Canada’s AI ecosystem and explore career opportunities.

Those interested in attending ALL IN 2024 can choose a single ticket, group ticket, or virtual access on the official event website. See you there!

BetaKit is a media partner of ALL IN 2024.

Images courtesy of NATIONAL Public Relations.

The post ALL IN 2024 returns to Montréal for its second year first appeared on BetaKit.

Toronto-based FinTech startup Koho Financial is targeting the roughly one-third of Canadians who rent with three new offerings.

Today, Koho is introducing rent reporting to help its users build credit history, earn cash back on rent, and get tenant insurance through a partnership with Walnut Insurance. In an interview, Koho CEO and founder Daniel Eberhard told BetaKit that although many of Koho’s users are renters, this marks the company’s first dedicated offering specifically for them. Koho’s core product is a prepaid account for everyday spending and savings that allows users to make purchases with a Mastercard.

Koho CEO Daniel Eberhard said two-thirds of users who sign up are using Koho as their primary financial account.

With its new rent reporting feature, both new and existing Koho customers who pay rent through the platform will have their rent payments reported directly to a credit bureau. The idea is that for those who consistently pay their rent, this feature can become a valuable tool for building credit history.

Eberhard sees rent reporting as a way to turn the simple act of paying rent into a credit-building tool, not unlike a mortgage or credit card.

“Housing affordability is not a new issue in Canada,” he told BetaKit. “I think the historic ways that folks built credit were A, flawed, and B, out of reach.”

“The entry level way to build credit [through] a consumer unsecured credit card—which charges 18 to 22 percent [interest]—is really expensive and not a good product for a lot of people. I think that’s normalized and socialized in a way that does not make sense,” he added.

Besides using a credit card, Canadians can build credit through timely mortgage payments, but for renters, this simply isn’t an option.

With Koho’s rent reporting feature, users can sign up and continue making rent payments through their Koho account—no extra monthly steps or reporting are needed, according to Eberhard. The reporting also comes at no extra cost to users.

It’s a slightly different approach than that of fellow Toronto-based FinTech firm Borrowell, which also focuses on credit building and shares an investor with Koho. Borrowell’s Rent Advantage feature lets tenants report rent on a monthly basis for $8 per month. The service also allows users upload up to two years of their previous rent payments to Equifax Canada to build their credit history.

The case for linking rental payments to Canadians’ credit scores has gained momentum this year. In the spring, the federal government proposed factoring timely rent payments into credit score calculations. Supporters of the proposal argue that it could help aspiring homeowners build the financial credibility needed to qualify for a mortgage or secure better borrowing rates. 

Critics, on the other hand, warn that it could harm the credit scores of those who struggle to pay their rent on time in the context of high housing costs.

“That’s a silly argument,” Eberhard said, pointing out that such an outcome would simply indicate “the system working.”

“The point is, if you are a responsible rent payer, that should be reflected in your credit score …to me, that’s a feature, not a bug,” he added.

He explained that rent reporting is Koho’s effort to reach a point where everyday or “natural behaviours,” like paying rent, play a bigger role in building credit history compared to “unnatural” ones, such as relying on unsecured debt.

There appears to be strong early interest in the rent reporting product—Eberhard claimed that over 7,000 people signed up in the first week of its “dark launch,” which started July 30.

Along with rent reporting, Koho is offering eligible renters 0.25 percent cash back on every rent payment made through the Koho platform, automatically deposited into their Koho account. Koho isn’t the first in Canada to link rent to rewards—Toronto-based Chexy also allows users to split rent with roommates and earn cash back or rewards by paying rent with a credit card. It also offers rent reporting to help its customers build their credit history.

The third component of Koho’s new offering for renters is tenant insurance, provided through a partnership with Toronto-based Walnut Insurance. The service is available to users in Alberta, British Columbia, Manitoba, Nova Scotia, and Ontario who are using the rent reporting product.

RELATED: Walnut Insurance secures $4 million CAD to help FinTechs deliver embedded insurance programs

Founded in 2020 by serial entrepreneur Derek Szeto and growth specialist Adrien Niblock, Walnut helps brands deliver their own insurance offerings. Rates for the tenant insurance plan offered by Koho and Walnut start at $22 per month. Eberhard declined to disclose how Koho profits from this arrangement.

While all three new products were created with renters in mind, Eberhard said they also offer potential benefits for landlords.

Landlords “should care about” their tenants and want to help them build their credit history, he said. “Hopefully that makes you more competitive as a landlord in getting tenants, but then also it makes it easier for them to have a reliable tenant insurance product, so that you don’t have to worry about that as a landlord either.”

Credit building has become one of several core focus areas for Koho. Eberhard said currently, two-thirds of users who sign up are using Koho as their primary financial account.

Koho has traditionally relied on partnerships with regulated third parties to deliver many of its products. However, earlier this year, the company revealed that it’s working with Canadian regulators to obtain a Schedule 1 banking licence. Eberhard told BetaKit in January that he hopes this move will mark the beginning of an opening in Canada’s “deeply uncompetitive” financial services market.

Eberhard said Koho is still “very active and on track,” with that process. In the meantime, Koho has been focused on balancing growth with reaching profitability. 

Last year, the company restructured its team, which included two rounds of layoffs—though the company was still hiring—to better allocate capital towards growth initiatives, according to Eberhard. To further service that goal, the company raised $86 million CAD in a Series D extension in December 2023.

Koho has more in store on its product roadmap, including a buy now, pay later tool that’s currently in beta.

Regarding its growth goals, Eberhard claimed that Koho’s revenue has increased by roughly 80 percent year-over-year, with the company now “well north” of the $100-million run rate it announced after raising its Series D extension.

“We continue to be very focused on winning core accounts and primary financial behaviour,” he said, adding that Koho is focused on making its product “the best account in the country for the folks that we think we’re best equipped to help.”

Feature image courtesy of Koho.

The post Koho rolls out reporting feature to help Canadian renters build their credit history first appeared on BetaKit.

Maybe the cooler weather we’ve been having in Toronto lately is getting to me, bringing to mind the literal darker days to come as we prepare to say goodbye to sunshine-filled summer. But really, it’s the crappy last few weeks in the tech sector that’s got me feeling down. (Stick around for the silver lining).

Sampler, founded by Marie Chevrier, a rising entrepreneur whom many on LinkedIn called inspirational, shuttered operations and filed for bankruptcy last month. SkipTheDishes and its parent company laid off a combined 800 people in Canada. Tutoring platform Paper, which boomed when kids were home from school during the worst of the pandemic, cut 45 percent of its head office staff and replaced founding CEO Philip Cutler. Globally, more than 400 tech companies have let go of more than 134,000 employees this year, according to the oft-cited layoffs.fyi tracker. 

We can attribute these losses to the inevitable ebbs and flows of the startup business cycle. I hit up John Ruffolo, founder of Maverix Private Equity, to get perspective on the unease I have about this—and that I’m sure many of you are also experiencing. Companies are slimming down or locking in on delivering positive unit economics, but some have had to call it a day, he said. Ruffolo offered hope and a sanguine outlook. 

The silver lining of the downturn is that “it does enable both capital and human resources of those [companies] that do not survive to shift to the surviving companies, to enable those companies to become much stronger,” Ruffolo told me. “It is no different to the thinning of a forest to enable the surviving trees to stand taller.”

In the rest of this newsletter, I’ll take you on a tour of some of those trees growing taller.

Thanks for reading on and ’til next week, 

Bianca Bharti
Newsletter editor

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TOP STORIES OF THE WEEK

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Social Finance Fund-backed Boann reveals first investments in Canadian impact funds

Federal government-backed, Toronto-based fund-of-funds Boann Social Impact has disclosed its first 13 investments in Canadian impact fund managers.

The recipients include nine social and environmental impact-focused funds, most of which focus on investing in technology startups. This group includes Active Impact Investments, BKR Capital, Cycle H2O, InvestEco, Raven Indigenous Outcomes Funds, Renewal Funds, Sandpiper Ventures, Spring Impact Capital, and The51.

In an exclusive interview with BetaKit, Boann CEO Derek Ballantyne noted that the firm targets impact funds across Canada tackling affordability, climate, and social challenges.

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Government of Canada launches consultations on Budget 2024 proposals

The Department of Finance is asking Canadians and stakeholders to share thoughts on several key proposals, including the capital gains tax changes, the Canadian Entrepreneurs’ Incentive, open banking, cleantech tax credits, and other legislative priorities first revealed in April. The window for consultations on the capital gains inclusion rate and lifetime capital gains exemption is open until Sept. 3, 2024, and the window on all other measures is open until Sept. 11.

The consultations follow months of heated debate in the Canadian tech ecosystem over the budget’s promises.

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Cardata names Haywood Marsh CEO as Canadian tech executive turnover continues through the summer

Amid a year marked by significant leadership changes in Canada’s tech sector, the trend has shown no signs of slowing down over the summer.

The raft of executive changes also includes Unbounce, MindBridge, Ratehub, NowVertical, Top Hat, Untether, Cinchy, Alida, and many more.

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Sonder inks Marriott licensing deal, secures additional liquidity amid continued challenges

Canadian-founded, San Francisco-based alternative lodging company Sonder Holdings has struck a series of deals to secure fresh financing and integrate its listings into hotel giant Marriott International’s system.

They come as the short-term rental provider navigates multiple challenges, including accounting issues and lawsuits, in its push to become profitable and recoup some of the stock value it has lost since its peak.

In an Aug.19 LinkedIn post, Sonder co-founder and CEO Francis Davidson called the Marriott tie-up “a pivotal moment” for the firm, which he believes stands to benefit from the larger hospitality company’s distribution network. He expects Sonder’s latest capital infusion to fuel its efforts to integrate with Marriott and continue the company’s progress towards profitability.

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Two new contracts take off as SBQuantum looks to send its tech to space

Sherbrooke, Que.-based deep tech startup SBQuantum has inked new contracts with the Canadian Space Agency and the European Space Agency to test the company’s quantum sensing technology off the Earth’s surface.

SBQuantum specializes in creating sensors that use a specific type of diamonds, known as nitrogen vacancy diamonds, to measure magnetic fields with a high degree of accuracy. The company uses the quantum properties of these diamonds to develop a quantum magnetometer that can perform magnetic field analysis without requiring precise positioning.

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Get ready for the BetaKit Keynote Stage at SAAS NORTH 2024

For the fourth consecutive year, the BetaKit Keynote Stage will be your front-row seat to the most compelling conversations at SAAS NORTH 2024.

As Canada’s go-to event for scaling SaaS founders and startups, SAAS NORTH has been a staple in the Canadian tech scene since 2016. This year’s conference will again take place at Ottawa’s Shaw Centre from Nov. 13–14.

The speaker lineup is already stacked with some of the biggest names in Canadian SaaS. Founders from across the country will appear at the conference, including Michael Litt of Vidyard, Stephany Lapierre of Tealbook, Andrew McLeod of Certn, Kelsey Hahn of Monark, and Passage’s Martin Basiri.

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Virtual care holds the key to better employee mental health

Canada is facing a mental health crisis, with nearly half a million Canadians missing work each week due to mental health issues, costing an estimated $51 billion annually in healthcare, lost productivity, and reduced quality of life.

Teladoc Health believes technology is essential to help mitigate these numbers. For over twenty years, Teladoc Health Canada has been supporting Canadians with virtual care services including comprehensive mental health programs. It also provides remote technology devices and licensable platform services and currently supports nine million people in Canada through employers, insurers and in hospitals and health systems.

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Join ALL IN 2024: The largest event dedicated to Canada’s AI

Participate in the second edition of ALL IN, the largest event dedicated to Canadian AI, happening in Montreal on September 11 and 12. Building on last year’s success, which brought together over 2,300 AI enthusiasts from around the world, leaders from all sectors will gather again this September to explore the best of Canadian AI.

Led by Scale AI, co-organized with Mila and CEIMIA, and supported by the Canadian AI ecosystem, this must-attend event unites all the community’s pillars—from those who imagine and define AI to those who build and adopt it.

