2024 was the year that British-Canadian computer scientist Geoffrey Hinton won a Nobel Prize in Physics for his contributions to the field of artificial intelligence (AI). 

2024 reinforced that Canada lacks the resources to win the AI war on all fronts.

His victory is a reminder of Canada’s strong tradition of AI research and talent, which has set it apart from other countries and fuelled the development of some promising domestic AI players. Hinton’s work and that of other Canadians helped lay some of the groundwork for this AI age. 

But this is a global fight for AI dominance, one that the world’s technology giants and richest countries are looking to win—and they are also willing to spend whatever is necessary to come out on top.

2024 reinforced that Canada lacks the resources to win this war on all fronts, and offered evidence that the country does not have a clear AI strategy. As 2024 comes to a close, it is unclear if we have picked the right battle to fight.

Canada’s AI potential

Canada became one of the first countries to lay out a national AI strategy in 2017. Today, Canada has an undeniably strong AI research ecosystem.

Ambitious AI startups are also being built here across the AI stack and raising the capital to scale. Just this year, AI chipmaker Tenstorrent closed nearly $700 million USD, large-language model (LLM) developer Cohere secured $500 million USD, autonomous driving firm Waabi raised $275 million CAD, and text-to-image generator Ideogram nabbed $80 million USD, to name a few.

In terms of generative AI talent, Canada also has depth and breadth. According to a Deloitte report, Canada has 670 AI startups and 30 generative AI firms, ranking fourth globally in terms of generative AI companies per capita.

Canadian investors have also been putting more dollars and attention towards AI. Amid a particularly tough year for venture capital fundraising, Radical Ventures closed an $800-million USD AI growth fund, while upstarts like Intrepid Growth Partners, Defined Capital, and DevCap have emerged to take advantage of opportunities across the sector.

#CDNTECH 2024

BetaKit looks back at the defining Canadian tech stories of 2024.

• The year quiet quitting got loud for tech execs
• Clio and the go-privates
• Canada struggles to find its place in the global AI race
• RIP to the feds’ (failed) innovation strategy (forthcoming)
• The BetaKit Podcast: The biggest tech stories of 2024

After years of relative underinvestment, Canadian organizations have also been outspending their global peers on AI and other tech as of late, per a recent KPMG report.

The federal government has also committed billions to building on Canada’s strength in AI research and safety and boosting domestic AI adoption and computing capacity. 

These ingredients and trends place Canada in a good position to capitalize on the expected benefits of AI. However, Canada’s AI potential is not a guarantee of future success. Canada has a long, well-documented history of struggling to commercialize and scale its research and innovations, and the competitive and capital-intensive nature of AI likely requires a country like Canada to have a more targeted focus and execution when it comes to this tech.

Outgunned and unfocused

This year has demonstrated two things. 

The first is that in terms of raw dollars, Canada simply cannot compete: our peer countries and foreign firms are spending more on AI than Canadian governments, companies, or investors, combined. Amid a global race where the world’s tech giants and others are poised to spend an estimated $1 trillion USD collectively on AI over the next five years, according to Goldman Sachs, Canada’s recent AI commitments and financings represent a drop in the bucket.

Radical just raised the largest AI fund of its kind, but it is still modest compared to the sums being poured into this space by other players. By way of comparison, the $2.2 billion CAD in VC funding Canadian AI startups raised in total in 2023, according to the Canadian Venture Capital and Private Equity Association, is less than a quarter of the $8 billion USD that Amazon alone has poured into LLM developer Anthropic. 

The CVCA has found that Canadian AI companies still struggle to secure sufficient funding in Canada, something that former Untether AI CEO Arun Iyengar and others have lamented to BetaKit. 

RELATED: Radical Ventures launches $800-million USD AI growth fund

Tenstorrent, which claims to remain committed to Canada, has nevertheless quietly moved south to access more funding from US investors as it looks to compete with US chip giant Nvidia. Even Canada’s biggest AI bets still face stiff competition from better-capitalized American players. In the LLM space, Cohere faces a tall order as it faces off against US rival OpenAI—the company behind ChatGPT—which just closed $6.6 billion USD this fall.

The second thing we have learned in 2024 is that Canada lacks a clear, focused AI plan. Some have questioned whether Canada has been throwing money into a race that has already been won and is spreading resources across too many projects at a time when the country still needs to figure out how to help finance and scale its AI companies in order to keep them here.

Phase one of the federal government’s 2017 Pan-Canadian AI Strategy focused on research, while phase two has targeted the commercialization and standardization of AI and attracting talent. The AI landscape has transformed since then, and the advent of generative AI products like ChatGPT has changed the game.

Since then, the feds have promised big investments in AI computing, allocated funding to fuelling AI adoption, and re-upped their support for the country’s national AI institutes. But Canada is still waiting for a more comprehensive phase three, which will need to account for AI advancements since 2022 and scope for what may come amid a highly competitive global environment. Meanwhile, the longstanding Liberal government’s future is now in question—introducing even more uncertainty.

RELATED: AI chipmaker Tenstorrent closes nearly $700-million USD Series D at $2.6-billion valuation

Meanwhile, the government’s AI computing commitments have been criticized as too little, too late and another possible flow-through to foreign AI companies or large multinationals. Some have also questioned why Cohere’s new federally-funded data centre is being built with US company CoreWeave and will use chips from American giant Nvidia rather than Canadian partners.

Experts have repeatedly argued that Canada needs to choose a few select lanes when it comes to AI, semiconductors, and other parts of the tech sector. 

As Canadian Council of Innovators president Ben Bergen recently told BetaKit, “The government has to pick a few areas that it views as critical and then work with the companies that are in that space to help them.” In terms of industrial strategies, “focusing on everything and nothing all at the same time leads to no strategy,” he added.

“We just need to be realistic about what we can do,” former Scale AI COO Clément Bourgogne told the BetaKit Podcast last year. At the time, Bourgogne—who is now with Jolt Capital—argued that Canada needs to find niches where the country can play an important role. 

RELATED: Cohere secures federal backing to build multibillion-dollar Canadian AI data centre

“We’re never going to dominate all of AI,” he said.

Mappedin CEO Hongwei Liu recently argued on the BetaKit Podcast that Canada needs to look at where the country can get the most leverage from its limited dollars, and not simply react to the US.

“Maybe we can be more strategic instead of reactive in terms of where we invest the next $10 billion, $100 billion of capital,” Liu said. 

It is clear that Canada cannot win it all when it comes to AI. As a smaller nation with shallower pockets than the US, Canada must choose its battles wisely. Despite big commitments this year, it remains unclear if Canada can transform the expertise and investment in AI that led to a homegrown Nobel Prize into real economic or productivity growth for the country.

With files from Douglas Soltys.

Feature image courtesy Madison McLauchlan for BetaKit.

The post In 2024, Canada struggled to find its place in the global AI race first appeared on BetaKit.

Congrats, folks, we’ve survived another year.

As required for The BetaKit Podcast to maintain its podcasting license, we are here to to review the tech year that was.

“We are about to see a bunch of people who are powerful, successful, and feel like they know the best way to do things bring this approach into government.”

If 2023 was a year of violent change and crisis management, how might we summarize 2024?

As it is uncommon in these parts, it’s important to note a hint of optimism throughout the year. Yes, Canadian venture has been historically bad and several tech companies (and their leaders) have been gritting through the turn, but it means those companies are working to turn the corner.

Several Canadian tech companies had a stellar 2024 and are eagerly eyeing 2025. You’ll hear about them in the back-half of the podcast as part of our annual letter grades. 2024 was a year we chased dumb conceits on the podcast, and I’ve enjoyed none more than these evaluations, which are highly subjective, and graded on a curve. Listener discretion is advised!

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

But all that comes after the meat and potatoes: our 2024 retrospective, comprising four major stories. Unlike our wonderful Canadian tech retrospective, these are more global tech stories addressed from the Canadian perspective. I won’t spoil them here, but I will say that 2024 was a year of glacial movements: slow yet monumental. The beginings of change only seen once a tech age that has the potential to reset the board. If you want more than that you’ll have to dig into the episode, but because we value your podcasting patronage, you’ll find some helpful reference links below.

Reference links:
Shopify finished at the bottom of The Globe and Mail’s board games
Cohere’s letter on where enterprise AI is headed
Wealthsimple had a good year
The Competition Bureau (also) sues Google
DOGE comes to Canada (Pt. 1) (Pt. 2) (Pt. 3)

The BetaKit Podcast is presented by Devious Web: a Shelley Grandy mystery novel available in digital or paperback formats.

As he considers a US $250 million acquisition offer for his data analytics company, Pellucid, CEO Tom Oliver becomes the target of a nefarious plot. A suspenseful journey through Toronto, Caledon, Georgian Bay, and the US, Devious Web follows the twists and turns of M&A, disappearing company funds, and CEO safety.

If you enjoyed Suits and Succession, this book is for you. Order your copy today.

The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald.

The post The biggest tech stories of 2024 first appeared on BetaKit.

The post Test your knowledge of 2024’s biggest Canadian tech news first appeared on BetaKit.

Canada’s Minister of Innovation, Science and Industry Francois-Philippe Champagne is not part of today’s cabinet shuffle as a new year election looks near-certain. 

Shuffle caps off a hectic week kicked off by the resignation of Finance Minister Chrystia Freeland.

Champagne has been serving as Innovation Minister since 2021, when he took over from Navdeep Bains. The shuffle named eight news MPs to cabinet, replacing some ministers who have resigned or made it known they will not be seeking re-election in recent weeks, while four got new or modified portfolios. 

The shuffle includes new ministers responsible for a pair of regional development agencies that fund technology projects in Canada.

Brampton North MP Ruby Sahota is the new Minister responsible for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), replacing Filomena Tassi who announced in October that she will not seek re-election. Sahota re-affirmed her support for Prime Minister Justin Trudeau on Monday after an emergency Liberal caucus meeting in reaction to Deputy Prime Minister and Finance Minister Chrystia Freeland’s surprise resignation. 

Additionally, Winnipeg South MP Terry Duguid is replacing Dan Vandal as the new Minister responsible for Prairies Economic Development Canada (PrairiesCan). Vandal also announced his retirement from politics in October. 

The shuffle caps off a hectic week leading up to the holidays, kicked off by Freeland’s resignation from her position Monday hours before she was scheduled to deliver the Fall Economic Statement (FES). In her departing statement, Freeland noted that she has been at odds with Trudeau lately regarding the best path forward for Canada at a time when the country faces “a grave challenge” from the United States. 

RELATED: Feds struggle to table Fall Economic Statement following Minister Freeland’s shock resignation

After hours of uncertainty, chaos, and no finance minister, House Leader Karina Gould tabled the FES just after 4 p.m. on Monday. Less than an hour later, then-Minister of Public Safety, Democratic Institutions and Intergovernmental Affairs, Dominic LeBlanc, had Finance added to his portfolio. LeBlanc retained the finance portfolio in the shuffle, but Ottawa South MP David McGuinty took the Public Safety portfolio off his plate. 

Leblanc will now be the one responsible for following through on a number of measures in the FES aimed at spurring more investment in Canada’s technology sector and domestic businesses more broadly. 

This includes a renewal of the Venture Capital Catalyst Initiative (VCCI), Scientific Research and Experimental Development (SR&ED) tax credit reform, programs to encourage more private investment in mid-cap growth firms and pension fund support for artificial intelligence (AI) data centres. There are also measures named in the 2024 budget that LeBlanc will now have to see through, such as the capital gains tax changes that vexed Canadian tech earlier this year, that haven’t yet become law. 

However, many promises contained within the FES require legislative amendment, making them unlikely to be fulfilled after NDP leader Jagmeet Singh released a statement announcing his intention to file a non-confidence motion when the House of Commons sits again on Jan. 27, 2025.

The NDP has long propped up the Liberal minority government, voting against the Conservative Party’s non-confidence motions throughout the year despite the end of the supply-and-confidence agreement in September. Without the NDP’s support, an election will almost certainly happen in the spring, leaving the Liberal proposals waiting to follow that result. 

Feature image courtesy Justin Trudeau via Flickr. 

The post Champagne stays put as Liberals name new FedDev, PrairiesCan ministers in cabinet shuffle first appeared on BetaKit.

When Silicon Valley Bank’s (SVB) Canadian assets went up for auction in the summer of 2023 following the California-based, venture-focused bank’s collapse, 13 companies submitted bids to claim either a portion or all of the Canadian loan book.

Among them was a unique contender: Toronto-based venture firm Round13 Capital.