Hear from over 200 speakers, discover the latest AI advancements, engage in live demos, and connect with leading AI solution providers, including Canada’s top 100 AI startups and international delegations from over 40 countries.

Learn More

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Funding, Acquisitions, and Layoffs

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VAN – Borealis Biosciences – $202M CAD
AUS – Aalo Atomics – $27M USD
TOR – AutoTrader.ca parent to be acquired by AutoScout24
TOR – MolecuLight – $11.7M 
MAR – Book4Time acquired by Agilysys for $204M CAD
MTL – YouSet – $3.5M CAD
MTL – Reliant AI – $15.4M CAD 
MTL – MKB closes $145M for third cleantech fund
MIA – Tmrw – $1.8M CAD 

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The BetaKit Podcast

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CEO roundtable: Shopify, Wealthsimple, Lightspeed, Koho, Ecobee

“The world is loopy. Everything is a cycle. Everything is a product of compounding changes.”

Summer is almost over, so hear from these Canadian tech leaders as you prepare to get back to work in September. Featuring insights from Michael Katchen (Wealthsimple), Daniel Eberhard (Koho), Dax Dasilva (Lightspeed), Stuart Lombard (Ecobee), and Tobi Lütke (Shopify).

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Teladoc Health Canada releases study that shows over 78% of Canadians find accessing mental health support in the health care system a challenge

Teladoc Health Canada, a leading provider of virtual healthcare services, recently partnered with Modus Research to survey over 1,600 Canadians to shed light on the mental health needs of Canadians and the persistent challenges they face in accessing support.    

Key highlights:   

• 71% would be more likely stay with an employer who fully supported their mental health needs   

• More than 78% who accessed mental health support report that navigating the health care system to find this support was “somewhat difficult” or “very difficult”   

• 53% found it challenging to locate a professional who can effectively help them.

Of those who received care, only 28% had high levels of confidence in their diagnosis   

For more information, please visit https://www.teladochealth.ca/expert-care/mental-health/

Feature image courtesy Josh Carter via Unsplash.

The post Tech layoffs drag down the dog days of summer first appeared on BetaKit.

Summer’s almost over. You can feel it.

So with your regular cohosts of The BetaKit Podcast looking to squeeze out a few final drops of sunshine before September comes, it once again befalls podcast producer and editor Jess Schmidt to do our dirty work.

“The world is loopy. Everything is a cycle. Everything is a product of compounding changes.”

And she has put together a doozy, featuring the combined wisdom that some of the most impactful tech CEOs in Canada have brought onto the podcast in the last year, based upon their experiences at Shopify (Tobi Lütke), Wealthsimple (Michael Katchen), Lightspeed (Dax Dasilva), Koho (Daniel Eberhard), and Ecobee (Stuart Lombard).

Of course, these choice cuts are merely a taste. If you’d like to enjoy the full-course meal, click on the links below to find the featured episodes.

• Tobi Lütke finally comes on the BetaKit Podcast
• How Dax Dasilva plans to get Lightspeed to $1 billion in revenue
• Wealthsimple and Koho CEOs talk productivity, entrepreneurship, and financial innovation
• After Ecobee, Stuart Lombard has no regrets

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

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Visit AWS Activate to get started.

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy INNOVATEwest.

The post CEO roundtable: Shopify, Wealthsimple, Lightspeed, Koho, Ecobee first appeared on BetaKit.

Vancouver-based Borealis Biosciences has emerged from stealth with $150 million USD ($202 million CAD) in backing from San Francisco-based founding investor Versant Ventures and Swiss pharmaceutical company Novartis. 

Borealis will be working out of the former 23,000 square foot Chinook operating site in Vancouver.  

First reported by The Globe and Mail, Borealis said in a statement that Versant and Novartis worked together to launch the independent company around key members of the Chinook Therapeutics research team. Chinook Therapeutics, a drug development company specializing in kidney diseases, was also launched by Versant in 2018 and featured backing from Canadian investment firms like Amplitude and Northleaf Capital Partners.

Chinook went on to list on the Nasdaq in 2022, before Novartis acquired it last year for $3.5 billion USD and made it a Novartis company. Fierce Biotech reported just a few months later that, under Novartis, one of Chinook’s kidney treatments showed significant positive effects in a study, allowing it to look towards United States Food and Drug Administration (FDA) filing. 

In the same vein as Chinook, Borealis was founded to work on RNA therapeutics that could address unmet needs for patients with kidney diseases. Borealis said this includes an improved understanding of patient stratification, genetically defined targets, requirements for delivery of therapeutic payloads to specific kidney cell types, and RNA chemistry advancements.

RELATED: Agilent Technologies agrees to buy Biovectra for $1.3 billion CAD

“We’ve recognized over the last six years that some of the most validated targets for kidney disease have been out of reach with traditional modalities,” Versant managing director Jerel Davis said in a statement. “Borealis has the potential to address these targets and reach patients most in need.”

For its part, Novartis committed $100 million USD in upfront and near-term research funding. As part of the agreement, Novartis will have the option to acquire two future development-ready programs from Borealis for up to $750 million. 

Borealis said that its initial 25-person team has worked at the forefront of kidney research and RNA therapeutics for more than a decade, and that it will be working out of the former 23,000 square foot Chinook operating site in Vancouver.  

Feature image courtesy of National Cancer Institute via Unsplash.

The post Borealis Biosciences emerges from stealth with $202 million CAD from Novartis and Versant first appeared on BetaKit.

Starting in September, Canada’s federal departments are obliged to implement an updated hybrid schedule, which stipulates public servants must be in the office for a minimum of three days a week.

The news was not well received, particularly as just last year the shift to twice a week in-person schedule prompted 155,000 Public Service Alliance of Canada members to walk off the job in a move their union called a “watershed moment.”

Research over the last three years makes it clear that Canadian workers value hybrid models. According to a KPMG workplace survey of over 2,000 Canadians, 77 percent want the flexibility to work in the office or from a remote set-up.

Canadian roles to apply for today

Senior Cloud Software Developer, Thales, Ottawa

Swift Developer – AI Trainer, DataAnnotation, Remote

Canada’s flexibility paradox

In newer research presented by Scoop, it was revealed that compared to other countries, Canadian workers have it pretty good—on paper at least.

The study found that some 84 percent of Canadian firms offer work location flexibility, compared to just 69 percent of. companies in the US.

However, Canadians tend to spend more time physically in the office. In the US, companies require employees to spend an average of 2.5 days a week in the office on average, but in Canada, that figure rises to 2.68 days.

So although more Canadian businesses provide flexible work schedules, they also expect hybrid workers to come in more frequently.

Fully-flexible location working is also rarer at Canadian companies, with just 16 percent of companies offering fully-remote, versus 31 percent of American companies.

Structured hybrid setups, which include minimum days a week, minimum percent of time, specific days and weeks, and minimum and specific days models, is favoured by most Canadian companies (67 percent).

Comparatively, the US preference is more evenly split between structured hybrid (37 percent), employee’s choice or fully remote (32 percent), and full-time in-office (31 percent).

Only three percent of Canadian structured hybrid companies choose specific days or weeks to be in-office, although 96 percent of them have a minimum day component in their model.

Company size matters too. The report found that the smaller a company is, the more flexible it is. Less than 20 percent of Canadian businesses with 500 or more employees are fully flexible, compared to the majority of businesses with fewer than 500 employees.

Three more Canadian roles hiring now

Team Lead JAVA – Francophone, CGI, Montréal

Generative AI Security Architect, Intact, Toronto

Commerce – Customer Technology Lead, Accenture, Toronto

Flexibility by sectors

The financial services sector in Canada is identified as the most flexible, with technology came in at second place. The public sector ranked third, and professional services ranked in fourth place. In each of these sectors, at least 92 percent of companies offer workplace flexibility.

Consumer goods, energy, healthcare and biotechnology, construction, and education sectors followed, with 84 percent to 89 percent of companies offering workplace flexibility, according to the study.

American and Canadian companies agree that their workforces need flexibility, but they differ on where and how much.

These varying approaches to hybrid and remote work highlights the ongoing evolution of workplace policies and the need for organizations to strike a balance between employee preferences and operational requirements.

As the landscape continues to shift, it will be important for companies to closely monitor trends and employee sentiment, and to adapt their policies to remain both competitive for talent attraction, and to be supportive of their existing employees for retention.

If this doesn’t sound like the organization you work for, and flexibility is important to you, it could be time to find something new.

Ready to find your next tech role in Canada? Visit the BetaKit Job Board today

Feature image courtesy Unsplash.

The post Canada may lead the US on workplace flexibility, but there’s a catch first appeared on BetaKit.

One of the co-founders of Toronto-based human resources software startup Humi has raised Series A financing for his latest venture: nuclear power startup Aalo Atomics.

Austin, Texas-based Aalo announced earlier this month that it has raised $27 million USD. The round was co-led by pre-seed and seed focused VC firm Fifty Years and SpaceX backer Valor Equity Partners, with participation from Harpoon Ventures, Crosscut, SNR, and Alumni Ventures, among others.

“Being from Ontario, which is mostly nuclear powered, I always knew nuclear was incredible, but I wasn’t sure if it would be possible to build a successful business in it.”

This is Aalo’s second fundraise in the last 16 months. The startup raised $6.26 million USD in seed financing in April 2023.

Aalo wants to bring down the cost of nuclear power under the leadership of Canadian co-founder and CEO Matt Loszak. Back in 2016, Loszak and Kevin Kliman co-founded Humi, which offers human resources, payroll, and benefits software for Canadian businesses. Kliman still serves as Humi’s CEO.

In an emailed statement, Loszak told BetaKit that he was Humi’s technical co-founder, who helped to build the startup’s minimum viable product. He then went on to work on Humi’s marketing and product efforts.

For six years, Loszak helped build Humi, growing it to a staff of 150 people. He became interested in cleantech and is now based in Austin, but remains a member of Humi’s board, according to his LinkedIn page. Loszak said Kliman was also an early investor in Aalo.

RELATED: HR tech startup Humi acquires SaaS scheduling startup Ameego

“Many of the early-stage Humi investors were involved in Aalo’s seed round as well, including many that we met at [Y Combinator] in [San Francisco],” Loszak added.

Loszak graduated from the engineering physics program at Queen’s University. He told BetaKit his goal with starting Aalo was to take what he learned about software and business at Humi and eventually return to his roots to start a more technical company.

“Being from Ontario, which is mostly nuclear powered, I always knew nuclear was incredible, but I wasn’t sure if it would be possible to build a successful business in it,” he said.

After some months researching clean technologies, such as carbon capture, solar, wind, grid storage, geothermal, hydrogen, and nuclear, he found nuclear to be one of the most “polarizing” topics in the cleantech space.

“Some people think it’s the only thing that can ‘save us’ from global warming, while others think we shouldn’t touch it with a ten-foot pole,” Loszak wrote in a 2022 Medium post.

He noted the main criticisms toward nuclear energy were the high cost of the resource compared to oil and gas. He said he believes this is driven by several factors, including the complexity of nuclear power, a lack of government support, a lack of standardization and experience, over-regulation, and the presence of what he deemed to be “dinosaur companies” in the nuclear sector.

“Nuclear is the most misunderstood technology that I’ve ever come across, and I think it’s inevitable that it will play a huge role in powering humanity’s future,” he told BetaKit. “The only question is how soon that transition will happen, and we’re doing everything we can to accelerate it.”

Aalo was incorporated in 2022. Its first product, currently in development, will be a reactor called the Aalo-1, which is inspired by the Idaho National Laboratory’s Microreactor Applications Research Validation and Evaluation (MARVEL) microreactor. According to the laboratory, MARVEL is expected to come online as soon as late 2026.

Aalo claims its nuclear technology will be able to reduce costs and improve safety by using a combination of metallic coolant and uranium zirconium hydride (UZrH) fuel. According to the company, the metallic coolant extracts heat from the reactor core more efficiently than current technology, which it claims could enable Aalo reactors to produce up to 10 times more energy than similarly sized technologies. 

The company says UZrH fuel automatically shuts down if it overheats, which Aalo says allows for simplified safety systems and further cost reductions. The company also asserts that its modular reactor design facilitates faster on-site assembly, with factory-pre-assembled modules intended to minimize construction time and costs.

In the last nine months, Aalo has claimed that it has finished conceptual design of the Aalo-1. Its current team includes leaders from the MARVEL program. 

The startup has also signed a memorandum of understanding with the United States Department of Energy, which it called the first step towards deploying an experimental reactor at the Idaho National Laboratory site. 

It has also submitted a regulatory engagement plan to the US Nuclear Regulatory Commission, with agreement from a first potential customer.

Feature image courtesy Aalo Atomics.

The post Humi co-founder’s nuclear power venture closes $27-million USD Series A first appeared on BetaKit.

Montréal-based growth equity firm Mackinnon, Bennett & Company (MKB) has closed $145 million from government investment agencies for its third cleantech fund. 

Fund III will target North American growth-stage businesses commercializing emission-reduction technologies. 

A statement from the federal Canada Growth Fund (CGF) said that it is contributing $50 million to the fund, public pension and insurance investor Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ) are investing $35 million each, while the Business Development Bank of Canada (BDC), a Crown corporation, is providing the remaining $25 million. 

MKB Fund III will target North American growth-stage businesses that are commercializing emission-reduction technologies in MKB’s areas of focus, which includes clean energy, mobility, built environment, and industrials, CGF said in the statement. 

The statement from CGF is the first official acknowledgement of a third MKB fund. According to Private Capital Journal, MKB launched Fund III with an initial $158-million close in March 2024. BetaKit has reached out to MKB for more information. 

BDC has led both of MKB’s previous funds, while CDPQ and IQ also led MKB’s Fund II as part of the investor syndicate. MKB Fund II targeted $150 million, but ended up closing with $175 million in 2021 to invest in late venture and early growth-stage companies focused on the electrification, decarbonization, and digitization of transportation and energy. 

RELATED: MKB closes $100 million for second cleantech-focused fund

“The Fund’s orientation on late and growth-stage opportunities responds to a critical need in the Canadian market, supporting the often-complex capital requirements of homegrown cleantech ventures and facilitating their expansion,” BDC senior vice-president Paula Cruickshank said in a statement. “This is exactly the kind of market gap BDC is designed to address.”

CGF is a $15-billion fund launched in 2022 with a mandate to invest in scaling Canadian clean technology businesses in the commercialization stage. In its 2023 budget, the federal government announced that the Public Sector Pension Plan Investment Board (PSP Investments) was managing the fund. Last week, the CGF backed Burnaby, BC-based cleantech company Svante with a $137-million CAD ($100-million USD) financial commitment in the form of a convertible note. 

MKB’s portfolio includes carbon removal startup CarbiCrete, electric scooter company Bird, and traffic management company Miovision. Telus bought out MKB’s share of Miovision for $52 million in April 2023.  

Featured image credit Stacey Newman via Getty Images.

The post MKB raises $145 million for third cleantech fund mostly from government agencies first appeared on BetaKit.

Canadian-founded, San Francisco-based alternative lodging company Sonder Holdings has struck a series of deals to secure fresh financing and integrate its listings into hotel giant Marriott International’s system.

These include a 20-year strategic licensing agreement with Marriott and $146 million USD in additional liquidity from various investors to strengthen Sonder’s balance sheet. They come as the short-term rental provider navigates multiple challenges, including accounting issues and lawsuits, in its push to become profitable and recoup some of the stock value it has lost since its peak.

In an Aug.19 LinkedIn post, Sonder co-founder and CEO Francis Davidson called the Marriott tie-up “a pivotal moment” for the firm, which he believes stands to benefit from the larger hospitality company’s distribution network. He expects Sonder’s latest capital infusion to fuel its efforts to integrate with Marriott and continue the company’s progress towards profitability.

These deals come as Sonder navigates multiple challenges on its push to become profitable and recoup some of the value its stock has lost.

These deals come months after Sonder postponed the release of its fourth-quarter and full-year 2023 earnings, citing recently identified accounting errors in past statements. Since then, in response, multiple class-action lawsuits have been filed against the Nasdaq-listed company. Nasdaq has warned Sonder about its late filings, and given the company until Aug. 30 to submit an update to its original plan to regain compliance with the stock market’s listing rules.

Sonder still has yet to publish financial results for any period since Q3 of last year, when it released its earnings in November. The company said it intends to submit an updated plan to regain compliance “as soon as practicable,” but added that it “can provide no assurances as to [the] timing” of when it will file its delayed reports.

Sonder currently operates over 9,000 rental properties, from apartment-style accommodations to boutique hotel rooms, across 10 countries. 

Though it is now based in the United States (US), Sonder has strong Canadian roots. On the back of Airbnb’s success, Sonder was founded in Montréal in 2012 by Davidson, Martin Pecard, and Lucas Pellan under the name Flatbook. In search of international investors, Sonder moved its headquarters to San Francisco two years later and incorporated in the US. But in recent years, Sonder has begun to expand its presence in Montréal once more.

The hospitality industry was hit hard by the COVID-19 pandemic, which led many customers to cancel, postpone, or scale back their travel plans, a crisis that affected both traditional hotels and companies like Sonder and Airbnb. 

RELATED: Sonder faces class action investigation after delaying financial results due to errors in past statements

Though travel demand has rebounded, Sonder has struggled since going public in early 2022 at a $1.9-billion USD valuation via a special purpose acquisition company. As macroeconomic conditions have deteriorated and investor priorities have shifted, the unprofitable Sonder has seen its stock price on the Nasdaq nosedive by nearly 97 percent.

In a push to reshape its business and become profitable, Sonder has undergone multiple rounds of layoffs, trimmed its portfolio, and renegotiated leases. Per Davidson, Sonder has closed down the vast majority of its unprofitable sites over the past six months, leaving the company with a more healthy portfolio of leased assets.

Through this licensing deal, Sonder’s inventory will join Marriott’s portfolio under the “Sonder by Marriott Bonvoy” banner, and in exchange for making its units bookable through the larger Marriott’s website and loyalty program, Sonder will pay royalties to Marriott.

“Benefitting from the extensive distribution, loyalty program and sales capabilities of a global hospitality leader will help us to prioritize our core value drivers, including our unique guest experience, while unlocking significant opportunities for increased revenue and cost efficiency,” Davidson said in a statement.

RELATED: Sonder lays off 14 percent of staff as it targets cash flow positive in 2023

In a statement, Tim Grisius, Marriott’s global officer of mergers and acquisitions, business development, and real estate, noted that the deal will expand Marriott’s portfolio of longer-stay accommodations in key markets globally.

“Marriott has long believed in providing the right product at the right price point for all trip purposes and generations of travelers,” Grisius said. “With the planned addition of Sonder by Marriott Bonvoy, we will be able to provide guests seeking apartment-style urban accommodations with even more options in the Marriott Bonvoy portfolio.”

Sonder’s $146 million in additional liquidity consists of $83 million from existing lenders, commitments for $43 million in preferred equity from existing noteholders, and $20 million from other sources. Sonder expects to have access to this funding “over the coming months.”

Investors have reacted favourably to these deals. Since they were announced Aug. 19, Sonder’s shares have more than doubled, rising 150 percent to $6.55 at time of publication.

Feature image courtesy Sonder.

The post Sonder inks Marriott licensing deal, secures additional liquidity amid continued challenges first appeared on BetaKit.

Markham, Ont.-based Book4Time has been acquired by Alpharetta, Ga.-based Agilysys for $150 million USD ($204 million CAD), the companies announced Tuesday. 

Founded nearly 20 years ago by Roger Sholanki, Book4Time is a software-as-a-service (SaaS) company that provides revenue and spa management for the hospitality and wellness industries.

The acquisition will increase the portfolio of digital products and services Agilysys offers customers globally.

Book4Time manages guest experiences at spas, hotels, resorts, casinos, golf and private member clubs in more than 100 countries. It counts major hotel chains among its clients, including Hilton, Marriott International, Hyatt, and Four Seasons, according to its website. 

Sholanki said in a statement that Book4Time is “excited about the opportunity to join forces” with the Agilysys team. 

“The technology innovation strengths of Agilysys and the broad range of state-of-the-art solutions in their portfolio, including membership and golf, exponentially elevates the value we can deliver to clients,” he said. 

The acquisition will increase the portfolio of digital products and services Agilysys offers customers globally, according to the press release.

Agilysys CEO Ramesh Srinivasan said the two companies share some major customers, including Marriott and Hilton, but that in general, there is “minimal overlap” of properties in their customer bases. He added the deal would “introduce additional software solutions to a wider range of existing customers.”

United States-based Agilysys was founded in 1963 and trades on the Nasdaq exchange. It operates in the hospitality industry and also serves the healthcare and higher education sectors, as well as airports, senior living facilities, and stadiums. It offers digital solutions for point-of-sale, inventory and procurement management, loyalty programs, workforce management, and property management. 

The company operates across North America, Europe, the Middle East, Asia-Pacific, and India. It counts cruise liner Royal Caribbean, Mandarin Oriental Hotel Group, and British premier football club Everton as its customers, according to its website. 

Feature image courtesy Unsplash.

The post American hospitality tech firm Agilysys acquires Book4Time for $204 million CAD first appeared on BetaKit.

The CEO of Winnipeg-based SkipTheDishes has announced the food delivery tech firm and its parent company, JustEat Takeaway.com, is laying off hundreds of workers in Canada following a “comprehensive review” that has led to a restructuring of the business. 

SkipTheDishes CEO Paul Burns shared the news in a LinkedIn post this week, saying that layoffs will affect approximately 100 Skip employees and 700 Canada-based employees of JustEat Takeaway. Burns said that the cuts were “necessary to ensure we have the right resources and organizational structure in place to drive sustainable growth.” 

“These decisions were not made based on the quality of their work or the contributions they have made to our business, brand, and culture, but on how closely roles map to our future vision,” Burns added. 

SkipTheDishes is coming off a tumultuous 2023 that saw three people take on the company’s CEO role, starting with the replacement of Howard Midgal in March 2023, who departed to lead JustEat’s Grubhub subsidiary after just five months as the head of SkipTheDishes. Midgal’s successor, Steve Puchala, retired after just nine months on the job, leading to the external hire of Burns in December 2023. Burns previously acted as the managing director of Twitter Canada. 

RELATED: Fantuan acquires Chicago-based Chowbus’ delivery business to fuel US presence

SkipTheDishes was founded in 2012 in Saskatoon, but has long had its headquarters in Winnipeg. The company was acquired by United Kingdom-based Just Eat in 2016 for $110 million, before being merged into Dutch food delivery company Takeaway.com in 2020. 

SkipTheDishes’s last wave of layoffs in 2022 also followed a “comprehensive review” at JustEat Takeaway, and affected 350 employees. 

After pandemic-fuelled growth, the four largest food delivery companies in the United States and Europe,—Deliveroo, Just Eat Takeaway, Delivery Hero and DoorDash—have taken more than $20 billion USD in combined operating losses since they publicly listed, the Financial Times reported earlier this year. 

Feature image courtesy SkipTheDishes. 

The post JustEat, SkipTheDishes lay off 800 Canada-based employees following “comprehensive review” first appeared on BetaKit.

Canadian-founded, Miami, Fla.-based Tmrw has secured $1.8 million CAD ($1.3 million USD) in pre-seed funding to make global peer-to-peer payments easier with Bitcoin.

Tmrw is developing a social payments app coupled with physical Bitcoin ATMs installed with its software. Its solution is designed to offer a faster, cheaper alternative to traditional cross-border remittance services provided by legacy players like Western Union.

Ramdial called today’s fundraising environment “gnarly.” 

The startup claims it will let users in the United States (US) send money to friends and family in the Caribbean and Central and South America using Bitcoin, which they can then withdraw in cash whether or not they have a bank account. 