“We knew a lot of [SVB’s] borrowers, had thoroughly diligenced them, and had a strong view on the opportunity there,” Brahm Klar, Round13 Capital’s managing partner, told BetaKit in an interview.

“There’s a pretty big swath of the market that’s not optimally served.”

Michael Wallace, TIMIA

While it was not the only venture firm that sought to buy SVB assets—Inovia Capital and Founders Circle acquired SVB’s $60-million loan to portfolio company Clearco to support the company’s stabilization—Round13 had a different goal. Typically focused on equity investments in scaling tech companies, Round13’s bid signalled a desire to explore a new asset class: venture debt.

Ultimately, National Bank acquired SVB Canada’s commercial loan portfolio, but Klar noted that the process provided the firm with valuable insights into the private credit space. This led Round13 to spend much of the following year exploring whether to acquire another asset or build their own venture debt platform.

That year of reflection led to Round13’s acquisition of TIMIA Group earlier this fall. TIMIA, a Vancouver-based venture debt firm, marked Round13’s first official foray into the space.

The deal not only lets Round13 leverage TIMIA’s existing lending platform, but also positions the firm to address a growing demand for non-dilutive funding among early-stage Canadian startups.

“There’s a pretty big swath of the market that’s not optimally served,” said Michael Wallace, TIMIA’s new CEO under Round13’s ownership. “We think there’s an amazing opportunity to work with slightly smaller, earlier-stage founders who don’t necessarily have the desire to … run potentially cash-flowing, high-quality technology businesses, and are looking for the right flexible capital partner to work with them at a scale that makes sense for them.”

Round13 Capital was founded in 2011 with the goal of supporting Canadian entrepreneurs through growth-stage equity investments. Over the years, the firm has built a reputation for its focus on concentrated investments in late-stage and crypto companies.

RELATED: Round13 Digital Asset Fund claims over 40 percent gains despite tough crypto market

According to Klar, Round13 saw venture debt as a complement to its existing equity funds. He noted a persistent challenge in balancing risk-adjusted returns with the high growth expectations that are typical in the VC arena.

“We want to see most stakeholders do well in most scenarios, not most stakeholders do well in the most ambitious scenarios,” Klar explained.

Venture debt, Klar explained, offers an attractive proposition with “mid-teens-and-up returns,” faster returns to limited partners, and critical support for companies “looking to bridge to either a next financing event, break even, or potential M&A.”

He believes the acquisition of venture debt platform TIMIA provided the best vehicle for Round13 to address these gaps. Founded in 2015, TIMIA claims to have established over $200 million in loan facilities, supported 80 portfolio companies, and achieved 35 exits.

Particularly since the collapse of SVB, Canada’s venture debt landscape has been dominated by large technology banking groups like CIBC Innovation Banking and RBCx. According to a report from the Canadian Venture Capital and Private Equity Association, CIBC alone deployed $138 million CAD in non-dilutive financing in the first three quarters of this year.

Round13 does not view its venture debt offering as competitive to the banks. By providing smaller loans ranging from $1 million to $10 million, it aims to act as a starting point for startups not yet ready for traditional bank financing. 

“Our suspicion is that this will be a great precursor to a lot of Canadian bank lenders, and our hope is that most of our portfolio graduates [go on to] work with the Canadian banks,” Klar added.

RELATED: One year later, what filled the hole SVB left in Canadian tech lending?

Wallace said he feels the acquisition allows Round13 to fill the funding gap for businesses not yet ready or willing to take on significant equity investments, with Wallace noting many of TIMIA’s borrowers are “folks who’ve chosen not to go the equity route at scale.”

“They may have angel funding or friends and family funding, or even a seed or pre-seed round in there, but they have chosen, rather than grow via equity, they want to maintain a cash-flowing business and look for non-dilutive forms of capital to help grow,” Wallace said.

Following the acquisition’s close in early November, Round13 owns TIMIA’s operating company, which manages the private debt business, as well as general partner interests in the firm’s investment vehicles, which are used to issue loans and source capital to finance those loans.

Round13 also acquired limited partnership interests in three of TIMIA’s five investment vehicles, which give it direct participation in the existing loan portfolio. One of the vehicles is now closed to new investments, while another operates as part of a partnership with American firm Arena Investors. 

Through this structure, Round13 has inherited an active portfolio of 26 debt investments in primarily software-as-a-service (SaaS)-focused companies.

“We want to make sure that we’re not sacrificing credit quality in the name of doing more and more deals.”

Incoming CEO Wallace spent six years building Langhaus Financial Partners, a non-bank insurance lender that was eventually acquired by Montfort Capital, TIMIA’s parent company, prior to the Round13 acquisition. He also held leadership roles in the technology sector, including positions as CEO and president of both SaaS startups and service providers.

Under Wallace’s leadership, TIMIA’s integration into Round13 Capital comes with a goal of becoming the premier private credit platform for technology investments in Canada. 

His vision involves scaling TIMIA’s lending capabilities, both in terms of deal size and the range of companies it can serve. Wallace noted that Round13’s liquidity injection into the business allows TIMIA to take on larger deals while maintaining its focus on early-stage, revenue-generating companies. The aim, he said, is to broaden TIMIA’s “credit box” to support more founders.

Wallace also sees TIMIA’s partnership with Round13 as a way to extend the reach of its origination engine, allowing it to identify and support a wider range of potential borrowers. 

“We want to make sure that we’re not sacrificing credit quality in the name of doing more and more deals,” he added. “So we’ll be very judicious about how we go about it.”​

Though Wallace and Klar have big ambitions for their venture debt offering, Klar acknowledges that branching into this asset class is a well-trodden path in the private equity world.

“If you look at Onex, Apollo, Blackstone, KKR—they all have both credit and equity products to their offerings, and that’s because credit makes sense for a certain profile and equity makes sense for another profile,” Klar said. “We take some of our inspiration from that.”

For now, the pair’s focus is on engaging with existing investors, management teams, and Canadian startups to fine-tune TIMIA’s growth strategy and ensure it meets the needs of the country’s tech ecosystem.

Feature image courtesy Round13 Capital.

The post Why Round13 Capital is betting on venture debt first appeared on BetaKit.

Burnaby, BC-based legaltech company Clio made Canadian tech history this year when it raised a record-breaking $1.24-billion CAD ($900-million USD) Series F round at a $4-billion CAD ($3-billion USD) pre-money valuation. 

The fundraising itself is one of Canadian tech’s biggest stories of 2024. After all, the round dethroned 1Password’s $744-million CAD Series C in 2022 to become the largest-ever raise in Canadian tech history, and single-handedly accounted for nearly half of all dollars raised in the country during Q3 2024.

More important than what the round achieved is what it represented: a private company expertly navigating market demands while public market contemporaries floundered or fled.   

#CDNTECH 2024

BetaKit looks back at the defining Canadian tech stories of 2024.

• The year quiet quitting got loud for tech execs
• Clio and the go-privates
• Canada struggles to find its place in the global AI race
• RIP to the feds’ (failed) innovation strategy (forthcoming)
• The BetaKit Podcast: The biggest tech stories of 2024

Clio CEO Jack Newton said at BetaKit Town Hall: Vancouver in October that he felt the weight of demand to exit via IPO or a sale from existing investors aging out of their funds. So Newton used the round, which was “substantially secondary,” to release the pressure and avoid entering a hostile IPO market that forced many in Canadian tech to go private this year. 

“You don’t need to sell,” Newton said on stage, adding that founders can look at the private markets as a way of “letting your existing investors punch out.”

Clio’s desire to stay private helps explain why so many publicly traded Canadian tech companies returned to the private markets this year, ultimately taking buyouts from deep-pocketed private equity firms. According to a September report from The Globe and Mail, 20 tech IPOs occurred during the 2020 IPO boom, and almost half of those have since gone private, delisted, or been taken over. 

“Maybe you go public again in a few years but, you know, it’s tiring being public. It’s brutal.”

Tamara Steffens
Thomson Reuters Ventures

Some of this year’s go-private transactions came from Copperleaf Technologies, MDF Commerce, Q4 Inc., CloudMD, BBTV, and TrueContext.

One of the largest was Montréal-based payments company Nuvei, which was acquired by Boston-based private equity Advent International for $6.3 billion USD about three and a half years after it first went public during the IPO wave of 2020. 

After returning to the helm of Montréal-based payments company Lightspeed Commerce, Dax Dasilva also entertained the idea, initiating a strategic review of the business that could result in a similar go-private move. That review led to Lightspeed postpone its Capital Markets Day last month. 

So why did the great go-private wave of 2024 (which we began to see hints of in 2023) happen? 

According to Thomson Reuters Ventures managing director Tamara Steffens, going private means less scrutiny for companies at a time when they can’t put together the results needed in the public markets. 

“If you don’t have the financial stability to continue to pull together quarter after quarter after quarter, you may be better off pulling in private [and] cleaning it up behind closed doors, from a cost basis perspective, which you can do less visibly than if you’re a publicly traded company,” Steffens told BetaKit in an interview. 

“Maybe you go public again in a few years but, you know, it’s tiring being public. It’s brutal.”

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

Steffens said that valuations have gotten more realistic since the boom of 2021, and a number of companies will opt for an exit rather than a down round. Since valuations have become “much more realistic,” the companies that did jump through the wide-open IPO window a few years ago now suddenly pine for greener grass. It’s also why Clio, which hired ex-Clearco CFO Curt Sigfstead in 2022 as it prepared to go public, still hasn’t pulled the trigger.

Newton said at BetaKit Town Hall: Vancouver that Clio’s $200 million USD ARR, larger than Shopify’s at the time of its IPO, needs to reach $500 million to entertain the current IPO market.

Steffens noted that while it’s not any harder to IPO than it was last year, the choice to do so (or dip) will stem from the investor pressure Clio deftly defied. 

“If there’s less funding happening, there’s going to be a natural progression to either exit via sale to another company or to go IPO,” Steffens said. “There hasn’t been as much return [to LPs in recent years], and [investors] are going to have to make some decisions and push some companies in one direction the other.”

While it’s all about timing, many Canadian tech companies say they’re ready for when the time comes. The Globe and Mail recently compiled a list of 71 privately held technology companies that have reached $100-million USD in annual recurring revenue (ARR), a milestone indicating maturity and sustainability. 

One of the companies is travel app Hopper, which has exceeded $300-million ARR. When BetaKit spoke with Brightspark Ventures managing partner and Hopper board member Sophie Forest in September, she said that the company will tackle an IPO when it makes sense, but there’s no urgency to do so. 

In the meantime, Hopper could be the next tech company to follow Clio and raise a large secondary round to quell investors, just like San Francisco-based artificial intelligence data company Databricks did this week with its staggering $10-billion Series J round.  

When BetaKit spoke with Fullscript CEO Kyle Braatz last month, whose company has nearly achieved $1 billion in ARR, he also indicated that he’s just waiting for the right time to test the markets. 

“I would say we’ve got the market tailwind. We’ve got recurring revenue that’s very predictable,” Braatz told BetaKit. “We have profitability, we have a strong team, we have all of the attributes that a good public company has. It’s just a matter of when.” 

According to Steffens, the “when” might be just around the corner. She predicts the IPO market will open up “a little bit” in 2025, and even more so in 2026. 

Feature image courtesy Madison McLauchlan for BetaKit.

The post Clio’s record-breaking funding round explains 2024’s public market exodus first appeared on BetaKit.

Finland-headquartered Hostaway, which sells management software to short-term rental owners and operators, has announced $365 million USD in strategic growth financing to fuel its European expansion and product and artificial intelligence (AI) development efforts.

Once this transaction is complete, General Atlantic and PSG Equity will be “significant minority shareholders.”

The round is being led by New York’s General Atlantic with support from existing Boston-based backer PSG Equity. It comes approximately a year and a half after PSG invested $175 million into Hostaway. At the time, sources told BetaKit that PSG acquired an undisclosed majority stake in Hostaway as part of that deal. 

Once this latest transaction is complete, Hostaway stated “General Atlantic and PSG Equity will both be significant minority shareholders” in the company. According to TechCrunch, the round comes at a $925-million post-money valuation.

Founded in 2015 by CEO Marcus Räder, CSO Saber Kordestanchi, and Mikko Nurminen, Hostaway’s software helps owners and property managers of short-term rental properties manage listings, bookings, and communication across Airbnb, Vrbo, Booking.com, Expedia, and other platforms. As of last year, Hostaway’s clients collectively managed over 100,000 properties in more than 100 countries.

Though its founders hail from Europe, Hostaway was previously based in Canada. Today, 30 of Hostaway’s over 230 employees are located here.