“We think of what we’re building as kind of like a payments logistics company,” Tmrw co-founder and CEO Ari Ramdial told BetaKit in an interview.

Raised via simple agreement for future equity, Tmrw’s pre-seed round closed in June and marks the company’s first external funding to date. The financing was led by Maple VC with support from Bitcoin startup entrepreneur and investor Brad Mills and other undisclosed Bitcoin angels.

The startup plans to use this funding to build out its product, which relies on Bitcoin’s Lightning Network, and bring it to early users in key markets.

The Bitcoin startup was founded in 2021 by two Canadians, Ramdial and CPO Alexandra Lutchman. This is not the pair’s first foray into the crypto world: they previously launched and led venture-backed, Montréal-based insured digital asset custodian Knox Custody.

Ramdial said he left Knox in early 2019, after just over a year for personal reasons, noting that Lutchman followed months later. “I loved what we did at Knox, but I found myself wanting to work on a company that was closer to the original mission of helping everyday people connect to Bitcoin,” Lutchman told BetaKit.

Two years ago, Knox partnered with fellow Canadian crypto custodian Tetra Trust, combining its insurance cover with Calgary-based Tetra’s regulated status in a deal that saw Tetra acquire some elements of Knox’s business.

Ramdial said his goal for Knox involved figuring out how to price the risk associated with cryptocurrencies and private key management. “My vision at the time had been to build some sort of Lloyd’s of crypto,” he said, referring to the insurance giant. “Can you price various types of loss events and be the underwriter for the industry?”

RELATED: Canadian Web3 regulations and Coinbase’s year in review

According to Ramdial, his early departure from Knox left him hungry to try again. “I do think I have a bit of a chip on my shoulder for not being able to realize my vision,” he said.

Tmrw is using Universal Money Addresses (UMA)—an open payment standard built on the Lightning Network that enables users to send and receive money 24/7 using UMA-enabled wallets, exchanges, or banks.

On the social side of the equation, Tmrw enables users to add text, GIFs, and images to payments, react with emojis, and share Bitcoin purchases with friends.

Ramdial called today’s fundraising environment “gnarly to say the least.” He noted that Tmrw initially considered raising capital back in 2022, and then the tech and crypto market crashed and it postponed those plans. The company was bootstrapped until this financing. 

“It kind of put everything on ice for almost a year,” Ramdial said.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

The Tmrw CEO described the Canadian venture capital ecosystem as “particularly conservative when it comes to crypto deals, especially consumer [ones].” Ramdial noted that investors in Canada tend to gravitate towards startups building the “picks and shovels” of Web3.

“They want to invest in infrastructure plays, because they can spread their risk around, so as a consumer Bitcoin company, it was really, really fun,” Ramdial said sarcastically.

Tmrw eventually found a suitable match in San Francisco-based Maple. Led by founder and general partner Andre Charoo, who was born and raised in Canada, Maple focuses on Canadian entrepreneurs building in the US.

“A big ambition combined with a unique insight and a new way of doing something are the three main characteristics we look for at Maple,” Charoo told BetaKit. “With Tmrw, using Bitcoin as a remittance to cash, versus Western Union as an example, for people specifically living in dual currencies, really captured our imagination. In addition, creating ‘Venmo for Bitcoiners’ as an initial hook into the market seems very non-obvious to most, which we really like.”

Tmrw’s parent company is headquartered in Toronto, and the startup currently has two Canadian employees, including Lutchman. Going forward, Ramdial noted that the Tmrw plans to build its engineering team in Canada.

RELATED: Kraken appoints Alex Mehrdad as leader of crypto firm’s Canadian operations

The startup’s initial focus is the English-speaking Caribbean, from where it aims to build market share and then expand out. “It’s from where I’m from,” Ramdial said. “We know that region very well. We understand the pain points and problems very well.” From there, it plans to expand into South and Central America.

Charoo noted that he resonated with Tmrw’s goal of providing people living in dual currency regimes like the Caribbean—where his family is originally from—with an alternative means of instantly accessing cash.

“The founders’ insight of connecting cash to the internet by using Bitcoin as rails for global money is revolutionary,” Charoo said. “Having founders with firsthand experience who grew up in this target market and have the skills to bring this idea to fruition is very special.”

Tmrw’s mobile app is currently available in Apple’s App Store across the Caribbean in private beta. According to Ramdial, it will go live in the US next month.

Feature image courtesy Tmrw.

The post Knox Custody founders close $1.8 million CAD to launch borderless Bitcoin payments with Tmrw first appeared on BetaKit.

Montréal and Berlin, Germany-based data processing software startup Reliant AI has officially launched out of stealth and announced it has raised $15.4 million CAD ($11.3 million USD) in seed funding.

The round was co-led by Inovia Capital and Seattle-based Tola Capital, with participation from angel investor and former Cisco chief strategy officer Mike Volpi. In a statement, Reliant AI said it has raised 18.4 million CAD ($13.5 million USD) in funding to date, with other investors including former Datadog’s Amit Agarwal and Canadian AI pioneer Yoshua Bengio, who both participated in a prior round last fall.

Reliant AI plans to use the funding to hire engineering talent and expand its footprints in Europe and North America. 

Reliant AI says it is developing generative AI-powered data analytics software, initially targeted to the bio-pharmaceutical industry. The startup was co-founded by CEO Karl Moritz Hermann, chief scientific officer Marc Bellemare, and head of commercial Richard Schlegel. Bellemare

Hermann and Bellemare were previously senior research scientists at DeepMind, the AI research lab of Google, according to their LinkedIn pages.

Prior to joining Google, Hermann co-founded and led Dark Blue Labs, which was acquired by DeepMind in 2014.

Bellemare is also a Google Brain alum, has worked at Montreal AI institute Mila, and is an AI chair of the Canadian Institute for Advanced Research, which is leading part of the implementation of the Pan-Canadian Artificial Intelligence Strategy. Schlegel, for his part, was once a director at EY-Parthenon, the global strategy consulting arm of Ernst & Young. 

Reliant AI’s first product, Reliant Tabular, is designed to help life science analysts find scientific evidence for their decisions through automated systematic reviews, asset scans, analyses, and a data platform.

“The sheer amount of menial labor involved in data-intensive industries today means that many highly skilled professionals are focused on wrangling data, rather than solving complex issues,” Hermann said in a statement. He said the AI system is specific to the life sciences and will be able to “radically grow its capacity to perform research at scale.”

RELATED: Radical Ventures launches $800-million USD AI growth fund

In its statement, Reliant AI said the Tabular offers machine learning models that are “optimized to be experts” in biopharma topics, an easy user interface, and answers in a report-ready format.

On its website, Reliant AI claims the product allows researchers to perform asset scans 4.8 times faster than by hand, and makes 10 times fewer errors than the average analyst or general purpose AI software.

“We see a significant market opportunity in the pharmaceutical sector, as companies strive to build and partner with new entrants to develop innovative solutions like those offered by Reliant AI,” Steve Woods, partner at Inovia Capital, said in a statement. “This notable demand in a large and growing market underscores the potential of AI to drive impactful advancements in the biopharma industry.”

Reliant AI plans to use its seed funding to hire engineering talent and expand its footprints in Europe and North America. 

TechCrunch reported today that the startup has chosen to buy its own AI hardware instead of renting from a larger provider, and is now focused on proving that its technology can pay for itself.

The company’s first product is currently available for demo. A spokesperson for Reliant AI told BetaKit the company is currently developing the application with select partners, is seeing recurring usage of the platform, and is looking to expand to a “substantially larger” customer base later this year.

Feature image courtesy of Reliant AI.

The post Ex-Google DeepMind leaders bring Reliant AI out of stealth with $15.4-million CAD seed round first appeared on BetaKit.

Federal government-backed, Toronto-based fund-of-funds Boann Social Impact has disclosed its first 13 investments in Canadian impact fund managers.

The recipients include nine social and environmental impact-focused funds, most of which focus on investing in technology startups. This group includes Active Impact Investments, BKR Capital, Cycle H2O, InvestEco, Raven Indigenous Outcomes Funds (RIOF), Renewal Funds, Sandpiper Ventures, Spring Impact Capital, and The51.

In an exclusive interview with BetaKit, Boann CEO Derek Ballantyne noted that the firm targets impact funds across Canada tackling affordability, climate, and social challenges.

Boann has now committed nearly $51 million to date across 13 impact funds and one direct investment.

In its push to support the growth of the country’s impact investment ecosystem and draw more private capital into the space, Ballantyne noted that Boann is building a portfolio made up of a mix of first-time, emerging, and established fund managers, with an eye towards underserved regions such as Northern, Atlantic, and Prairie communities.

Boann is one of three fund-of-fund managers chosen by the Government of Canada to deploy the Social Finance Fund (SFF). Boann has now committed nearly $51 million to date across 13 impact funds and one undisclosed direct investment.

The SFF is a long-term, $755-million federal initiative aimed at growing Canada’s social finance market. First announced in the 2018 Fall Economic Statement and launched in mid-2023, SFF is being distributed by Boann, Toronto’s Realize Capital Partners, and Montréal’s CAP Finance.

Born out of Toronto social purpose investment fund manager Encasa Financial, Boann was created as a partnership between the Table of Impact Investment Practitioners, a Canadian network of social finance investors, and Community Impact Investments, the impact investment arm of three affordable housing organizations.

Between 2022 and 2026, Boann is set to receive a total of $154 million in SFF funding. This includes $135 million for impact funds and select direct investments and $19 million to support social finance market-building, including the development and maintenance of an information hub tracking the activities of SFF, its wholesalers, and other social impact investment opportunities.

Boann is also raising another $100 million in private capital for a separate fund, which it will deploy alongside its SFF-backed fund on a “complimentary” basis. According to Ballantyne, Boann’s decision not to blend this private capital with its government funding into the same fund gives it the capacity to assume more risk in certain areas.

Boann and the two other SFF-backed funds-of-funds collaborate with one another. Like Realize, Boann is pan-Canadian, and the two have already co-invested in RIOF and The51 together. Ballantyne noted that the pair largely leave the Québec market to CAP Finance. 

Though capital from Boann does not come with a specific matching requirement, Ballantyne noted that the firm expects to see recipients of Boann funding use it to leverage at least an equivalent amount of private capital. So far, he claimed Boann has seen funds leverage it to secure twice to three times as much.

RELATED: Social Finance Fund-backed Realize Capital Partners reveals first nine investments

Boann’s largest investment to date is the $10 million it has allocated to Vancouver-based RIOF’s first fund. Earlier this year, RIOF completed a $20.4-million first close of a $50-million fund targeting climate and health issues in Indigenous communities. Indigenous-led RIOF will invest in community-driven outcomes contracts, which the firm described as employing a financial model that combines private, philanthropic, and public capital to “drive positive, long-term systemic change.”

“Outcomes financing is relatively new to this country and nobody has done it at scale,” Ballantyne claimed, adding that Boann was attracted to RIOF’s focus, the makeup of its management team, and its “really thoughtful approach.”

Boann has also committed funding to a trio of Vancouver-based venture capital (VC) firms geared towards cleantech. This includes $6 million for Active Impact’s third climate tech seed fund, $5 million for Renewal’s fifth sustainability-focused early growth-stage fund, and $2 million for Spring Impact Capital’s first fund, which will target nascent climate and healthtech startups.

Active Impact vice-president of operations Elyse Crowston told BetaKit that her VC firm wanted to express appreciation for Boann and how its team has navigated pent-up demand for SFF capital. “[Active Impact], like so many of our contemporaries, [has] been earmarking getting Social Finance funding since it was announced years ago,” she told BetaKit in an interview.

RELATED: Raven Indigenous Outcomes Funds completes $20.4-million first close

Late last year, Active Impact secured $70 million in initial commitments for its third, $120-million, Boann-backed climate tech seed fund, while Renewal Funds is gearing up to raise its fifth fund as it undergoes a leadership transition, targeting $100 million.