Räder has lived in Toronto for the vast majority of the company’s existence. But after spending its first nine and a half years here, he moved to Poland earlier this year, a Hostaway spokesperson told BetaKit.

RELATED: PSG makes investment in Hostaway to expand its vacation rental software amid travel rebound

In a statement, PSG managing director Edward Hughes claimed that Hostaway has grown three-fold since PSG invested in the company last year, but did not disclose its revenue.

Hostaway claims that this fundraise will represent the largest in its market segment to date. The vacation rental software firm differentiates itself from Canadian-founded, San Francisco-based Sonder, which manages properties directly, and American home-sharing platform giant Airbnb, which it classifies as an online travel agent.

Hostaway has recently launched new dynamic pricing, loan, insurance, and smart lock integration offerings, as well as integrated AI to support guest messaging, content creation, and language translation.

General Atlantic has also backed Airbnb. Hostaway hopes to lean on the growth investor’s experience and expertise in vertical software, integrated payments, and travel and hospitality as it looks to build its presence in markets like France, Italy, and Spain, launch new products, and develop more AI tools.

Feature image courtesy Hostaway.

The post Hostaway announces $365 million USD from US investors to fuel European expansion and AI plans first appeared on BetaKit.

Montréal has a new healthtech venture capital (VC) firm on the block, backed by a Québec government fund that targets pre-seed investments.  

The Eurêka investment fund, funded by Québec’s Ministry of Economy, Innovation and Energy (MEIE) and administered by Investissement Québec (IQ), has doled out $5 million to Glen Ventures, an early-stage healthtech fund with ties to the McGill University Health Centre (MUHC). 

“Québec’s early-stage VC landscape is largely generalist or deep-tech-focused, leaving a gap for pre-seed healthtech startups.”

Michael Goodman

The firm told BetaKit that Eurêka’s support is a standalone co-investment mandate and not part of a larger fund. Glen Ventures currently invests in companies through special purpose vehicles (SPVs), but stated it has plans to raise a dedicated fund in the new year.

Across the board, it targets pre-seed and seed-stage companies, writing cheques ranging from $250,000 to $1 million with reserved capital for extensions.

“This approach allows us to begin investing right away, building our track record and positioning ourselves effectively for the future fund while adapting to the market,” Glen Ventures co-founder Michael Goodman wrote in an email to BetaKit. 

Glen Ventures said it would use the money to support early-stage healthtech startups through product development and go-to-market efforts. In addition to financial support, the VC aims to connect founders to potential investors and prepare them for Series A rounds. 

RELATED: KisoJi raises $57-million CAD Series B to advance antibody cancer therapy

The firm plans to invest in four companies with the Eurêka money, which according to the investment mandate, must have intellectual property (IP) originating from Québec public research institutions and be raising their first financing rounds outside of friends-and-family rounds. For its investments outside of the Eureka mandate, Goodman said he wants to back entrepreneurs seeking to “reshape healthcare through technology at home and on a global scale.”

In addition to his role as founding partner, Michael Goodman sits on the MUHC Foundation board of directors. Managing partner Samuel Ohayon completed a master’s thesis in molecular pathology, then shifted to entrepreneurship before co-founding Glen Ventures, according to his LinkedIn. 

Glen Ventures’ MUHC affiliation supports the firm’s healthtech focus, giving it access to “large-scale piloting” and “top clinical expertise” for its portfolio companies, the firm said. According to Goodman, this edge sets Glen Ventures apart, allowing them to guide founders through challenges in getting their products into clinical settings. 

Glen Ventures maintains that it is the province’s only VC focusing exclusively on healthtech.

“Québec’s early-stage VC landscape is largely generalist or deep-tech-focused, leaving a gap for pre-seed healthtech startups struggling to find lead investors,” Goodman said. 

Indeed, investments at the seed stage in Québec have lagged this year, according to a joint Canadian Venture Capital Association and Réseau Capital report. In November, IQ put a key early-stage investment-matching program on indefinite pause, pulling the rug out from some startups counting on the program to close funding rounds. 

The Eurêka investment fund is a $100-million initiative that injects capital into early-stage funds and directly invests in healthtech startups, as part of the province’s five-year innovation strategy. The startups must be located in Québec, at the pre-seed stage, and referred by designated public research institutions. 

RELATED: Aramis Biotechnologies secures $80 million CAD for vaccine development do-over

In a recent interview with BetaKit at the Startup Community Awards, Conseil d’innovation du Québec executive director Luc Sirois lauded Eurêka as one of the government’s highlights of the year. He said it helped to better bridge the gap between academic research and industry, which he called a key driver of innovation. 

Québec’s ecosystem has seen large funding rounds recently for Epitopea, KisoJi Biotechnology, and Aramis Biotechnologies, but fewer at the pre-seed stage. A Réseau Capital report recommended that the Québec ecosystem establish a working group to grow its life sciences sector. 

“Glen Ventures fills a gap between the advanced scientific research happening in public institutions and the marketplace,” Benoit Leroux, chair of Eurêka’s board of directors, said in a statement. 

Glen Ventures recently led and closed a $1.5-million CAD round in an undisclosed digital therapeutics company. Goodman said they expect to close a first co-investment under the Eurêka mandate in the coming weeks. 

Feature image courtesy National Cancer Institute via Unsplash.

The post Glen Ventures lands $5 million CAD from IQ fund to back early-stage healthtech startups first appeared on BetaKit.

Canadian startups might find some extra cash on their books this holiday season, thanks to a key provision in Bill C-69, which passed in June. 

The bill, which is largely focused on clean energy investment tax credits, includes a legislative amendment to address an 2021 decision by the Tax Court of Canada that deemed government issued loans below market rates are a form of government assistance. 

“This is a PSA to check your SR&ED history … and see if you can capture possibly hundreds of thousands or millions of dollars.” 

Bryan Watson

That ruling required recipients to treat favourable loans provided by government institutions as a form of government assistance—like a grant—for taxation purposes.

That means those funds could be taxable, and incompatible with other government assistance programs, such as Scientific Research and Experimental Development (SR&ED) incentives, even if they were fully repayable. 

According to the CRA’s website, there were more than 21,500 SR&ED claims in the one-year period that ended March 31 of this year, totalling more than $4.2 billion. 

Introducing excluded loans

Bill C-69 introduced the term “excluded loan,” which applies to loans that are now exempt from being treated as government assistance. 

According to Canada Revenue Agency (CRA) spokesperson Nina Ioussoupova, the definition applies to loans that are issued by a government, municipality, or other public authority in Canada, to a Canadian resident or partnership for the purpose of earning income from a business or property.

“The loan must be evidenced in writing [and] must not be a forgivable loan,” she said, adding that there is also a requirement that “at the time the loan was made, bona fide arrangements were made for repayment of the loan within a reasonable time.” 

Loans that do not meet the standard for “excluded loan” will not be affected by the change and will continue to be treated as a form of government assistance. 

Tax code battle

Prior to 2021, most businesses treated government-issued loans the same as those issued by private institutions, even if they were issued at below-market rates or on more favourable terms. 

That approach, however, was deemed to violate the tax code after a judge ruled that Québec-based aviation, defence, and healthcare provider CAE Inc. was unable to use a $250-million loan from Industry Canada’s Strategic Aerospace and Defence Initiative in conjunction with SR&ED incentives. 

RELATED: Feds announce VCCI renewal, SR&ED and pension fund changes ahead of Fall Economic Statement

“The court said that’s a form of government assistance,” explained Ryan Minor, the director of taxation for Chartered Professional Accountants (CPA) Canada. “When you have government assistance, it becomes taxable income, and it reduces investment tax credits for research and development.” 

The ambiguity on how to handle repayable government-issued loans offered at below market rates—like those offered through the Business Development Bank of Canada (BDC), Canada Infrastructure Bank (CIB), EDC, and FCC—left by the ruling inspired CPA Canada and the Canadian Bar Association to send an open letter to the Director General of the Tax Policy Brand of the Department of Finance last summer requesting clarity. 

Those questions were addressed by Bill C-69, which amended the Tax Law to exclude government-issued repayable loans from government assistance programs, and further clarified in a written response to CPA Canada in late November. 

“Basically, it applies to any loan from a government, where at the time the loan was made, bona fide arrangements are made for repayment, and the funds were used for the purpose of earning income from business or property,” explained Minor. “Even if there’s a concessionary interest rate, the fact that it’s repayable and from a public body means you should be able to consider it not government assistance.” 

Check your books 

Minor believes that the legislative amendment was included in Bill C-69 to ensure there was no ambiguity regarding how the clean energy incentive programs it introduced could be used. 

“I don’t think it was the government’s intent to treat that as government assistance,” he said of the original Tax Court ruling. 

Not only did the bill clarify the policy moving forward, but it was also deemed applicable retroactively to before the CAE Inc. ruling, starting on the first day of 2020. That means Canadian businesses that treated government-issued repayable loans as government assistance in the wake of the CAE ruling can go back and amend their tax filings. 

“This ensures that concessional loans issued during the pandemic or to finance the acquisition of assets eligible for clean investment tax credits would generally not be treated as government assistance,” explained Ioussoupova of the CRA. 

“These are large sums of money in some cases,” added Bryan Watson, the managing director of CleanTech North and senior vice president of business development at Venbridge, which specializes in helping technology firms apply for SR&ED financing. 

While such amendments are typically restricted to an 18-month window, the CRA’s response to CPA Canada clarifies that affected claimants can be removed from net taxable income, and “A larger deduction from the pool of deductible SR&ED expenditures may be taken, or the additional balance can be carried forward to be deductible in subsequent years.” 

“This is a PSA to check your SR&ED history, because if you have any of these loans, you may want to speak to your accountant and see if you can capture possibly hundreds of thousands or millions of dollars,” Watson said. “This may be a huge part of how you manage to finance and cash flow your business, especially right now, when equity is tight and we’re going into the holidays.” 

The post Check your SR&ED history: Canadian tech companies could be in for post-holiday windfall first appeared on BetaKit.

Canadian FinTech startup Koho is using a generative artificial intelligence (AI) tool it claims will speed up its investigations of money laundering and terrorism funding.

The company says its internal tool now performs the “busy work” of anti-money laundering investigations and reduces the time analysts spend on an investigation from an average of 95 minutes to 35. 

“We saw an opportunity to build something that would make this more efficient—not to take the human out of the role of detecting and reporting.”

David Kormushoff, vice-president of technology and AI at Koho, said during a panel at Amazon Web Services’ Re:Invent conference in Las Vegas that the company was on the precipice of getting that investigation time down to five minutes, which would involve having the investigator check the tool’s work (BetaKit received travel and accomodation support from Amazon to attend Re:Invent).

“We saw an opportunity to build something that would make this more efficient—not to take the human out of the role of detecting and reporting, but effectively to have [the tool] be their assistant,” he said. 

Koho is regulated as a money service business and overseen by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which requires the challenger bank to detect and report suspected instances of money laundering and terrorist financing. 

But he noted during the panel that not only have bad actors become more sophisticated, finding ways to layer transactions and jump across institutions, the sheer volume of transactions that occur across financial institutions every day means the process of detecting and reporting on suspicious activity is very slow. 

“Most risk and fraud departments and financial institutions are seriously backlogged,” he said.

He said that Koho’s primary demographic, of paycheque-to-paycheque households, are “disproportionately affected” by bad actors. 

“And grandmas who get calls saying, ‘go to the store and buy a bunch of gift cards’—that’s not just fraud, it’s money laundering,” he added.

When fraud investigators receive an alert of suspicious activity, they need to dig into every transaction the individual made over the past year, identify indications of money laundering or terrorism financing, scour the open web to determine whether the individual has been reported, and then summarize those findings into a report for FINTRAC. 

Koho’s internal tool now does all that work, and has been built to cite where it found all of the information included in the report. 

“The analyst is not just assuming the AI is doing the right thing; it’s their job to spot check and make sure that job is good,” Kormushoff said.

Kormushoff told BetaKit that the tool is not trained on customer data, and is only given information on a per-investigation basis.

The company claims the tool is freeing Koho’s fraud investigators to be able to do more “high-thought” and proactive work, he said in the interview—such as figuring out how to detect and stop money laundering at the account opening phase.

The company built the system to be “very flexible” to adapt to any forthcoming regulations around the use of AI, with safeguards around customer data in place, Kormushoff said. Koho built its tool on top of Amazon Web Services, which he said keeps customers’ data within the company’s systems.

RELATED: Koho secures $190 million CAD in equity and debt to bolster banking licence efforts

Koho CEO Daniel Eberhard wrote on LinkedIn in October that the company has landed other “major use cases” for AI in credit, user success, and growth. 