“We like them both because they’re established managers, low risk, [and] our investment catalyzes the next iteration of their funds—and in Renewal’s case, it’s the first next-[generation] fund,” Ballantyne said.

Crowston noted that Active Impact meshes well with Boann’s climate mandate. She argued that Active Impact’s focus on diversity and inclusion at the startups it backs, and its approach to assessing impact across its portfolio, also make the pair a good match.

“In both directions, it made a lot of sense,” she said.

RELATED: Active Impact Investments launches third climate tech seed fund with $70 million in initial commitments

For Renewal, Boann is playing an important role. “Boann has been great in terms of being a partner [and] early anchor to the Renewal V Funds and really supportive of both the impact goals, which are climate and environmental sustainability-driven, and also supporting new and diverse fund manager teams,” Renewal Funds partner Genevieve Pinto told BetaKit in an interview. “So, [we] really appreciate the role they’re playing in the market, and it’s been really meaningful early support in our process.”

For its part, Spring Impact Capital is raising a $20-million fund for early-stage cleantech and healthtech startups. Ballantyne noted that while Spring has been around for a while, this marks its first fund aimed at catalyzing social impact dollars. He said Spring is “as close as you can get in Canada to a [community direct financial institution]-type approach.”

Elsewhere on the cleantech front, Boann has allocated $3 million to Montréal’s Cycle H2O—a joint venture from H2O Innovation and Cycle Capital—for its first fund. Water-tech-focused Cycle H2O held the initial close of its first $30-million fund this summer, securing an undisclosed amount to advance sustainable water solutions. 

RELATED: Spring Impact Capital launches $20-million fund to back cleantech, healthtech startups

While Boann has made multiple investments in climate tech, Ballantyne said this was the first fund it has encountered focused exclusively on water. “It’s a new mandate, but framed inside an established fund manager,” he added.

Food and AgTech-focused recipients of Boann funding include Calgary’s The51, a women-led VC firm that is getting $2.5 million for its first fund targeting early-stage food and AgTech startups led by women and other underrepresented entrepreneurs. The51 closed $30 million of its $50-million target for this fund last year. The other is Toronto-based InvestEco, which has secured $4 million from Boann for its fourth sustainable food fund for expansion-stage companies.

“Sustainable agriculture and food systems are important to us,” Ballantyne said. “We think they’re some of the key underpinnings of community well-being.” 

Ballantyne noted that Boann was attracted to The51’s gender focus and the strength of its team. As for InvestEco, Ballantyne called them “a tried and tested manager” with a thesis that aligns with Boann’s priorities.

On the social impact side of the equation, Black-led Toronto VC firm BKR Capital is receiving $3.75 million from Boann for its second fund geared towards early-stage Black-led tech startups. “We’re looking at investing in the best founders from the Black community, and we’re looking at showcasing that there is a missed opportunity [here],” BKR Capital co-founder and managing partner Lise Birikundavyi told BetaKit in an interview.

Ballantyne said Boann was attracted to BKR Capital’s management, focus, and the fact that its team now has some experience under their belt following the firm’s first fund, as it gears up to raise $50 million for its second fund.

“We can tell that they are really aligned with us in what it means to intentionally invest to both have social impact and financial returns.”

Lise Birikundavyi, BKR Capital

“We’re definitely grateful to have Boann’s support,” said Birikundavyi. “We can tell that they are really aligned with us in what it means to intentionally invest to both have social impact and financial returns.”

Meanwhile, Halifax-based Sandpiper Ventures has been allocated $4 million for its second fund focused on early-stage startups led by female and non-binary entrepreneurs, for which the woman-led VC firm aims to raise a total of $50 million.

Ballantyne noted, “We like their mission, we like their geographic focus—we don’t have a lot in Atlantic Canada—and we like their thesis.”

The other three recipients Boann has disclosed include Vancouver’s New Market Funds’ second affordable housing fund and revolving loan fund ($7.5 million), Victoria-based social enterprise-focused Thrive Impact Fund’s first fund ($2 million), and Local Investing YYC Cooperative’s third fund ($500,000), in Calgary.

As macroeconomic conditions have deteriorated, with few exceptions, fundraising has become more difficult for tech startups and investors alike, including firms in the impact space.

Ballantyne acknowledged that Boann, the funds it invests alongside, and the managers it backs have been affected. He noted that Boann is seeing many Canadian impact investors take longer to close funds and struggle to hit their targets.

RELATED: GPs and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC in a decade

“I don’t think that’s any different than any other fund in this country right now,” Ballantyne said. “Everybody’s having the same challenge.”

For its part, Boann has slowed its own fundraising timeline for its private capital fund in light of market conditions. Ballantyne noted that Boann would prefer to have had a first close at the end of 2024, but instead, the firm will begin fundraising this fall towards the goal of securing initial commitments around mid-2025.

Despite this challenging environment, Ballantyne said he has seen institutional investor interest in impact funds pick up in certain areas, including gender equality initiatives, funds with climate mandates, and affordable housing-focused vehicles.

“If you can get a viable fund up that has a decent return profile, there are specific thematic cases that we see investor interests coalescing,” he added.

Feature image courtesy Boann Social Impact.

The post Social Finance Fund-backed Boann reveals first investments in Canadian impact funds first appeared on BetaKit.

Canada is facing a mental health crisis, with nearly half a million Canadians missing work each week due to mental health issues, costing an estimated $51 billion annually in healthcare, lost productivity, and reduced quality of life.

Teladoc Health believes technology is essential to help mitigate these numbers. For over twenty years, Teladoc Health Canada has been supporting Canadians with virtual care services including comprehensive mental health programs. It also provides remote technology devices and licensable platform services and currently supports nine million people in Canada through employers, insurers and in hospitals and health systems.

BetaKit spoke with Teladoc’s Deputy Medical Director, Dr. Karolina Filipowska, about the company’s recent report entitled “From Hurdles to Healing: Navigating Mental Health Needs in Canada,” and the role that tech can play in supporting access to care.

The following Q&A has been edited for clarity and brevity.

Why did you want to produce this report now?

If we think back to the pandemic, that difficult time shone an appropriate light on the lack of mental health support so many people desperately needed. 

This shift in public conversation brought the question of mental health needs to the forefront, and I’m so thankful for that as a clinician, and as a human, because it helps lessen the stigma of not feeling well mentally, and it helps normalize seeking out care. So that’s the “why.”

At Teladoc Health Canada, we’ve been providing care in Canada for over two decades, and we’re really, really proud to be able to offer mental health care, and we’re always looking at how we can evolve to better meet the needs of Canadians. The goal in our study was not only to explore these needs past the pandemic, but also to understand what accessing care to meet these needs looks like for many Canadians.

What was the most surprising finding from the study?

The study shows that awareness of mental health issues has increased, but at the same time, there are very real gaps in individuals actually getting the help they need. Alarmingly, 78 percent of those who accessed mental health support describe the process of navigating the healthcare system as somewhat or very difficult. 

What that means is that more than three quarters of people who got help had difficulty getting it. Equally worrying is that more than half (53 percent) said it was a struggle to find a professional who helped them feel better. 

Your research also found more than one in four Canadians sought mental health support last year. Were you surprised by this high number? 

As an emergency physician, I’m not. The number of people who come into the emergency department with mental health related issues is on the rise, and if you think about when you want to first tackle any health problem, it’s not in an emergency state. It’s way before that with appropriate resources and care. 

Generally, we’ve seen a marked increase in individuals requesting immediate health support, which mirrors the broader national trend. So, it wasn’t a surprise, but in looking at the results of our study, it’s striking to see that three out of five Canadians we surveyed have tried to access mental health support in the past five years for themselves or someone in their family. That’s a lot of us in Canada looking for this help.

BetaKit readers work in Canadian tech and innovation, how should this research influence employers who are thinking about how to support and empower healthy employees and teams?

Mental health is a part of health that we should be addressing regularly, and the study shows that employers are perfectly positioned to play a role in their employees’ mental health and well-being.

Not only is it an opportunity to help your fellow humans, if your employee feels good about themselves and has the necessary coping mechanisms to deal with daily stressors, this is directly linked to greater productivity, greater job satisfaction, fewer sick days, and less absenteeism, and the report that we released clearly speaks to this. 

Unsurprisingly, seventy-one percent of study participants said that they have a greater likelihood of remaining with an employer who fully supports their mental health needs. I also believe that individuals who work in tech and innovation will be more comfortable with newer programs and tools that exist to increase accessibility. 

Teladoc is a digital health platform. How can technology help support access to mental health care in Canada?

Teladoc was founded with the vision to create a world where great healthcare is always in reach. This includes mental healthcare, and everyone should be able to receive the best healthcare when they need it, wherever they are.

Over nine million Canadians have access to our platform in Canada through their employers, through insurers, or through provincial healthcare systems. When you pair technology with digital healthcare, patients don’t struggle. For example, we have a product called Mental Health Navigator. This is a service where we navigate the system for you in a way that’s accessible, flexible, and offers confidential options for employees who may otherwise hesitate to seek help.

Virtual care platforms like Teladoc’s virtual Mental Health Care are also flexible. So, if you’re busy with a job, hobbies, a partner, dependents and more, technology provides the flexibility to meet your needs when the time is right for you. It’s not the opposite way around. And you can scroll through our Teladoc app to review the bios of the psychologists and therapists available and choose the one that suits your needs. 

All these features are essential because they remove traditional barriers such as stigma and accessibility and provide a private and convenient way for individuals to get the care they need.

What role do you think employers can play? What’s the connection between mental health support and productive employees and teams?

Mental health significantly impacts productivity and quality of life, and that means it’s imperative for us to simplify access to reliable resources. It’s important to send people to a place that’s trusted and sustainable and to create a supportive environment. 

The key is actually individualizing this for your team. When we’re healthy, both physically and mentally, we work better, and workplaces recognize this and the importance of providing meaningful support, so investment in employee health is going to be crucial.

To learn more about Teladoc’s insights into Canadian’s mental health and employee well-being, read the report here.

Images provided by Santis Health.

The post Virtual care holds the key to better employee mental health first appeared on BetaKit.

Montréal-based YouSet has raised $3.5 million CAD in seed financing, coinciding with the launch of a new product offering aimed at helping consumers bundle insurance policies. 

The insurance marketplace startup raised all of its funding from angel investors via a simple agreement for future equity. Previous investors from YouSet’s 2022 pre-seed raise of $2.1 million CAD led the latest round, which included former Intact executive vice-president Don Fox, former Marsh managing director Neil Mitchell, Canavan Capital principal Joe Canavan, and DuProprio founder Nicolas Bouchard. 

“The part that I personally am most proud of is the quality of investors we got.”

Xavier Freeman

New investors in the all-primary round include the former Axa head of big data Jim Texier, former Aviva senior vice-president Phil Gibson, and serial entrepreneur and investor Dan Robichaud.

In an interview with BetaKit, co-founder and CEO Xavier Freeman said the company chose to pursue angel investors who have either deep experience in the insurance space or with helping other tech companies scale and exit, rather than pursuing institutional investors. 

“Having the investors from the last round reinvest, they were able to introduce us to strategic angel investors within their network, which made it possible to close the round in a really efficient manner without us having to go towards institutional investors just yet,” he said. 

“The part that I personally am most proud of is the quality of investors we got,” he said.

A recent report by the Canadian Venture Capital and Private Equity Association on startup deal flows showed pre-seed and seed-stage companies experienced the steepest declines in investment dollars across all stages in the first half of 2024, falling 64 percent and 45 percent, respectively. 

Because YouSet was able to grow the business through the tech downturn and financiers from the previous round reinvested, Freeman said that instilled confidence in new investors, allowing his company to buck the trend amid a tough fundraising environment.

It took the startup two months to secure the oversubscribed round, closing the financing in early July, Freeman said. YouSet was able to grow its user base from 75,000 two years ago to 250,000 this year and double the size of its team to 20, he added. 