“Our view is that every function is becoming technical but the hurdle rate to being technical is going to zero,” he wrote.

Kormushoff told BetaKit one application he’s particularly excited about is an internal tool that analyzes all the available information about a security alert to help analysts more quickly determine whether the alert is a genuine concern or a false alarm. 

The company is also starting to look at creating customer-facing generative AI applications, particularly focused on educating customers about how to deploy their capital, build their wealth, and get insights into their spending and alerts, if their spending trajectory indicates they might come up short at the end of the month. 

But Kormushoff said the company isn’t yet ready to roll out tools that interact with customers’ personal financial data. 

“The rate of change in the evolution and development of these tools is only increasing, so I think we’ll probably get to a point where we feel confident enough to put it in front of the customer,” he said. “But we haven’t today because … we don’t want to be lying to them or giving them bad information.” 

Images courtesy Koho.

The post Koho rolls out AI tool to help investigate fraud and scams first appeared on BetaKit.

If you’re reading this, you probably work at a tech company that underwent an executive leadership change this year … or know someone who does. 

BetaKit saw bucketloads of turnover in 2024, reporting on nearly 50 CEO changes alone throughout the year, with countless more tracked at the C-suite level. To give you a sense of the scale of the leadership shift taking place in Canadian tech, we called the turnover trend a “tidal wave” by February.

The tidal wave hit Canadian tech companies big and small this year. 2024 saw Dax Dasilva return to the helm of Lightspeed, Flashfood’s Josh Domingues step down, Chris Walker step in at Untether AI, Stephen DeWitt replace Bill Hewitt at MindBridge after a turbulent 2023, Beth Shaw take over at Katipult Technology, John McLane take the reins from Hamed Abbasi at Plooto, Geordie Rose leave Sanctuary AI, Jolie Kahn bring her crypto insight to AgriFORCE, Felicia Bochiccio bounce from Unbounce, and many, many more. In some cases, founders were replaced with fresh leadership, only to see their replacements replaced.

The tidal wave hit Canadian tech companies big and small this year.

It wasn’t just tech companies: innovation hubs such as Alberta Innovates overhauled its board of directors before removing its CEO, while Communitech CEO Chris Albinson announced his departure to the True North Fund shortly after the organization’s annual general meeting.   

Speaking of venture capital (VC), Canada’s investor landscape saw its fair share of turnover. At the pension fund level, the Healthcare of Ontario Pension Plan swapped CEOs and AIMCo dismissed its entire board. VC firms such as Georgian, Panache Ventures, BDC Capital, and OMERS Ventures all had senior departures. At Startupfest this summer, BetaKit’s Josh Scott noted a worrying number of emerging managers dropping out, attributing the trend to market conditions that favour established funds. VCs told BetaKit that they expected to see even more turnover due to caution from limited partners. 

And, of course, the highest-profile departure of the year was Finance Minister Chrystia Freeland on the day she was expected to deliver the Fall Economic Statement. 

#CDNTECH 2024

BetaKit looks back at the defining Canadian tech stories of 2024.

• The year quiet quitting got loud for tech execs
• Clio and the go-privates
• Canada struggles to find its place in the global AI race
• RIP to the feds’ (failed) innovation strategy (forthcoming)
• The BetaKit Podcast: The biggest tech stories of 2024

While the high rate of executive turnover peaked this year, it has not been confined to 2024. Since the COVID-19 pandemic, BetaKit has been reporting on CEO successions, including a slew of shake-ups last year at Wattpad, Ecobee, MaRS, BlackBerry, and Dasilva’s departure as Lightspeed’s leader before this year’s return. A Southlea survey of 60 S&P/TSX companies found that the rate of CEO turnover increased from below 10 percent to 15 percent from 2021 to 2023. The Globe & Mail also noted a sharp increase in CEO resignations in early 2023 among Canadian companies writ large, not just in tech. 

Nor is the trend confined to Canada: one US report found that more CEOs exited US firms in October 2024 than in any month since 2002.

Industry experts who spoke with BetaKit say the wave of CEO turnover is tied to a tough macroeconomic environment causing stricter expectations at the leadership level. For those who began their careers in the post-2008 ZIRP period, when venture money was doled out with abandon, it’s a jarring shift. 

“There’s a generation of CEOs that has never seen a downturn,” said Mark MacLeod, a startup and executive coach. MacLeod, formerly a CFO at FreshBooks and Shopify, wound down his own venture in 2020 to pursue coaching full-time.

“There’s a generation of CEOs that has never seen a downturn.”

Mark MacLeod
Startup CEO coach

Founders are dealing with one of the toughest fundraising environments in recent memory, with Canadian Venture Capital Association president Kim Furlong calling the decline in pre-seed and seed-stage investments “worrisome” last quarter. Canadian VCs are feeling squeezed, too, with 2024 on track to be the worst year for fundraising in a decade. 

Many factors have contributed to the cause, but the high rate of executive change-ups reflects what the Canadian tech industry has become: a mature, tougher market no longer in a free-for-all pursuit of growth. The maturation comes with higher standards and more pressure to perform. Emergent technologies like AI are also casting doubt on some leaders’ ability to keep up with the pace of change.

Higher expectations at the top have shifted the culture to juice more productivity out of leaner teams. With less capital to go around and a lower margin for error, leaders are now paying stricter attention to performance metrics and favouring executives who can hold teams accountable for reaching them, according to Nora Jenkins Townson, founder and CEO of fractional HR firm Bright + Early. 

That doesn’t mean it’s a bad time to build—though fewer Canadians are doing so, according to the declining entrepreneurship rates noted by BDC. Rather, it means founders should be prepared to build dynamic C-suites, ones that can adapt to a changing economic environment and set themselves up for success in proving market viability. 

MacLeod also said that many founders don’t understand how drastically their role can change from year to year. A seed fundraising cycle demands different leadership than an international go-to-market bid. 

On The BetaKit Podcast in June, Lightspeed’s Dasilva said that he learned “Every year, you’ve got to throw out your job description and rewrite your job description of what can you offer the company.” 

To qualify the national trend at an individual level, BetaKit went to the source: the sometimes-corporate, sometimes-candid LinkedIn posts of outgoing executives. 

In addition to the obvious mentions—a sense of pride and honour—several outgoing CEO posts reviewed by BetaKit mentioned the transitions as chances to “recharge.” One exiting founder took to YouTube, calling the jump “emotionally scary.”

This year at SAAS North, ex-Sampler founder Marie Chevrier Schwartz spoke about the stigma associated with failure and its mental toll on leaders. Feeding into the sense of loneliness Schwartz described is that founders are unwilling to share their defeats—only their triumphs. 

Townson and MacLeod agreed that leading a Canadian tech company is more challenging than ever. One way forward, MacLeod said, is building a support network that champions honesty over bravado.

Feature image courtesy Madison McLauchlan for BetaKit.

The post The year quiet quitting got loud for tech execs first appeared on BetaKit.

Montréal-based carbon-capture startup Deep Sky has secured a $40-million USD ($57.3 million CAD) grant from Breakthrough Energy Catalyst, a climate solution-focused funding platform founded by Bill Gates. 

Deep Sky revealed it had sold its first-ever carbon credits to RBC and Microsoft last month. 

The funding will be allocated towards the construction of its first direct air capture (DAC) facility Deep Sky Alpha, formerly known as Deep Sky Labs, as well as its associated research and technology testing. Deep Sky claimed Catalyst’s investment is its first-ever in both a Canadian and DAC project. 

Breakthrough Energy’s Catalyst program funds large demonstration projects and invests in commercial projects that use emerging climate technologies. The program also provides project leaders with infrastructure-investing and project-development expertise. According to Catalyst, it has raised over $1 billion of direct capital to deploy in project funding opportunities to date. 

“The financial backing from Breakthrough Energy Catalyst will play a crucial role in helping Deep Sky realize its ambitious goals,” Deep Sky CEO Damian Steel said in a statement. “However, the partnership with Breakthrough Energy Catalyst and their expertise [in] what it takes to build projects at scale [have] already been transformative to Deep Sky.”

Deep Sky announced in August that it had selected Innisfail, Alta. as the site for its first “carbon removal innovation and commercialization centre,” now known as Deep Sky Alpha. The site is meant to provide infrastructure for eight different DAC technologies that will be tested and validated before scaling to a commercial scale, benchmarked by proprietary Deep Sky software. Deep Sky said the site would open this winter, have the capacity to capture 3,000 tons of carbon dioxide (CO2) per year, or 30,000 tons over a 10-year period, taking into account future expansion.

RELATED: Hopper-linked Deep Sky closes $57.5-million Series A to make Canada a “carbon removal capital”

Last month, Deep Sky revealed it had sold its first-ever carbon credits to firms including the RBC and Microsoft. The agreement calls for Deep Sky to capture 10,000 tonnes of CO2 from the atmosphere over a 10-year period, as well as options to purchase an additional 1 million tons from Deep Sky’s pipeline of commercial projects.

The site’s opening has since been delayed to the spring, with Steel adding that Deep Sky will deliver on its promise to “rapidly scale carbon removals” in 2025.

Deep Sky was founded in 2022 by Hopper co-founders Frederic Lalonde and Joost Ouwerkerk with the goal of using technology to capture carbon from the air with the hope of ultimately reducing the burden of fossil-fuel emissions and mitigating climate change, while also monetizing it by selling carbon credits. A carbon credit refers to one metric ton of carbon dioxide that has been removed from the atmosphere, which companies can purchase as a way to counteract their emissions of carbon dioxide or other greenhouse gases.

The duo later tapped Steel, an OMERS Ventures managing partner at the time, to lead the company as CEO before securing a $57.5-million CAD Series A round in November 2023. 

Feature image courtesy Deep Sky.

The post Deep Sky secures $40-million USD grant from Gates-founded Breakthrough Energy Catalyst first appeared on BetaKit.

Earlier this month, Garry Chan represented Ontario’s hardtech and AI incubator ventureLAB at the Global Partnership on AI Summit in Belgrade, Serbia, which convened from science, public policy, and industry to discuss the future of artificial intelligence. 

Following the event, ventureLAB signed a memorandum of understanding with Serbia’s Science and Technology Parks and the cities of Niš, Čačak, and Novi Sad to advance hardware and software collaboration between Canada and Serbia.

While the GPAI Summit drew leading voices from government, academia, and Big Tech, Chan was there representing the perspective of early-stage startups.

“A lot of founders are doing the zero-to-one stage well, and we need to support that. But the real gap, and the big opportunity, is going from one to 100.”

Chan is the Chief AI Advisor at ventureLAB, offering insights from a career that spans entrepreneurship, advising startups, facilitating commercialization, and scaling tech businesses globally.

At ventureLAB, he aims to lead where AI intersects with hardware innovation. The incubator integrates expertise in semiconductors and hardware to help startups commercialize and scale AI-driven technologies.

Their state-of-the-art AI Compute Lab provides startups with the tools to test, optimize, and de-risk their solutions. Coupled with its AI commercialization approach for real-world testing and collaboration, ventureLAB seeks to accelerate the convergence of AI and hardware to drive breakthroughs in manufacturing, healthcare, and transportation.

From that vantage point, Chan believes that early-stage startups are driving some of the most groundbreaking advancements in AI, while operating under immense constraints and navigating a lack of resources, infrastructure, and governance support.

Chan sat down with BetaKit to discuss the role of early-stage companies within Canada’s AI ecosystem, how AI governance can be built into innovation from day one, and what Canada needs to do if it wants to become a global leader in the field.

The following Q&A has been edited for brevity and clarity.

You recently attended the GPAI Summit in Belgrade. What did you take away from the event?

I was on a panel during the two days that focused on partnerships between academia, industry, and government—looking at AI from multiple dimensions. It was fascinating to see perspectives from academics, some from the US, others from Canada, alongside people like me, who work within the early-stage startup ecosystem.

From my perspective, we need to figure out how to put all these pieces together. AI governance and the ethical use of AI are critical. It’s not just something abstract you read about in journals or hear from thought leaders. It’s something we can and should infuse into early-stage companies right from the start.

We may be thinking about AI governance at the government, institutional, or enterprise level, but I feel there’s clear applicability even within early-stage companies.

Why do you think it’s important to include early-stage companies in conversations about the future of AI?

Early-stage startups play an incredibly important role in this conversation, especially in a place like Canada. By nature, they are disruptive, they’re doing something new, something others may not have done or even thought of before. If they’re not at the table, we lose out on understanding what’s happening at the forefront of the technology. 

Canada is also a country of startups, and as a country that serves small businesses and is the birthplace of amazing companies, we have a special responsibility to support these innovators and entrepreneurs who are pushing the boundaries.

What does that look like in practice for early-stage companies?

I liken it to raising a child. You try to teach good habits early. Startups should learn to bake ethical AI, safety, and governance into their DNA from day one, so as they scale, they don’t suddenly have to go back to say, ‘What do we do now?’

If you’re an early-stage company living paycheck to paycheck, you know that financial governance is critical. If you don’t manage cash flow, you won’t exist next month. Companies understand this because financial management has been ingrained over centuries. But with AI governance, we’re just at the tip of the iceberg.

The best way to approach it is to start with data governance. Many software and AI-powered companies serve customers globally. Without the right structures, checklists, and safeguards in place, you can’t operate—whether in Europe, the US, or elsewhere. Issues like data residency, privacy, protection, and security are foundational, and AI governance is a natural extension of this.

Now, for early-stage companies, what does this mean? Imagine you’re productizing your offering. You might start with one customer and one dataset in Canada. But in 12 months, you’ll likely need to operate in Europe or the US. That requires building considerations for data governance, AI infrastructure, and scalability right from the start.

How is ventureLAB looking to address some of these challenges through its AI programming?

We’re tackling three core challenges through our Accelerate AI program. The first is our Deep Learning Training and Inference Program, where we help companies productize their solutions. Building a piece of software often involves lots of smart people, like PhDs, but what we aim to do is bring in a deep bench of advisors, which we call executives-in-residence. These are people with decades of experience who might not be super technical, and that’s a good thing, because you want to pair deep engineering expertise with business-savvy people.

The second is our High-Performance Computing and Data Analytics support, which is tied to our AI compute capabilities. Thanks to funding from multiple levels of government, we’ve built a hardware lab with a server farm of GPUs. This gives startups access to the resources they need to train their software in a secure, stable environment without worrying about huge costs or chasing cloud credits.

Finally, we have the Enterprise-Ready AI Solutions Program, which focuses on commercialization. So, once your product is ready, we want to create a collision of the potential buyers and users of your tech and the solution providers. We want to make sure that we have a safe platform where people can try out the technology, where they can experiment with your tech, and where startups can co-sell and potentially resell each other’s solutions.

What do you think is the biggest opportunity for AI in Canada?

The biggest opportunity is to do everything we can to help companies scale. A lot of founders are doing the zero-to-one stage well, and we need to support that. But the real gap, and the big opportunity, is going from one to 100, helping founders find customers and helping companies scale.

Our mission is clear: to drive transformative growth and position Canada at the forefront of the global AI economy.

How does compute pose a challenge for companies as they scale?

AI is very data and processing-intensive, which means you need a lot of horsepower. If you’re a university researcher, you might have access to some compute power. If you’re an established enterprise, there are plenty of commercial providers like AWS and Google Cloud. But for early-stage startups, you’re kind of in between. Many founders end up hopping from one vendor to the next, relying on incentives like cloud credits.

Imagine, you’re always shopping for the next month’s cloud credits to do your data inference or machine learning, and therefore you don’t have time to focus on your business, which is really what you should be doing. Imagine if startups had a stable environment or sandbox where they could experiment securely, build their AI, and position themselves to delight their customers.

What kind of role do you see ventureLAB’s programming playing in Canada’s AI ecosystem?

Looking back on when I was building my startup, I often wish I had a ventureLAB in my life. There are so many advantages—access to compute resources, product design support, scaling, and commercialization.

But I think there’s something that goes beyond that: having a community of 130 smart founders, mentors, and executives-in-residence all supporting each other. You could argue it’s a chaotic environment, but it’s also a very vibrant one where you don’t need to go very far to find someone to challenge you on your product or your commercialization strategy.

I spent almost 10 years in Silicon Valley, where people say you can find all the talent, money, and customers you need within an hour’s drive. We want to do something like that here as well. If we can create a vibrant community where all these different parties have a role to play, I think something amazing will come out of it.

PRESENTED BY

Visit ventureLAB.ca to learn more about how we empower hardtech founders to build and scale globally competitive ventures, advancing Canada’s knowledge-based economy.

Feature image provided by ventureLAB.

The post Global AI gets a startup perspective: Insights from ventureLAB’s Garry Chan first appeared on BetaKit.

Yesterday’s Fall Economic Statement (FES) unveiled new details of a proposed open banking framework, confirming the suspicions of many observers in the Canadian FinTech space that progress toward a consumer-driven financial system would be stalled yet again.

The Consumer-Driven Banking Framework, first introduced in Budget 2024, now includes details on accreditation and tiering rules. It increases the proposed rollout budget for the Financial Consumer Agency of Canada (FCAC) to $44.3 million over three years, yet punts the system’s launch to 2026.

“There have been so many announcements that we’ve lost count of them all. But there have only been a few instances of follow through.”

Alex Vronces
Fintechs Canada

In last year’s FES, the feds said that this framework would hopefully be implemented sometime in 2025, but the update pushes that date to 2026. However, this timeline is contingent on whether the current Liberal party can amend the associated legislation.

FinTech leaders have been calling for a consumer-directed finance system for years, a measure that they say will improve financial service competition and lower prices for Canadians. Open banking would establish a secure way for customers to share their financial information with third parties, making it easier to switch financial institutions. 

“There have been so many announcements that we’ve lost count of them all. But there have only been a few instances of follow through,” said Alex Vronces, executive director of Fintechs Canada.

After the release of Budget 2024 in April, Nicholas Schiavo, director of federal affairs for the Council of Canadian Innovators said that though the steps toward establishing an open banking framework were positive, the “devil is in the details.” 

Now that more details are available, FinTech leaders say they’ve confirmed their worst suspicions. Andrew Escobar, a former FinTech executive at US-based MX and former member of the Canadian Internet Registration Authority, said in a LinkedIn post that the lack of tiered accreditation will hamper the impact of open banking, “perhaps severely.” 

Companies seeking accreditation must apply to the FCAC with their organization’s governance structure, operational standards, and financial liability measures. This system will be uniform for all applicants, though the government announcement said a tiered system could come later. Third-party providers of API tools such as authentication and consumer consent must gain FCAC approval and pass a national security check. 

“This approach will exclude many FinTechs and non-FinTechs,” Escobar wrote. “This will delay large enterprise teams and scrappy indie [sic] developers from participating.”

Advocates say a tiered accreditation approach might feature different FCAC approval requirements based on the data needs of the applicant. This would allow for FinTech startups and smaller entities to gain access to the system without an onerous application process, Escobar argued, and hold larger entities like Plaid and Flinks to a higher standard. 

RELATED: While US moves forward on open banking, Canadian FinTechs met with more “zombie” discourse

The new rules also give the Minister of Finance—a role filled in the interim by public safety minister Dominic LeBlanc—the authority to designate a provincial regulator to oversee aspects of open banking within its jurisdiction, such as provincial credit unions. The provincial regulator will be responsible for security, privacy, liability, complaints, and consumer protection. National security, accreditation, and fines will remain under FCAC’s purview. 

The proposed framework would also effectively ban screen-scraping, an insecure way of consumer data sharing, once the framework is operational in 2026. Many FinTech startups rely on the practice, which requires consumers to input their banking data manually to use financial services.

According to Abraham Tachjian, former open banking lead at the Department of Finance, this would force accredited third parties to join a legislated framework.

“Such a course of action forces data requestors to join a legislated framework, contributing to network effects which are critical to the growth of a data sharing ecosystem,” Tachjian wrote in a LinkedIn post. 

Vronces pointed out that the announcement did not include information about regulation or real-time rail (RTR), an update to Canada’s payment infrastructure that will allow instant money transfers. Payments Canada told BetaKit that industry testing for RTR would only begin in 2026, despite the feds having delayed its launch several times since 2019. 

“Without launching the RTR, competition in banking won’t be boosted, and Canada’s big banks won’t be compelled to work harder for Canadian consumers and businesses,” Vronces said.

Canada remains the only G7 country without official open banking and RTR frameworks in place. In October, the US Consumer Financial Protection Bureau finalized rules for an open banking system. 

RELATED: FinTech leaders say “devil is in the details” with #Budget2024 open banking promises

All of this is contingent on whether the current Liberal government can pass associated legislation. To write these new provisions into law, the government would have to amend the Consumer-Driven Banking Act and the Financial Consumer Agency of Canada Act. 

Following the surprise resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland, as well as intra-party leadership challenges to Prime Minister Justin Trudeau, it is unlikely this will be implemented before an election is called. 

Given the political circumstances surrounding the FES, some are uncertain these amendments will come to pass. In response to the FES, Scotiabank vice president Rebekah Young said items requiring legislation would depend upon “breaking the current Parliamentary stalemate under a minority government and securing enough support from other parties,” an outcome that seems “increasingly unlikely.” 

Feature image courtesy Pixabay. Illustration by Mohamed Hassan.

The post Fall Economic Statement brings more delays for open banking in Canada first appeared on BetaKit.

Many of the biggest Canadian technology-related items in the Government of Canada’s 2024 Fall Economic Statement (FES) were previously announced late last week.

These announcements include a renewal of the Venture Capital Catalyst Initiative (VCCI), Scientific Research and Experimental Development (SR&ED) tax credit reform, programs to encourage more private investment in mid-cap growth firms and pension fund support for artificial intelligence (AI) data centres.

But yesterday’s FES also included a slew of new Canadian tech-related commitments that might have been overlooked amid a day of political chaos that saw the feds lose and then gain a finance minister and closed with many unanswered questions regarding the future of Prime Minister Justin Trudeau and his Liberal government.

Setting aside those questions—including whether the commitments in the FES will actually come to pass—for now, BetaKit has broken out and highlighted some of the most notable new tech-related promises in the latest FES below. They include even more AI funding, government procurement reform, capital gains tweaks, and more money for Black entrepreneurs.

Boosting AI adoption

First, the FES included some sizeable new AI commitments. This includes $500 million CAD over four years starting in 2025–2026 for the Business Development Bank of Canada (BDC) to provide financing and expertise to small and medium-sized businesses (SMBs) looking to adopt tech, with a specific focus on AI. This comes shortly after BDC launched a new program to help SMBs figure out how to use AI.

The FES also includes $150 million over three years starting in 2024–2025 for the Global Innovation Clusters and $24 million over two years beginning in 2025–2026 for the national AI institutes. 

These measures come in addition to the federal government’s previously announced $2.4-billion AI package in Budget 2024 that includes $2 billion for the Canadian Sovereign AI Compute Strategy and $405 million towards helping AI startups bring new tech to market, boosting AI adoption among SMBs, and other initiatives.

Reforming federal procurement

The FES also revealed that the feds plan to introduce the Small Business Innovation and Procurement Act, which would require federal departments and agencies to buy a minimum of 20 percent of goods and services from Canadian SMBs and 1 percent from innovative firms.

To support these efforts, a Small Business Innovation Program will be introduced to help federal departments and agencies meet these targets with regulatory changes and new procurement service standards. The feds plan to provide an update on this in spring 2025.

Capital gains and funding for Black entrepreneurs

On the capital gains taxation front, the FES outlined new rules to permit preferred shares to qualify as eligible small business corporation shares, increase the asset limit from $50 million to $100 million, and extend the reinvestment window to the end of the following calendar year. The Council of Canadian Innovators described this as “a small step toward a US-style QSBS framework.”

The FES also included $189 million over five years starting in 2025–2026 to Innovation, Science, and Economic Development Canada for the Black Entrepreneurship Program, which offers capital, mentorship, and financial planning services to Black entrepreneurs. Launched in 2020, the Black Entrepreneurship Program has been providing funding and support to Black entrepreneurs and SMB owners since then.

In addition to the new measures mentioned above, the feds also committed $29.2 million to train workers in areas like biomanufacturing, clean growth, and semiconductors; promised to reinstate the Accelerated Investment Incentive, which permits faster depreciation of capital investments; promised more details in the coming months regarding the Research and Science Capstone Agency; and indicated their intent to match United States tariffs and trade barriers.

RELATED: Feds struggle to table Fall Economic Statement following Minister Freeland’s shock departure

Returning to the question of whether or not all of these FES commitments will actually come to pass, the answer remains unclear. The federal government may be able to enact some of these measures on its own, while others could require legislation and be subject to votes at a time when support for Trudeau and the Liberals has been rapidly deteriorating.