Founded in 2017, YouSet is a licenced insurance broker with an online platform that allows consumers to compare auto, home, and renter insurance policies from more than 50 distribution partners. The company says users fill out a questionnaire online, and claims that in four minutes or less, they can compare rates from major insurers and save nearly 30 percent on policies on average. 

RELATED: Home and auto insurance marketplace YouSet raises $2.1 million, launches in Ontario

As part of the most recent funding round, the company’s latest product allows users to bundle policies from different insurers, such as Aviva, Intact, and Economical Insurance, and purchase a policy directly on YouSet’s platform. When asked why other insurance companies would want to bundle their products with other providers, Freeman said YouSet gives incumbents access to “high quality customers they would not be able to get on their own.”

Freeman said YouSet’s platform solves the painstaking issue of spending hours manually comparing policies online or calling multiple insurance providers to find the best coverage. As a licenced broker, the company generates revenue through commissions on the policies it sells and doesn’t charge to use its platform, Freeman said. 

YouSet is currently licenced in Québec and Ontario, but plans to operate in Alberta and British Columbia by the end of next year. The company will use the funding to expand the sales, customer service, and marketing teams, as well asgrow its network of distribution partners. 

“We would like to be the first place people go when they think about insurance,” Freeman said. 

Feature image courtesy YouSet.

The post Insurtech startup YouSet raises $3.5-million CAD seed round first appeared on BetaKit.

Sherbrooke, Que.-based deeptech startup SBQuantum has inked new contracts with the Canadian Space Agency (CSA) and the European Space Agency (ESA) to test the company’s quantum sensing technology off the Earth’s surface.

Both contracts are being carried out over the summer. A spokesperson for SBQuantum told BetaKit the company is receiving financial remuneration as part of both agreements, but declined to disclose the contracts’ value.

“Years of investment, research and development are now beginning to pay off.”

David Roy-Guay

Quantum sensing uses quantum properties, such as superposition, entanglement, and quantum coherence, to make extremely sensitive measurements of physical quantities.

These measurements can be of time, magnetic fields, temperature, gravity, among other phenomena.

SBQuantum specializes in creating sensors that use a specific type of diamonds, known as nitrogen vacancy diamonds, to measure magnetic fields with a high degree of accuracy. The company uses the quantum properties of these diamonds to develop a quantum magnetometer that can perform magnetic field analysis without requiring precise positioning.

The CSA has selected SBQuantum to test its magnetometer at an altitude of 40 km as part of its stratospheric balloon program, called Stratos. This test will demonstrate the sensor’s ability to gather precise data in extremely cold conditions, as low as -60°C, in a low-pressure environment, and under radiation exposure. 

SBQuantum says its tech can be a good alternative to the heavy infrastructure required by traditional GPS systems.

The ESA has also contracted SBQuantum to explore the potential of its quantum diamond magnetometer technology for use in space. The contract is focused on improving the agency’s understanding of Earth’s magnetic environment. ESA is evaluating both the reliability and precision of SBQuantum’s sensors, as well as how they could be deployed on satellites.

RELATED: Space-tech startup Mission Control shoots for the Moon (and Mars) with funding from GreenSky

“These contracts are further evidence of the tremendous potential of the quantum diamond magnetometers we are commercializing at SBQuantum,” David Roy-Guay, CEO and co-founder of SBQuantum, said in a statement. 

“Years of investment, research and development are now beginning to pay off, as leading organizations in space exploration are acknowledging that our hardware has the potential to provide an important advantage over existing technologies,” he added.

SBQuantum spun out of the Université de Sherbrooke in 2017. This is not the first involvement the startup has had with a national space agency—the startup said in a statement that its quantum magnetometer was tested at National Aeronautics and Space Administration’s (NASA) Goddard Space Flight Center as part of NASA Tournament Lab. 

SBQuantum was also a finalist in the MagQuest Challenge, a competition organized by the United States National Geospatial-Intelligence Agency in partnership with the NASA Tournament Lab. The results of the competition will determine if SBQuantum’s device can be used for mapping and monitoring the earth’s magnetic field moving forward.

In a statement, SBQuantum said these tests may also open doors for other space-based applications of its technology, such as guiding rovers on the surfaces of other planets.

Feature image courtesy of Unsplash. Photo by Vincent Guth.

The post Two new contracts take off as SBQuantum looks to send its tech to space first appeared on BetaKit.

Following months of discourse in the Canadian tech ecosystem on the 2024 federal budget, the Government of Canada has launched public consultations on a number of the budget’s proposals.

The Department of Finance is asking Canadians and stakeholders to share thoughts on several key proposals, including the capital gains tax changes, the Canadian Entrepreneurs’ Incentive (CEI), open banking, cleantech tax credits, and other legislative priorities first revealed in April. The window for consultations on the capital gains inclusion rate and lifetime capital gains exemption is open until Sept. 3, 2024, and the window on all other measures is open until Sept. 11. 

Contact information to consult on general budget measures, as well as specific topics, can be found in the government’s release. 

RELATED: How Canada’s capital gains tax changes might impact Canadian tech

Despite long-held anticipation from Canada’s FinTech sector, no target launch date was set for open banking in this year’s budget. Open banking is a consumer-directed finance system that will allow Canadians to securely share their financial data with third parties, such as FinTech companies, and make it easier to switch financial institutions. 

The 2024 budget earmarked $1 million to the Financial Consumer Agency of Canada (FCAC) to oversee open banking and $4.1 million to the Department of Finance to establish and maintain an open banking framework and oversight entity. 

Keeping with the Liberal government’s long-standing focus on cleantech and the green economy, Budget 2024 also included a new Electric Vehicle Supply Chain tax credit and updates to others. Some measures included expanding eligibility for the clean technology investment tax credit and introducing legislation to deliver the Clean Hydrogen and Clean Technology Manufacturing tax credits. 

The changes to the capital gains inclusion rate and lifetime capital gains exemption has arguably captured the most attention from Canada’s tech ecosystem. In what it has described as an effort to make the country’s tax system “more fair,” the government proposed increasing the inclusion rate on capital gains from one-half to two-thirds. To offset this, the federal government also proposed increasing the lifetime capital gains exemption from $1 million CAD to $1.25 million CAD, which will continue to be indexed to inflation. 

RELATED: Feds reveal new changes to Canadian Entrepreneurs’ Incentive as part of capital gains tax overhaul

Within a day of the budget dropping, more than 750 Canadian technology leaders signed an open letter calling on Ottawa to claw back the capital gains tax changes, which led to Finance Minister Chrystia Freeland to meet with a group of Canadian technology industry leaders. In May, another open letter from a collection of business groups maintained pressure on the federal government to walk back the plans. The government set the stage for the legislation in June, prompting Conservative leader Pierre Poilievre to blame “useless lobbyists” who were “utterly ineffective.”

The federal government also proposed the CEI, which will reduce the inclusion rate to 33.3 percent on a lifetime maximum of $2 million in eligible capital gains. According to the Government of Canada, this incentive was designed with the tech sector in mind and modelled after the qualified small business stock exemption in the United States. 

Originally, the CEI was to be phased in over 10 years and available to entrepreneurs and founding investors in certain sectors who own at least 10 percent of shares in a business that has been their principal employment for at least five years. Last week, the federal government proposed to accelerate the phase-in period of the CEI, scale back certain ownership and engagement criteria, remove the founder requirement, and open eligibility to more small businesses. 

With files from Josh Scott and Isabelle Kirkwood. 

Image courtesy Flickr.

The post Government of Canada launches consultations on Budget 2024 proposals first appeared on BetaKit.

Toronto-based medical imaging technology startup MolecuLight has closed $11.7 million in Series C funding to fuel its international expansion.

The round was co-led by three new investors, including the Crown corporation Export Development Canada (EDC), Prosegur, and Azahar. The round also saw participation from existing investors, but their names were not disclosed in the company’s announcement.

“We are well-positioned to capitalize on the growing demand for point-of-care fluorescence imaging solutions.”

MolecuLight was founded in 2012 by Ralph DaCosta, a research scientist in medical biophysics and principal investigator at the DaCosta Lab at Toronto’s Princess Margaret Cancer Centre. The company has developed fluorescent imaging devices that it claims can detect the presence and location of elevated bacteria loads in wounds, and can therefore help healthcare professionals treat and heal wounds.

The startup offers two devices: the MolecuLight i:X and the MolecuLightDX. While both use fluorescent imaging for bacteria detection, the DX comes with some added features, such as electronic medical record integration options, an administrator workflow and system configuration capability, and a docking system for charging.

The startup says its products can be helpful at every stage of wound care, including assessment, cleaning, debridement (which refers to the removal of unhealthy tissue from a wound), sampling, and treatment.

The Series C round comes two years after MolecuLight raised an undisclosed sum of funding from the Crown corporation arm BDC Capital as well as iGan Ventures. Prior to that round, the startup raised a $7.5-million USD loan from Oxford Finance LLC in 2019, the same year Photonamic acquired the startup’s clinical oncology business.

RELATED: INOVAIT and federal government invest $10.7 million across seven image-guided therapy tech projects

The new funding will be used to help MolecuLight expand in the United States (US), Canada, and European Union, according to a statement from MolecuLight. The startup received authorization to sell its device by Health Canada in 2015, and received clearance to market its device in the US by the Food and Drug Administration in 2019.

According to MolecuLight’s website, the company has teams in Canada and the US, as well as a network of distributors in over 30 countries spanning Oceania, Asia, Latin America, and Africa.

The startup is targeting a number of healthcare settings for its device, including hospital outpatient, independent wound care clinics, podiatrists, and long-term care centers.

“With the support of our investors, we are well-positioned to capitalize on the growing demand for point-of-care fluorescence imaging solutions and deliver exceptional value to our customers,” Anil Amlani, CEO of MolecuLight, said in a statement.

Feature image courtesy of MolecuLight via YouTube.

The post MolecuLight closes $11.7 million in Series C financing for market expansion first appeared on BetaKit.

Thoma Bravo-owned Trader Corporation, which provides automotive dealer software and operates Canadian automotive marketplace AutoTrader.ca, has agreed to be sold to European firm AutoScout24 for an undisclosed amount. 

Munich, Germany-based AutoScout24, which owns and operates various online automotive marketplaces across Europe, said in a statement that purchasing the Toronto-based company will extend its presence outside of Europe and expand its service offerings into automotive dealer software and lender solutions. AutoScout24’s majority shareholder, San Francisco-based private equity firm Hellman & Friedman, will make a “meaningful equity investment” in AutoScout24 in conjunction with the deal. 

Thoma Bravo purchased Trader from Apax Partners in 2016 for nearly $1.6 billion CAD. This past June, Bloomberg reported that Thoma Bravo was exploring the possibility of a Trader sale, and that Trader could be valued at $4 billion CAD, including debt. 

RELATED: Trader Corporation and Freelance strengthen their online marketplaces through new acquisitions

Trader, which was founded in 1975 as a magazine for auto classifieds, said that Thoma Bravo worked with Trader to expand its product portfolio through organic investments and strategic acquisitions. Some of its offerings include automotive dealer software solution AutoSync and automotive finance subsidiary Dealertrack, which it acquired in 2022. 

Trader also recently acquired Collateral Management Solutions (CMS) for an undisclosed amount back in June. CMS provides lien and registration services, recovery services, and insolvency management solutions to Canadian lenders and was expected to improve Dealertrack. 

“Through the application of our software expertise and M&A strategy, we helped transform Trader from an online automotive marketplace to a market leading platform of digital retail solutions for consumers and automotive dealers in Canada,” Thoma Bravo managing partner Holden Spaht said in a statement. “We are confident that AutoScout24 is a great home for Trader, and we look forward to following their continued success together.” 

The transaction is expected to close in the fourth quarter of 2024, according to Trader. 

Feature image by why kei on Unsplash.

The post European online car marketplace AutoScout24 agrees to purchase AutoTrader parent from Thoma Bravo first appeared on BetaKit.

For the fourth consecutive year, the BetaKit Keynote Stage will be your front-row seat to the most compelling conversations at SAAS NORTH 2024.