“It is not entirely clear if the plan will ever see the light of day as some aspects would most likely require legislation,” wrote Scotiabank vice president and head of inclusion and resilience economics Rebekah Young. “That hinges on breaking the current Parliamentary stalemate under a minority government and securing enough support from other parties. This seems increasingly unlikely.”

The surprise resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland hours before the already delayed release of the FES yesterday have thrown the Liberal government into turmoil. Since then, members of the Conservatives, NDP, Bloc Québécois, and multiple Liberal MPs alike have called on Trudeau to step down. Trudeau has yet to respond publicly to these calls and has reportedly considered prorogation or resignation. While he is not immediately stepping down, he is reportedly looking to reflect on yesterday’s events over the holidays.

Feature image courtesy Burst. Photo by Pegleess Barrios.

The post Four new Canadian tech announcements in the Fall Economic Statement that shouldn’t be overlooked first appeared on BetaKit.

Toronto-based fund-of-funds Realize Capital Partners has committed $32.5 million to seven fund managers through Realize Fund I as part of the federal government-backed Social Finance Fund (SFF). 

The recipients include Amplify Capital, Area One Farms, Flowing River Capital Partners, Heartwood Trust, Misfit Ventures, Regenerative Capital Group, and Thrive Impact Fund.

Realize has committed to 16 investments with a value of $67.7 million this year. 

Realize—a joint venture between Toronto impact investment management and advisory organization Rally Assets and early-stage venture capital firm Relay Ventures— is one of three fund-of-fund managers chosen by the Government of Canada to deploy the SFF. 

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 Realize, Toronto’s Boann Social Impact, and Montréal’s CAP Finance.

Many of Realize’s supported funds, such as Amplify, Area One, and Thrive, are women-led, while some are first-time fund managers. As part of SFF, the supported funds have a focus on impacting various social and environmental issues.

For example, recipient Flowing River Capital Partners is a majority Indigenous-owned firm looking to spur economic reconciliation through mostly Prairie-based investments, while Misfit Ventures was founded and is led by members of the 2SLGBTQI+ community looking to invest in ventures led by those who identify as part of the community. 

RELATED: Social Finance Fund-backed Realize Capital Partners reveals first nine investments

“As we build out the portfolio, it is demonstrating that it’s possible to secure risk-adjusted returns alongside strong positive impact,” Realize Fund I portfolio manager Lars Boggild said in a statement. “These new investments bring the portfolio differentiated investment strategies in real assets and real estate as well as more private equity strategies, maintaining focus on financial return goals as well as impact performance goals.”

Realize Fund I has committed to 16 investments with a value of $67.7 million this year. Realize revealed its first investment of $35.2 million CAD across nine other funds last December.

Between 2022 and 2026, Realize is set to receive over $153 million in SFF funding. The firm aims to raise at least two dollars in private investment capital for each dollar of federal support and to help achieve this, Realize has set a target of $405 million for its first fund.

Boann Social Impact exclusively revealed its first investments supported by SFF to BetaKit this past August, having committed nearly $51 million across 13 impact funds and one undisclosed direct investment.

Feature image courtesy Amplify Capital.

The post Realize Capital Partners reveals second round of support for impact-focused funds first appeared on BetaKit.

The Government of Canada barely tabled its Fall Economic Statement (FES) after a day of political chaos and uncertainty.

The Liberal government was thrown into turmoil following the surprise resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland hours before she was scheduled to deliver the feds’ latest economic plan.

The FES was tabled without a speech and with no questions permitted from the House of Commons, despite outcry from MPs.

With no finance minister at the time, House Leader Karina Gould tabled the FES just after 4 p.m. this afternoon, which includes a number of measures aimed at spurring more investment in Canada’s technology sector and domestic businesses more broadly. Facing a glaring hole at one of the most important cabinet positions, the FES was tabled without a speech and with no questions permitted in the House of Commons, despite outcry from Members of Parliament (MPs). 

Shortly thereafter, Dominic LeBlanc was sworn in as the next Minister of Finance, filling one leadership gap in the Liberal government while questions remain at the top. Following Freeland’s resignation and the delayed release of the FES, members of the Conservatives, NDP, Bloc Québécois, and multiple Liberal MPs alike called on Prime Minister Justin Trudeau to step down. Trudeau has yet to respond publicly to these calls or address Freeland’s departure and LeBlanc’s appointment, but is also reportedly considering prorogation or resignation.

Freeland resigned from cabinet earlier today, claiming that Trudeau told her last week that he no longer wanted her to serve as finance minister. In a letter announcing her resignation, Freeland noted that she has been at odds with Trudeau lately regarding the best path forward for Canada at a time when the country faces “a grave challenge” from the United States (US), whose incoming administration is pursuing aggressive economic nationalism, and has threatened 25 percent tariffs.

“We need to take that threat extremely seriously,” Freeland wrote. “That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.”

Her departure comes days after she pre-announced a slew of new federal programs and updates for Canada’s tech sector contained in the FES. 

These include a renewal of the Venture Capital Catalyst Initiative (VCCI) and Scientific Research and Experimental Development (SR&ED) tax credit reform, alongside new programs designed to encourage more private investment in mid-cap growth companies and artificial intelligence (AI) data centres, among other measures.

Today, the federal government outlined plans to renew VCCI for a fourth time and inject up to $1 billion. Under the investment-matching program, the government provides one dollar for every three dollars raised by select indirect fund managers up to a cap. The latest $1-billion VCCI round will include “more enticing terms” for those funds, but no other details were provided. 

The feds are also investing up to $1 billion in mid-cap growth companies to crowd in additional private capital to the growth equity market. The funding will be delivered by a qualified fund manager and concessional, meaning that it provides favourable, low-interest terms for companies. 

RELATED: Liberals’ Fall Economic Statement contains more promises to Canadian tech

According to the FES, the government is developing a program that would provide up to $15 billion in aggregate loan and equity investments for AI data centre projects that receive investments from Canadian pension funds. Those funds must invest at a two-to-one ratio compared to the government, and must become “significant shareholders” in a data centre project. The feds say seven pension funds have already expressed interest and more details will be announced in Budget 2025. 

To attract more investment, the feds are removing the cap that currently restricts pension funds from owning more than 30 percent of a Canadian company, making it easier for them to acquire controlling stakes. 

The Government of Canada has also committed $500 million CAD over four years starting in 2025–2026 for the Business Development Bank of Canada (BDC) to provide financing and expertise to small and medium-sized businesses (SMBs) looking to adopt tech, with a specific focus on AI. This comes shortly after BDC launched a new program to help SMBs figure out how to use AI.

The feds have also promised $150 million over three years starting in 2024–2025 for the Global Innovation Clusters and $24 million over two years beginning in 2025–2026 for the national AI institutes. These measures come in addition to the federal government’s previously announced $2.4-billion AI package in Budget 2024 that includes $2 billion for the Canadian Sovereign AI Compute Strategy and $405 million towards helping AI startups bring new tech to market, boosting AI adoption among SMBs, and other initiatives.

The government is proceeding with long-awaited reforms of the Scientific Research and Experimental Development (SR&ED) program. As of any fiscal year beginning on or after Dec. 16, businesses can now claim capital expenditures on SR&ED tax credits again, reversing a Harper government-era change. Public companies, which previously were entitled to a 15-percent non-refundable tax credit, will be permitted to claim the 35-percent tax incentives for applicable research and development projects. 

The feds are also raising the annual expenditure limit under SR&ED from $3 million to $4.5 million, allowing companies to claim a maximum of $1.575 million per year. The reforms also raise two key eligibility criteria: Companies can access the credit with taxable capital under $15 million, up from $10 million. The phase-out threshold for taxable capital has been raised to $75 million from $50 million. 

RELATED: Feds announce VCCI renewal, SR&ED and pension fund changes ahead of FES

Another new detail from today’s announcement is the federal government’s plan to implement a patent box regime to encourage the development and retention of intellectual property in Canada. The feds said they are currently reviewing feedback from recent consultations and will share details of this regime in Budget 2025.

The Government of Canada also indicated that the launch of its consumer-driven banking framework will not happen until early 2026—not 2025 as promised in last year’s FES—marking yet another delay in Canada’s lengthy quest to implement open banking.

The feds also plan to amend the Income Tax Act to expand what qualifies as an eligible small business corporation share and relax certain conditions for the rule to apply to allow investors to defer the taxation of capital gains on investments. This includes allowing preferred shares to qualify, increasing the asset limit of eligible small business corporations that qualify for investment to $100 million, and to increase the length of the period to acquire new investments to within the year of disposition and one full calendar year following it.

It remains unclear what impact Freeland’s departure has on the plans laid out in the FES. At time of publication, Trudeau and the Liberal caucus (including Minister Freeland) were still in an emergency meeting to discuss the day’s events. The CBC has also reported that as many as 60 Liberal MPs will sign a letter asking Trudeau to resign, echoing repeated requests made across the aisle today.

Canadian business leaders have expressed fear that Freeland’s departure will further erode investment in the country and destabilize its already shaky economy at a time when US President-elect Donald Trump has threatened tariffs. Private calls for an election mirrored public requests from the Conservatives today for a confidence vote, underscored by uncertainty in the continued stability of the federal government.

“Last week, we were encouraged by an announcement from Minister Freeland, which improved the program criteria for the SR&ED tax credit and increased funding for Canada’s venture capital ecosystem,” Council of Canadian Innovators president Ben Bergen said in a statement today. “Today, Chrystia Freeland is gone, and the future of the Liberal government is up in the air.”

“Canadian innovators cannot scale globally on shaky ground—we need strong leadership, not uncertainty, at this critical moment.”

With files from Douglas Soltys and Alex Riehl.

Feature image courtesy Flickr.

The post Feds struggle to table Fall Economic Statement following Minister Freeland’s shock resignation first appeared on BetaKit.

European private equity firm Jolt Capital is making its first Canadian investment by bringing a French semiconductor company’s headquarters to Montréal. 

Jolt Capital acquired some assets from French semiconductor firm Dolphin Design at the end of October and is relocating its head office to Montréal under a newly created entity, Dolphin Semiconductor. The firm is investing $40 million CAD to grow Dolphin’s footprint as a provider of intellectual property (IP) blocks for semiconductor chips. 

Dolphin hopes to become a leading provider of chip subcomponent IP to some of the world’s biggest tech companies.

Dolphin Semiconductor, now 100 percent owned by Jolt Capital, does not manufacture chips itself but rather develops IP for key subcomponents of the chips that power analog-to-digital devices. The acquisition covers Dolphin’s IP for power management and signal processing, typically used in smart devices for voice recognition. These IP activities accounted for about 60 percent of Dolphin Design’s revenue and patents portfolio.

The $40-million investment, to be doled out in tranches, will support Dolphin Semiconductor’s efforts to scale, develop new semiconductor IP, and land “hyperscale, Tier 1” clients. Dolphin hopes to become a leading provider of chip subcomponent IP to some of the world’s biggest tech companies. 

RELATED: Feds, province contribute nearly $85 million to IBM’s Québec semiconductor expansion plans

The new Montréal company will be headed by Laurent Monge, the former president of France-based Metrologic Group, which makes software solutions for manufacturers. 

Dolphin already had a subsidiary presence in Montréal, with about 40 employees. But now, it will be well-positioned to add talent within Québec’s semiconductor hub, according to Claude Jean, an executive vice president at Teledyne Digital Imaging, who will join Dolphin’s board as an independent member.

“It’s striking how much Quebec universities were able to maintain a very, very rich semiconductor program, although semiconductor manufacturing was offshored massively,” Jean said in an interview with BetaKit. 

Bromont, Que., is home to Technum Québec, one of the province’s three government-designated innovation zones. Semiconductor players such as IBM, Teledyne, and Nord Quantique are stationed there. Bromont and Montréal are both part of the Northeast Semiconductor Manufacturing Corridor, which stretches down the northeastern coast to New York City. The bilateral corridor was established to boost semiconductor reshoring efforts. 

Jean added that Dolphin’s semiconductor design champions energy efficiency, which gives it an edge. 

“One of the biggest challenges that the world is facing right now is the power consumption of AI,” he said. 

Part of Dolphin’s growth strategy will involve creating stronger commercial ties with US companies, due to its large chip manufacturing market. 

Jolt Capital, a French firm managing nearly 600 million euros ($900 million CAD), opened its first Canadian headquarters in Montréal this summer. In an interview with BetaKit, managing partner Jean Schmitt said he was drawn to Canada due to the tech investment opportunity. 

RELATED: French private equity firm Jolt Capital to open North American headquarters in Montréal

“A tsunami of startups are getting funded early on, that are developing good tech, and then they reach a state where they’re just too big for VC … and they’re way too small for buyout,” said Clément Bourgogne, Jolt Capital investment director and lead for Canada. “But there’s no one to really support them in that stage of growth.” 