As Canada’s go-to event for scaling SaaS founders and startups, SAAS NORTH has been a staple in the Canadian tech scene since 2016. This year’s conference will again take place at Ottawa’s Shaw Centre from November 13 to 14.

SAAS NORTH is on the lookout for women to join its coveted Women in SaaS program.

BetaKit Keynote Stage will serve as SAAS NORTH’s main stage for the entirety of the two-day event, featuring sessions co-programmed and moderated by BetaKit. As in previous years, this stage will be the nexus for the leading voices of Canada’s software sector.

This year’s speaker lineup is already stacked with some of the biggest names in Canadian SaaS. Founders from across the country will appear at the conference, including Michael Litt of Vidyard, Stephany LaPierre of Tealbook, Andrew McLeod of Certn, Kelsey Hahn of Monark, and Passage’s Martin Basiri.

SAAS NORTH 2024 will also feature heavy-hitters from Canada’s venture capital sector, including Staircase Ventures’ Janet Bannister, Define Capital’s Narbe Alexandrian, and Maple VC’s Andre Charoo.

SAAS NORTH has already unveiled its 2024 agenda, which includes can’t-miss panels, keynotes, and breakouts, as well as ample opportunities for networking. Some highlights to catch include sessions on avoiding churn, building the founder-investor relationship, finding product-market fit, and leveraging AI to scale your SaaS startup.

Continuing a popular tradition, SAAS NORTH 2024 will also feature the eighth-annual PitchFest, which gives eight entrepreneurs a shot at taking home $10,000 in prize money.

Judges for this year’s PitchFest include Real Ventures’ Katy Yam, Sand Hill North’s Ryan Henry, and L-Spark’s Patrick White, among others.

SAAS NORTH is also on the lookout for women who are shaping the future of Canada’s software industry to join its coveted Women in SaaS program. Perks include a discounted pass to this year’s conference, as well as an optional opportunity to pitch to the Firehood Angels for a $100,000 investment and other in-kind services.

For those planning to attend, BetaKit has your hookup. You can save 25 percent on your tickets to SAAS NORTH 2024 by using the code BETAKITSN24 at checkout. BetaKit will see you there.

Feature image courtesy SAAS NORTH.

The post Get ready for the BetaKit Keynote Stage at SAAS NORTH 2024 first appeared on BetaKit.

Amid a year marked by significant leadership changes in Canada’s tech sector, the trend has shown no signs of slowing down over the summer. Toronto-based software startup Cardata is among the latest to join the wave, appointing Haywood Marsh as its new CEO.

Prior to joining Cardata, Marsh was general manager of Lockpath and executive team member of Lockpath’s parent company NAVEX Global. In these roles, he led a software-as-a-service (SaaS) team across the United States, the European Union, and India, and according to Cardata, turned Lockpath into NAVEX’s fastest growing significant business unit.

Marsh replaces Sheret Ross, who has served in the CEO role since February 2021 and still remains on Cardata’s board, according to his LinkedIn page. Michael Levine remains Cardata’s president, a role he has also held since February 2021.

In a joint statement, Ross and Levine said they were both “filled with excitement and confidence about the future” of Cardata amidst the CEO transition. The reason for Ross’s stepping down was not provided in the company’s statement.

Cardata offers reimbursement software, compliance programs, and business intelligence tools for companies whose employees drive their personal cars for work. Last year, the company secured a $100-million growth investment from Wavecrest Growth Partners with a co-investment from MassMutual Ventures. Chirag Shah, operating partner at Wavecrest, expressed his support for the CEO transition in Cardata’s statement.

RELATED: Cardata raises $100 million for product acceleration

This week, Chris Grouchy, president and co-founder of Toronto-based business-to-business (B2B) trade software startup Convictional, announced he was stepping away after seven years, soon after the company rebranded its original product to Modern Dropship.

Convictional was founded by Grouchy and CEO Roger Kirkness in 2017 as a B2B e-commerce solution to help vendors and brands manage inventory. As Modern Dropship, the company is now a dropshipping platform aimed at helping retailers expand their curated assortments.

“This is a satisfying conclusion to a journey we kicked off in Roger’s apartment years ago. But it also represents a new beginning for Convictional. Roger and our talented R&D team will be working on LLMs and applying them to a totally new domain — business decision-making,” Grouchy said in a post on LinkedIn.

During its run as Convictional, the company raised several rounds of funding, including a $6.7-million Series A round in 2022. “Our dropship platform has consistently proven to be the best solution for retailers looking to manage and scale their curated dropship programs rapidly and confidently, without the need for outdated technology integrations. The new name, Modern Dropship, better reflects this position,” the company said in a statement.

Victoria-based stock media agency Stocksy announced that Trace Cohen will serve in the top job.

Stocksy was co-founded by Bruce Livingstone, a repeat Canadian tech founder who co-founded Stocksy in 2015, and currently serves as chairman of Stocksy’s board. “Creatives have never been so pressed as they are today to get the best and most culturally relevant visuals into their work,” Livingstone said in a statement. “Trace brings an eye for creative brand building and the heart to lead our co-operative.”

RELATED: MindBridge headlines slew of #CDNtech companies making executive leadership changes

Cohen’s previous roles include leading social media strategy at Razorfish, serving as senior vice president of strategy at Publicis, leading global digital marketing for BlackBerry, and serving as CEO of 214, a brand design studio.

London, Ont.-based biotechnology startup Sernova Corp. also has a new face at the helm. The company recently appointed Jonathan Rigby as CEO, replacing Cynthia Pussinen. The reasons for the CEO change were not disclosed in the company’s announcement.

Sernova is developing therapeutic cell technologies that are implanted in chronic illness patients inside its trademarked Cell Pouch System. The company is currently in a clinical trial for its product for Type 1 diabetes.

“As a Type 1 diabetic myself, I am honoured to serve the company and its shareholders as Sernova’s new CEO,” Rigby said in a statement. “I am passionate about Sernova’s mission and determined to lead the Company to realize its full potential. I have financed and grown multiple companies through to exits and my goal is clear; I will work tirelessly with the team to do the same for Sernova and its shareholders.”

RELATED: Swift Medical among the latest #CDNtech companies to appoint new leaders as industry executive turnover continues

Prior to joining Sernova, Rigby held leadership or board positions on other biotech companies, such as Revolo Biotherapeutics, IM Therapeutics, and Oncolytics Biotech.

Toronto-based Banxa Holdings, which offers a cryptocurrency gateway platform for businesses, has appointed Zafer Qureshi to serve as co-CEO with existing CEO and chairman Holger Arians.

Qureshi has served in several roles at Banxa since June 2023, starting as a board observer and corporate advisor, then moving to executive director and head of corporate affairs in August 2023. According to his LinkedIn, Qureshi is retaining his executive director title along with the new title of co-CEO.

“Zafer’s addition to the team has been instrumental in Banxa’s journey over the past 12 months,” Arians said in a statement. “Zafer and I have worked closely to transform Banxa from a loss-making entity into a sustainably profitable business.”

In a statement, Banxa claimed that it reached “sustainable profitability” in March of this year, and has also seen “meaningful de-risking and balance sheet improvement,” and a “significant reduction” in the cost of working capital.

Canada’s venture capital arena also welcomed a new face in the last month. In July, Halifax-based Tribe Network announced that Phillip Yoon joined its team as an investment principal.

Yoon brings over two decades of experience to Tribe as a capital allocation strategist, fund manager in alternative investments, portfolio manager, and investment consultant, where he specialized in both private and public markets.

Tribe Ventures is the venture capital arm of Tribe Network, launched in 2020 to create an entrepreneurship and innovation hub for entrepreneurs identifying as Black, Indigenous, and People of Colour. In June 2023, Tribe launched a targeted $20-million venture capital fund that will invest in pre-seed and seed-stage businesses led by racialized founders.

These organizations are the latest in a long list of Canadian tech startups and organizations seeing changes in executive leadership this year. Montréal-based EdTech startup Paper shifted co-founder Phil Cutler from the CEO role, shortly after the company reportedly cut 45 percent of its approximately 180 head office employees in late July. 

The raft of executive changes also includes Unbounce, MindBridge, Ratehub, NowVertical, Top Hat, Untether, Cinchy, Alida, and many more.

Feature image courtesy Cardata via PRNewswire.

The post Cardata names Haywood Marsh CEO as Canadian tech executive turnover continues through the summer first appeared on BetaKit.

Isabelle Kirkwood wrote a detailed piece this week about changes to the Canadian Entrepreneurs’ Incentive (CEI)—Ottawa’s attempt to rejig the carveout first announced in Budget 2024 that’s designed to offset capital gains tax rate changes. If the modifications were meant to appease those who generally feel scorned by the new measures introduced in this year’s budget, the government gets an incomplete grade.

Startups generally offer lower salaries than large enterprises, but sweeten the deal with stock options to attract talent. Founders get senior operators to help build the business, and upon exit, those employees are rewarded for their hard work. But when they exercise those options now, the capital gains tax rate changes mean the government gets a bigger cut. 

While CEI will now spare “the majority of founding teams” from the tax rate increase, according to Communitech CEO Chris Albinson, their employees aren’t so lucky. Why? Employees rarely own the five percent of the company required to utilize CEI. The same is true for early-stage and angel investors at time of exit. That means less incentives for high-performing workers to join startups, and a higher hurdle for investors to return capital.

Maverix Private Equity founder John Ruffolo told BetaKit, “Taxes on capital do exactly what common sense implies—it reduces the availability of capital as the capital moves to the places of least friction over time.”

While the cutting of the ownership stake from 10 percent to five percent is significant, it’s a half measure that ignores key contributors to entrepreneurship: the investors and the employees. John Oakley, vice-president of taxation at CPA Canada, summed up the modifications best: “Complicated rules (CEI) to mitigate the impact of complicated rules (increase to capital gains) does not do our tax system any favours.” 

Thanks for reading on and ’til next week, 
Bianca Bharti
Newsletter editor

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TOP STORIES OF THE WEEK

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Phil Cutler removed as Paper CEO, startup reportedly cuts staff by 45 percent

Montréal-based EdTech startup Paper has reportedly made more layoffs — the deepest of several rounds of cuts over the past year — this month and shifted co-founder Phil Cutler out of the CEO role.

First reported by The Globe and Mail, co-founder Roberto Cipriani confirmed that Paper cut 45 percent of its approximately 180 head office employees in late July, just a few weeks after Cutler’s CEO chair was taken over by Rich Yang. Yang is a Silicon Valley EdTech veteran, having led Education.com to be acquired by IXL Learning and served as the president of Learneo’s vertical businesses and corporate development. 

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IRCC takes over sole administration of Start-up Visa Program from NACO, CVCA

Canada’s Start-up Visa program is under new leadership as the federal government reviews “ongoing challenges” with the program, BetaKit has learned.

In December 2023 episode of The BetaKit Podcast, Yuri Navarro, the former CEO of NACO who was involved in creating the SUV, explained that the program was intended to take the decision-making process away from the bureaucrats in government and towards investors and incubators who could more expertly determine the viability of an innovative business, though immigration officers would still have the final say.

“Whereas the angel stream and the VC stream had to put money up to support the companies … the incubators didn’t have to, but also were able to charge the companies for services,” he said, adding that this structure has created opportunities for some organizations to “use the program to their advantage,” he added.

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Canadian VC investment grows in Q2 but seed funding a cause for concern

Nearly $2.4 billion CAD in total VC funding was deployed into Canadian technology startups across 143 deals during the second quarter, per CVCA’s latest VC market report. This marks an improvement compared to Q1 on both counts but trails the second quarter of 2023.

On a year-over-year basis, total funding declined by 14 percent and deal count dropped by nearly 16 percent in Q2 2024. Relative to what was a mixed Q1 for Canadian VC funding though, VC investment jumped 85 percent while deal volume increased by only five percent.

In a statement, Furlong said this performance was “driven by investors doubling down on companies with proven track records and strong fundamentals,” reflecting what many VCs have dubbed a ‘flight to quality’ amid the tech downturn.

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Kraken appoints Alex Mehrdad as new leader of crypto exchange’s Canadian operations

Alex Mehrdad recently took the reins as the San Francisco-based company’s general manager of Canada from former Canadian managing director Mark Greenberg, who was promoted earlier this year to leading Kraken’s newly established global asset growth and management division.

The move follows a period of growth in Canada for Kraken, which began building a dedicated Canadian team in fall 2022, committed to working with Canadian securities regulators early last year when it filed a pre-registration undertaking, including a ‘coming-out party’ in August 2023 alongside Coinbase at Toronto’s Blockchain Futurist Conference.

Kraken claims that over the past year, under Greenberg’s leadership, it has doubled the size of its Canadian business. “What happened is Kraken Canada was a big success within Kraken,” Mehrdad told BetaKit in an interview at this year’s edition of the Blockchain Futurist Conference.

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BC Securities Commission panel finds ezBtc diverted customer funds to gambling, personal accounts

The BCSC panel has found that Nanaimo, BC-based cryptocurrency trading platform ezBtc committed fraud by lying to its customers and diverting approximately $13 million of customer assets to gambling and the personal accounts of owner David Smillie. BCSC had first acknowledged that it received complaints about ezBtc in 2019 before officially bringing its allegations forward in May 2023.

In one case, BCSC found that a customer’s bitcoin deposit was transferred to a gambling website within 14 minutes.

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Funding, Acquisitions, and Layoffs

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BUR – Svante – $137M CAD 
VAN – Well Health plans to spin out SaaS business
CGY – CruxOCM – $23.3M CAD
TOR – Radical Ventures – $800M USD
TOR – Sampler files for bankruptcy
OTT – Feds fund $39.2M for CanCode program
OTT – NGen invests $21.4M across 15 projects
OTT – MaxBounty acquired by Mrge
HFX – Sona acquired by Celero Commerce
HFX – QuickFacts – $2M CAD

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The BetaKit Podcast

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Canadian Web3 regulations & Coinbase’s year in review

“I think it’s really important for Canadians to speak to their public officials and remind them that this is an important industry. They should be taking it seriously. They should be putting in the time to speak with industry and learn about it.”

Live from the Blockchain Futurist Conference, award-winning BetaKit reporter Josh Scott moderates two important conversations: a year in review with Coinbase Canada CEO Lucas Matheson; and a Canadian Web3 regulation check-in with Dan Nuñez Cohen (Crypto.com), Kunal Bhasin (KPMG), Morva Rohani (Canadian Web3 Council), and Suzanne Lasrado (CIRO).

Feature image courtesy Burnout Stock photos by Vecteezy

The post Canadian entrepreneurs get new incentives, but what about their employees (and investors)? first appeared on BetaKit.

I’m currently on vacation in an undisclosed location, and my co-host Rob Kenedi hasn’t been heard from since our AMA episode where he tried to explain a hiring graph… with another hiring graph.

“I think it’s really important for Canadians to speak to their public officials and remind them that this is an important industry. They should be taking it seriously. They should be putting in the time to speak with industry and learn about it.”

Thankfully, some members of the BetaKit team have been working hard this week. Like award-winning reporter Josh Scott, who moderated two different conversations at the Blockchain Futurist Conference,

Which was part of CanadaCryptoWeek.

First, Josh sat down with Coinbase Canada CEO Lucas Matheson to reflect on how Coinbase and the crypto industry have evolved in the Canadian market. Following that, Josh moderated a panel conversation on the state of Web3 Regulations in Canada with Dan Nuñez Cohen (Crypto.com), Kunal Bhasin (KPMG), Morva Rohani (Canadian Web3 Council), and Suzanne Lasrado (CIRO).

Enjoy Josh’s labours while I enjoy a refreshing pina colada and Rob—well, I just hope he returns from that three-hour tour.

Subscribe: Apple Podcasts, Spotify, YouTube, Overcast, Pocket Casts, RSS

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Jess Schmidt. Feature image courtesy Blockchain Futurist Conference.

The post Canadian Web3 regulations & Coinbase’s year in review first appeared on BetaKit.

Summer is in full swing, and the tech industry is heating up with fresh opportunities. Whether you’re a seasoned professional or a recent graduate eager to dive into tech, this month could be the perfect time to make your next career move.

From startups to more established players, companies are searching for top talent to join their ranks. Here are three organizations on the hunt for Canadian tech workers. 

Check out all the organizations recruiting at Jobs.BetaKit for more opportunities.

CMiC

Computer Methods International Corp. (CMiC) is a software firm that develops enterprise financial management systems for the construction and engineering sectors. The company is looking for a sales development representative to prospect and qualify leads and opportunities for CMiC’s software solution.

Responsibilities for the role include prospecting outbound and inbound clients, prioritizing and organizing the lead pipeline, and building out multi-channel campaigns along with management and account executives.

Those interested in the position should have sales experience and great communication skills, but the role does not have a minimum experience requirement. Familiarity with the construction industry and social selling are preferred for this position, but also not required.

Learn more about the role on CMiC’s job board here.

Hunter Hub, University of Calgary

The University of Calgary’s Hunter Hub for Entrepreneurial Thinking is on the hunt for an executive director. The hub was established to foster student entrepreneurship at the university, as well as spur innovation within the school’s faculty. 

The executive director will be responsible for leading the strategic direction for the Hunter Hub, providing leadership to the development of any future space plans, and developing and regularly reporting on metrics and outcomes for the hub, among other duties.

The successful candidate will hold an undergraduate degree in a related field with a minimum of ten years’ experience in an entrepreneurial environment. A master’s degree and familiarity or experience working in a post-secondary setting are assets for this role. 

Learn more about this position on the University of Calgary’s job board here. 

NWS Next

North Carolina-based telecommunications infrastructure firm NWS Next is looking for a senior national account manager to join its team remotely from anywhere in Vancouver, Alberta, Quebec, or Ontario. The salary range for this role is $100,000 to $150,000. 

Responsibilities include achieving and exceeding established monthly sales and call quotas, developing sources of sales leads, and prospecting for new opportunities through telemarketing, cold calling, and lead referrals. This position also involves keeping records up to date in the company’s customer relationship management software, providing forecasts and activity reports as required, and attending regular sales meetings, training, and performance review sessions.

The successful candidate will have at least five years of experience in a sales or account management role within the IT or telecommunications sector. Familiarity with selling products or services with a sales cycle of three to six months, and a university degree in engineering, IT, data networking, marketing, business administration, or a related field are strong assets.

Learn more about the position on NWS’ job board here.

Feature image courtesy Unsplash. Photo by Hannah Morgan.

The post Summer hiring alert: Here are three organizations seeking tech workers in Canada first appeared on BetaKit.

Halifax-based QuickFacts has raised $2 million CAD in seed funding to launch its insurance brokerage workflow platform in Québec and the United States (US). 

The all-equity funding round was led by Sandpiper Ventures with participation from St. John’s, Nfld.-based Killick Capital, New York City-based fund InsurTech NY, and numerous angel investors, including Sparkasa Capital managing director Paul Hill, former Aviva managing director Phil Gibson, and former Marsh Canada managing director Neil Mitchell. 

Rhiannon Davies from Sandpiper and Hill will each receive a seat on QuickFacts’ board, with another seat being added in the coming months, co-founder and chief revenue officer Jeff Barsalou told BetaKit in an email statement.

Founded in 2020 by Jeff and his wife, president and CEO Christy Barsalou, QuickFacts’ platform aggregates insurance-carrier underwriting information for brokerages, compiling it into a single searchable database that compares carrier information.

The startup said it currently employs 19 people and will use the capital to hire four additional employees that will help it complete its Canadian expansion, break into the US market, facilitate the addition of new product lines, and “explore possibilities with its vendor and carrier partners.” 

RELATED: Foxquilt raises $12 million to expand small business insurance solution in North America

In a statement, Christy claimed that US brokerages are experiencing similar pain points to Canadian ones, but on a much larger scale due to market and state differences. She added that using technology is important for brokers to keep pace with rapid carrier information changes. 

When QuickFacts first launched in 2022, it was only available in Ontario and Atlantic Canada, before expanding to Alberta in May 2023. In June 2023, QuickFacts raised $1.13 million CAD in convertible debt to help continue the startup’s expansion across Canada. Jeff told BetaKit that QuickFacts has since expanded into Manitoba, Saskatchewan, and British Columbia.

QuickFacts claimed it has experienced a period of rapid growth in the past year, having tripled its number of active users in the past year, which allowed the startup to reach 100 brokerage clients and 2,500 users, as well as forge partnerships within the brokerage industry.

Feature image courtesy QuickFacts. 

The post InsurTech platform QuickFacts secures $2 million to continue North American expansion efforts first appeared on BetaKit.

Burnaby, BC-based cleantech company Svante has received a $137-million CAD ($100-million USD) financing commitment from the federal government’s cleantech-focused Canada Growth Fund (CGF).

The commitment, which takes the form of convertible notes, is aimed at ramping up the development and construction of Svante’s commercial carbon capture and removal projects in Canada and the United States.

“Svante has a tremendous market opportunity, globally and here at home.”

Patrick Charbonneau, CGF

According to a statement from Svante, CGF will invest through an initial $68-million CAD ($50-million USD) tranche, which will be used to accelerate and de-risk Svante’s current commercial projects.

The remaining half will be made available for Svante to draw upon for future carbon capture, utilization, and storage projects.

Founded in 2007 initially as Inventys, Svante develops filters and machines that capture and remove carbon dioxide from industrial emissions and the air. The company rebranded to Svante in 2019, and currently has four pilot plants in North America, including one in British Columbia, one in Saskatchewan, and two in California.

Svante has raised over $600 million CAD since its founding, most recently closing $435 million CAD ($318 million USD) in a Series E financing round led by Chevron New Energies, the oil and gas behemoth’s climate-focused fund. Svante was also one of 13 Canadian tech companies named to the 2024 Global Cleantech 100 list in January.

The company is currently constructing a 141,000 sq.-ft. facility in Burnaby, which it claims will produce filters capable of capturing 10 million tonnes of carbon dioxide each year. The facility will also serve as Svante’s global headquarters and R&D centre, when completed. Svante has already invested nearly $200 million into the facility to date, according to a statement from the federal government.

“Svante has a tremendous market opportunity, globally and here at home, and we look forward to supporting this company in its growth,” CGF president and CEO Patrick Charbonneau said in a statement.

RELATED: BC’s Centre for Innovation and Clean Energy invests $7.6 million across nine companies following call for innovation

The first tranche of the CGF funding will be disbursed immediately, while the second tranche can be drawn from subject to the approval of both organizations. The proceeds from the first investment tranche will be used by Svante for commercial development and what Svante described in its statement as “first-of-a-kind project funding.”

“This will strengthen our integrated project development services offering to help our customers de-risk [first-of-a-kind] projects by providing both our in-house project development advisory expertise and financing,” Svante president and CEO Claude Letourneau said in a statement.

This is not the first time the federal government has funded Svante. In 2021, the government provided Svante with $25 million CAD to support the commercialization of its carbon capture technology.

CGF is a $15-billion CAD fund launched in 2022 with a mandate to invest in scaling Canadian clean technology businesses in the commercialization stage. This investment marks CGF’s first venture in British Columbia. The fund invested in Calgary-based Eavor in October 2023, and Idealist Capital in March 2024.

Carbon capture is the process by which emissions created during oil and gas production, refining, and upgrading are captured and either sequestered underground or used in further industrial processes.

While the technology has taken off in the last decade, some critical voices, such as the International Institute for Sustainable Development, have called it a “poor strategy for decarbonizing oil and gas production,” primarily due to its high price point, a lack of industry oversight, and the technology’s role in facilitating continued oil and gas production, rather than lessening the world’s reliance on these resources.

Feature image courtesy of Svante.

The post Svante gets $137-million CAD commitment from Canada Growth Fund first appeared on BetaKit.