Bourgogne, formerly COO of Scale AI, said that Dolphin Semiconductor is a perfect example of Jolt’s investment targets: mid-sized deep tech companies that generate their own IP. 

Jolt was founded in 2011 and invests in mid-sized European deep tech firms bringing in annual revenue of between 10 million and 50 million euros ($14.8 million and $74 million CAD). Applied AI, semiconductors, cybersecurity, photonics, and robotics are some of its target sectors. The private equity firm developed its own database search tool to identify target companies within its investment window, called Jolt.Ninja. 

Beyond breaking into Québec’s semiconductor industry, Jolt Capital has big plans for Canadian investments. The firm sees Canada as a strategic market that will allow its European portfolio companies to expand into North America. Bourgogne told BetaKit that the firm is raising its first dedicated Canadian fund next year, with an objective of between $100 million and $150 million. 

“That’s also part of the strategy,” Bourgogne said. “Try not to go too fast in Canada, do things methodically. We want to deploy our model here, and we want to do it sustainably.”

Feature image courtesy Jolt Capital.

The post Jolt Capital moves newly acquired French semiconductor carveout to Québec first appeared on BetaKit.

Calgary-based medical device startup Fluid Biomed has secured $27 million USD in Series A funding to fuel the development of its innovative stent for brain aneurysms.

Fluid Biomed aims to build “the world’s first bioabsorbable stent for the brain.”

Founded in 2012 by a pair of academic neurosurgeons who are also University of Calgary professors, CEO Dr. John Wong and president and CTO Dr. Alim Mitha, the pre-revenue, clinical-stage medtech startup is building what Wong claims is “the world’s first bioabsorbable stent for the brain.”

“As clinicians, we came up with the concept,” Wong told BetaKit in an interview. “As scientists, we developed the idea in the research lab at our university, and as entrepreneurs, now we are commercializing the idea.”

Fluid Biomed’s flow-diverting brain stent is constructed of bioabsorbable polymer and metal, a move away from stents traditionally made purely of metal. The startup plans to use this Series A funding to validate the device in more expanded human clinical studies.

The all-equity, all-primary round closed last month. It was co-led by Canada’s Amplitude Ventures and an undisclosed “major strategic investor” from the medical space that Wong declined to name to BetaKit, but claimed offers a “pathway forward” to commercialization.

Fellow new backers LifeArc Ventures, out of the United Kingdom, and United States (US)-based IAG Capital Partners also participated, alongside existing US investors ShangBay Capital and METIS Innovative. Wong declined to disclose Fluid Biomed’s valuation.

This represents a sizeable medtech Series A round. Fluid Biomed claims that the company’s latest financing represents Canada’s largest medtech Series A of 2024 for any medical device company.

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

A brain aneurysm is a bulge or ballooning in a blood vessel in the brain that can ​​leak or rupture, which can lead to a stroke. According to Wong, there are two ways to treat brain aneurysms. One involves opening up the skull and installing a clamp. The other is using stents, which are typically installed in a less invasive way. 

But Wong argued that existing, pure metal stents have key limitations: they stay in the body forever, increasing the risk of clot formation; they require patients to stay on blood thinners for the rest of their lives; and they cause interference with CT and MRI scans, which can lead to angiograms, which are more invasive, being required.

Fluid Biomed’s stent, which is made primarily of polymer with a small portion of metal, is designed to disappear over time, which the founders claim will allow blood vessels to heal better than with pure metal stents. Wong noted that polymer is used elsewhere in the body as part of approved products, and is softer than metal, which he said enables it to fit into more blood vessels and spots than existing devices. 

He claimed this polymer-based device also enables clinicians to see the brain more clearly than pure metal alternatives. The startup’s stent is designed to be installed through a blood vessel in the groin during an in-hospital procedure guided by X-ray using tiny tubes and catheters.

RELATED: Belgian VC Theodorus relocates to Canada under new name to target early-stage life sciences startups

The Series A round brings Fluid Biomed’s total funding to $32.5 million, a figure that includes $4.7 million in seed funding from mid-2021. Shortly after that financing, Wong said the company rebranded from Fluid Biotech to its current name, Fluid Biomed, to convey that it is focusing more on the medical market than the pharmaceutical space.

Since that financing, Fluid Biomed has continued developing its product, publishing research, and conducting its first in-human clinical study. The startup views this funding as a way to help it reach a “larger, pivotal-type study”—the kind that would be required by regulators.

“Our focus now is … validating it in rigorous pre-clinical studies to get to the larger patient trials,” Mitha told BetaKit.

Amplitude, which had been tracking Fluid Biomed for years, was excited by the company’s recent progress and the interest it had garnered from strategic players.

RELATED: Amplitude Ventures closes $263-million for second precision medicine VC fund

“We have a mix of everything,” Amplitude Ventures co-founder and partner Jean-Francois Pariseau told BetaKit in an interview. “Great technology, superb founders, and a very good team … teaming up with world-class investors and strategic partners.”

Pariseau described Fluid Biomed as “the perfect fit” for Amplitude, which closed its second precision medicine venture capital fund earlier this year at $263 million CAD. He noted that Amplitude typically targets Canadian companies with early proof-of-concept and multiple shots on goal. “Fluid really fit that bill,” he said.

While Fluid Biomed is still years away from securing regulatory approval for its product from Health Canada and the US Food and Drug Administration, Pariseau noted that the device has already demonstrated results with initial patients, and said he sees potential down the road for the startup to apply it to the cardiovascular space.

Wong said Fluid Biomed is focused on getting to market as soon as possible, but declined to share an exact timeline. For now, the startup plans to conduct an early feasibility study and another clinical trial in Europe in 2025. Fluid Biomed plans to use the data from these studies to support a larger patient trial in the US and Canada.

Feature image courtesy Fluid Biomed.

The post Fluid Biomed closes $27-million USD Series A to fund expanded human clinical studies first appeared on BetaKit.

The feds announced some Canadian tech sweeteners Friday, including a fourth VCCI indirect investment fund, changes to the SR&ED tax credit program, and a bunch of new incentives for pension funds to invest domestically.

Madison McLauchlan has all the details on the announcement, including what those acronyms mean.

The timing of the announcement stands out: one business day before the Fall Economic Statement and two before the House of Commons breaks for the holidays. Like with its AI compute commitments before Budget 2024, this government likes to pre-announce its announcements, but the shortened timeframe seems silly. Multiple observers I spoke with openly wondered what shoe might drop on Monday that separating the tech commitments seemed like sound messaging strategy, but we won’t have to wait long to find out (update: Chrystia Freeland resigned today as Finance Minister).

More frustrating is the Fall Economic Statement’s proximity to the holidays. While winter technically doesn’t begin until December 21, this year’s statement comes weeks later than any since 2016, and even beats out the Economic and Fiscal Updates in the election years of 2019 and 2021.

As a former liberal arts major, I deeply know the virtue of submitting a paper late than never. But the homework, when late, should be complete.

Friday’s SR&ED announcement contained no mention of a patent-box regime to incentivize domestic intellectual property creation, although that might come Monday. What’s less likely to come Monday is legislation for a consumer-driven banking framework, despite public consultations ending in September and a commitment in last year’s statement that open banking would go live in 2025.

With a federal election guaranteed by Oct. 20 of next year, and the omnipresent threat of one to resume when Parliament returns Jan. 27, it’s unlikely we’ll see much movement on these files, along with Bill C-27 and its AIDA provision, or the Canada Innovation Corporation, which the feds delayed until after the election. It also means that the Liberals’ eventual election platform will likely include the commitment to execute several previously made election commitments.

This federal government’s inability to deliver a cohesive innovation strategy on time and to spec is one of BetaKit’s biggest Canadian tech stories of the year, which we’ll begin to roll out starting Monday. It’s not too late to get your take (or perhaps a 2025 prediction) in under the wire, so email me now. 

Douglas Soltys
Editor-in-chief

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TOP STORIES OF THE WEEK

Feds announce VCCI renewal, SR&ED and pension fund changes ahead of Fall Economic Statement

The Government of Canada has announced a fourth, $1-billion CAD round of funding for the Venture Capital Catalyst Initiatives among a slew of other initiatives and updates ahead of its delayed Fall Economic Statement. 

The feds plan to make it more attractive for Canadian pension funds to invest domestically with two matching programs: $1 billion for mid-cap growth companies and up to $45 billion to develop AI data centres. The government also announced updates to the Scientific Research and Experimental Development (SR&ED) program, expanding both the eligibility requirements and tax incentives. 

“Canada needs to fight harder than ever for capital, including facilitating and supporting the investment of Canadian capital here at home,” Finance Minister and Deputy Prime Minister Chrystia Freeland said in a statement.

Geoffrey Hinton decries tech companies chasing “short-term profits” in Nobel Prize acceptance speech

Following an introduction of orchestral Wagner, University of Toronto professor Geoffrey Hinton crossed the stage of the Stockholm Concert Hall and, with a firm handshake and a bow, officially accepted a Nobel Prize in Physics from the King of Sweden for his contributions to the field of artificial intelligence (AI). 

The British-Canadian citizen is the fourth person from a Canadian institution to win the prestigious science award in the past decade, and will see his name go down in history with the likes of Albert Einstein, Niels Bohr, and Werner Heisenberg.

The award ceremony was followed by an elaborate banquet, where Hinton used his time on stage to deliver a brief but urgent warning on the future of humanity and AI, and decried technology companies motivated by short-term profits. 

TikTok challenges feds’ shutdown order, calls national security review process “procedurally unfair”

TikTok has filed a challenge to the federal government’s Nov. 6 order to wind up its Canadian operations, saying the decision was “driven by improper purposes” and alleging that federal representatives failed to substantially engage with the company during the national security review process.

In its filing, TikTok calls the order “unreasonable,” “grossly disproportionate,” and that the company was owed a “heightened duty of procedural fairness.” 

The federal government has been taking on big tech companies on many different fronts recently. This past week, the Privacy Commissioner of Canada announced that social media platform LinkedIn agreed to voluntarily pause using the personal information of Canadian members to train its generative artificial intelligence models.

“Personal information, even when it is publicly accessible, is subject to privacy laws and must be adequately protected,” the commissioner said in a statement. 

Alberta Enterprise Corporation launches Accelerate Fund IV with $15 million to back early-stage tech startups

Alberta Enterprise Corporation has launched its fourth early-stage, Alberta-focused angel co-investment fund with a $15-million CAD anchor commitment.

The launch marks the first close of Accelerate Fund IV, which aims to raise a total of $25 million from institutional investors, family offices, high-net-worth individuals, and other strategic players to back pre-seed and seed-stage Alberta technology startups. 

“As we managed Fund II and Fund III, we discovered life sciences, digital transformation, and artificial intelligence are areas where Alberta has standout strengths in technology innovation,” Accelerate Fund II, III, and IV investment manager Arden Tse of Yaletown said in a statement.

The Canadian Space Mining Corporation thinks it can put a nuclear reactor on the moon by 2029

At the end of November, Toronto-based space tech startup CSMC signed a memorandum of understanding and licensing term sheet with Canadian Nuclear Laboratories to explore commercializing the technology behind the Canadian-made SLOWPOKE-2 nuclear reactor. 

The ultimate goal? Provide the power for people working and doing research on the moon.

“We put together a plan for Canada to put a reactor on the moon, well ahead of any international competitors,” CSMC CEO Dan Sax told BetaKit in an interview. “That drew us, very early on, to the SLOWPOKE, which was right in line with the power scales needed by NASA and the international community.” 

Holiday Reading: Who’s after CEO Tom Oliver?

Just in time for the holidays, Shelley Grandy’s mystery novel “Devious Web” is available in digital or paperback formats.

As he considers a US $250 million acquisition offer for his data analytics company, Pellucid, CEO Tom Oliver becomes the target of a nefarious plot. A suspenseful journey through Toronto, Caledon, Georgian Bay, and the US, Devious Web follows the twists and turns of M&A, disappearing company funds, and CEO safety.

If you enjoyed “Suits” and “Succession,” this book is for you. 

Treat yourself or gift it to your team. Order your copy today.

Weekly Canadian Deals & Dollars

• SF – Canadian-founded D-Wave raises $175M USD in stock sale
• VAN – Spexi secures $16.2M CAD Series A for drone image network
• CGY – Absorb to acquire Together for undisclosed amount
• LON – Paystone to acquire Ackroo for $21M CAD
• TOR – FinTech startup Cyder secures $1.5M CAD pre-seed round
• TOR – Cookin acquired by CookUnity in all-stock transaction
• MTL – Flare raises $42.5M CAD Series B for cybersecurity software

The BetaKit Quiz

This week: Google’s quantum leap, Hinton’s Nobel Prize, and Medicago’s second shot

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.​

Feature image courtesy Flickr.

The post Liberals’ Fall Economic Statement contains more promises to Canadian tech first appeared on BetaKit.

The Government of Canada has announced a fourth, $1-billion CAD round of funding for the Venture Capital Catalyst Initiative (VCCI) among a slew of other initiatives and updates ahead of its delayed Fall Economic Statement. 

Under VCCI, the federal government provides one dollar for every three dollars raised by select indirect fund managers up to a cap.  The latest $1-billion VCCI round will include “more enticing terms” for those funds, but no other details were provided. 

In addition to renewing VCCI, the feds also plan to make it more attractive for Canadian pension funds to invest domestically with two other matching programs: $1 billion for mid-cap growth companies and up to $45 billion to develop AI data centres. The government also announced updates to the Scientific Research and Experimental Development (SR&ED) program, expanding both the eligibility requirements and tax incentives. 

“Canada needs to fight harder than ever for capital.”

Chrystia Freeland
Deputy Prime Minister

Finance Minister and Deputy Prime Minister Chrystia Freeland announced the moves today while speaking at TMX Group in Toronto.

“Canada needs to fight harder than ever for capital, including facilitating and supporting the investment of Canadian capital here at home,” Freeland said in a statement. 

As of next fiscal year, the SR&ED program will allow businesses to claim capital expenditures again, reversing a Harper government-era cut. Public companies will also be permitted to claim the 35-percent tax incentives for research and development (R&D), when they previously could only claim 15-percent, non-refundable credits.

The feds are also hiking the annual expenditure limit from $3 million to $4.5 million, allowing companies to claim up to $1.575 million per year. The SR&ED credit is currently applicable for companies with taxable capital under $10 million, but that has been upped to $15 million. Now, companies can continue receiving tax credits until a phase-out threshold of $75 million, rather than $50 million.

“SR&ED has been a crucial tool for fostering innovation, but has been somewhat challenging for companies progressing beyond early-stage R&D,” said Aliya Ramji, co-founder and partner at MT Ventures, at today’s press conference.  “I’m sure I speak for my colleagues in the industry when I say that I’m heartened to see that you and our government recognize the vital importance of the innovation research and development sector.”

Council of Canadian Innovators (CCI) President Benjamin Bergen said that though the expanded tax credit eligibility is positive, the updates to SR&ED do not go far enough.

“We had hoped to see the federal government take meaningful steps to stop subsidizing the R&D of foreign multinationals that contribute much less to the Canadian economy than homegrown companies, and we had hoped that the government would bring more transparency to SR&ED,” Bergen wrote in a statement.

In February, CCI released recommendations for SR&ED reform amid an ongoing program review by the federal government. The organization, which represents the interests of Canadian scaleups, advocated for the program to incentivize domestic intellectual property (IP) creation through a patent-box regime. A patent box regime would give tax breaks to profits generated from domestic IP. CCI also called on the government to ensure the program does not help fund R&D projects where the IP ends up owned by foreign companies. 

Some in the Canadian tech industry believe that the existing SR&ED rules precluded companies with long-term research needs, such as life sciences companies, from accessing critical incentives. At the BetaKit Town Hall: Vancouver in October, AbCellera vice-president of business development Anne Stevens said that companies who need to go public earlier lose out on tax credits.

Freeland announced a slew of programs and rule changes to incentivize domestic pension fund investment, which has been a topic of national debate in recent months.

To attract more investment, the feds are removing the cap that currently restricts pension funds from owning more than 30 percent of a Canadian company, making it easier for them to acquire controlling stakes. 

The government is also committing $1 billion to invest alongside pension funds in mid-cap growth companies, putting in one dollar for every three from pension fund managers. Freeland said the investments will be concessional, or with favourable terms, and made by a qualified fund manager. 

The second program will dedicate a maximum of $45 billion in loans and equity to develop AI data centres, contingent upon two-to-one investor interest from pension funds. The Globe & Mail reported that the concerned data centres would have to be powered by green energy, but today’s announcement made no mention of energy requirements. 

“Together, these initiatives are positive steps toward fostering a stronger, more innovative private capital market in Canada,” the Canadian Venture Capital Association said in a statement. 

Freeland noted that she will have more to say about these measures on Dec. 16 when she delivers the federal government’s Fall Economic Statement. No longer fall, this year’s statement comes later than in previous years and just one day before the federal government breaks for the holidays.

With files from Josh Scott.

Feature image courtesy Wikimedia Commons.

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Feature image courtesy The Nobel Foundation via YouTube.

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Toronto Venture Stock Exchange (TSXV)-listed Ackroo has agreed to be acquired by London, Ont.-based Paystone, a fellow marketing, payment, and point-of-sale (POS) solutions company. 

The all-cash transaction will see Paystone acquire all of the issued and outstanding shares of Ackroo at a price of $0.15 CAD per share, as well as assume all of its assets and liabilities, including a $3-million debt to the Business Development Bank of Canada. The value of the transaction is approximately $21 million and represents a 25 percent premium over Ackroo’s closing price before the transaction was announced. 

“Given the current state of the capital markets, it was in the best interest of the company to pursue this transaction.” 

Steve Levely
Ackroo

Ackroo, based just outside of Hamilton in Stoney Creek, Ont., has been on the TSX since 2012. Its stock debuted at a price of $2.70 per share but has consistently traded below $0.50 since 2014. The last time Ackroo stock was valued at the purchase price of $0.15 per share was November 2021. 

Ackroo CEO Steve Levely said in a statement that, since taking over Ackroo in May 2014, his goal was for Ackroo to accrue value through market consolidation until Ackroo was consolidated itself. 

“Speaking on behalf of the board, we believed, at this stage of the business, and given the current state of the capital markets, it was in the best interest of the company to pursue this transaction, which creates a liquidity event for shareholders while positioning Ackroo’s product, team and clients to be able to benefit from a much larger private organization,” Levely said. 

A number of Canadian tech companies have opted to go private in 2024, including Montréal-based payments company Nuvei as well as MDF Commerce, Q4 Inc, and TrueContext. Payments giant Lightspeed Commerce is currently entertaining a similar move as it conducts a strategic review of the business. 

RELATED: Nuvei posts revenue growth in final earnings as go-private deal gets green light

According to Ackroo, Levely and “another arm’s-length shareholder” will be deferring payment for their shares by 12 months following transaction close. According to the acquisition agreement, Ackroo can terminate the transaction if Paystone hasn’t acquired a commitment for debt financing that would meet the offer price. If the transaction is terminated under certain circumstances, Paystone is entitled to a fee of $750,000. 

The companies expect the transaction to complete in February 2025, at which point Levely will also assume the role chief operating officer at Paystone. 

Founded in 2000, Ackroo offers customer loyalty, gift card, and POS services to merchants of all sizes. Its cloud-based marketing platform helps merchants track loyalty, promotions, and gift cards at the point of sale. The company has sustained itself on growth through acquisitions, having acquired 13 companies to date. In 2023, Ackroo acquired two American companies in client engagement startup Simpliconnect for $2 million USD ($2.7 million CAD) and eGift card business GiftFly for $350,000 USD.

Founded in 2009, Paystone has a similar business model, providing payment processing, customer loyalty, and gift card services to merchants while expanding through acquisitions. Paystone purchased Canadian Payment Services, its sixth acquisition, in 2022. The move followed Paystone arming itself with several rounds of funding totalling $99 million in 2021 to fuel both its international expansion and acquisition plans. 

Image courtesy Blake Wisz via Unsplash.

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An international collaborative mission to return humans to the moon is underway, and the Canadian Space Mining Corporation (CSMC) is taking steps to be part of the team. 

“This is a technology Canada developed, which no one has tried to commercialize in 40 years.” 

Dan Sax
CSMC

At the end of November, Toronto-based space tech startup CSMC signed a memorandum of understanding (MOU) and licensing term sheet with Canadian Nuclear Laboratories (CNL), part of the federal Crown corporation responsible for nuclear research, to explore commercializing the technology behind the Canadian-made SLOWPOKE-2 nuclear reactor. 

The ultimate goal? Provide the power for people working and doing research on the moon. 

“We put together a plan for Canada to put a reactor on the moon, well ahead of any international competitors,” CSMC CEO Dan Sax told BetaKit in an interview. “That drew us, very early on, to the SLOWPOKE, which was right in line with the power scales needed by NASA and the international community.” 

The SLOWPOKE-2 is a nuclear reactor historically used for research, and only three of the eight ever made are still in commission: one at the Royal Military College of Canada, one at École Polytechnique in Montréal, and one at the University of the West Indies in Jamaica. According to Sax, the reactor generates heat and is used to teach students how to use nuclear reactors for research. 

However, with some modifications to help scale up its power and convert that energy into electricity, Sax told BetaKit that this reactor could power future lunar operations. 

“We’ve managed to cut off a significant amount of time and cost to the development of a [nuclear] reactor,” Sax said. 

Sax said he was inspired to create CSMC as conversation around Artemis, NASA’s international collaboration to return astronauts to the moon, heated up. Natural Resources Canada also highlighted the importance of space mining in its 2020 Minerals and Mining report. As he looked into it, he realized “No one was actually doing anything about it.” 

RELATED: New funding for Kepler and Wyvern headline busy month in Canadian space tech

Sax, who comes from a real estate financing background, described the founding of CSMC in 2021 as the product of an existential crisis during the early days of the COVID-19 pandemic.

“I reflected back on the 15 years that I’d spent in real estate, and I wasn’t really sure what it achieved,” Sax said. “ I worked on $4.5 billion in deals, and investors made money, and there was some small scale impact, but I realized that I wanted to have impact at planetary scale.” 

Sax said it dawned on him early on that energy would be the “gating factor” limiting the presence of humans on the moon, due to the harsh lunar environment. The days and nights on Earth’s only moon are two weeks long each, with temperatures fluctuating between 121 C during the day to -133 C at night, according to NASA. 

The long nights disqualify solar power, while the wild variance in temperature can break other kinds of infrastructure, according to Sax, so he began exploring nuclear power. That led CSMC to CNL, the owner and manager of the patent for the SLOWPOKE, which Sax describes as “effectively Crown technology.” 

“This is a technology Canada developed, which no one has tried to commercialize in 40 years, and we’ve been working on doing so for three [years].”

So, what makes the SLOWPOKE-2 an attractive option for space-faring? Well, Sax describes the size of the microreactor as comparable to an aluminum trash can — and in space, minimizing mass is everything. 

“Mass is a massive constraint and a massive cost; everything is like a cost per kilogram,” Sax explained. “We think we are lower mass than all the international competitors, and that’s a major strategic advantage for Canada.” 

While the stars aren’t exactly aligning for the Artemis mission, as NASA and the Canadian Space Agency announced a delay earlier this month, the MOU also outlines exploring the use of SLOWPOKE-2 in powering arctic communities.

The bonus use-case for the reactor is meant to support the federal government’s net-zero carbon emissions goals, as well as its mandate to eliminate the use of diesel generators in the arctic by 2030, according to Sax. 

Once it can, CSMC is looking to deliver dozens, if not hundreds, of reactors to the Arctic for Indigenous communities to replace diesel generators with. Sax touted the 10-year fuel life of the reactor, meaning less logistical concerns in delivering fuel, and much less environmental damage from diesel emissions. 

The Arctic is heating up much faster than the rest of the planet, Sax pointed out: “That will kill us all at some point in time if that trend continues.” 

He estimated that a single reactor could start by powering a small remote community of roughly 50 homes and scaling up from there. 

While an MOU is only a first step, and full agreement negotiations are currently taking place, Sax said CSMC is currently raising financing and government support. With financial backing from the Canadian Space Agency, CSMC is finalizing its conceptual design for the SLOWPOKE, which is expected to be completed next year. That makes way for the detailed design process, which will then lead to the construction of a demonstration reactor to prove the new-and-modified SLOWPOKE-2 is safe to sell. 

As CSMC works down the list of requirements, Sax estimated that his company can be ready to put nuclear power on the moon by 2029, as long as everything else is in place. 

“I think we’re just trying to make sure that Canada is ready, that it’s capable, and that its capabilities outmatch any of the international partners.”

Feature image by Arya Winarto via Unsplash.

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D-Wave Quantum has raised $175 million USD ($246 million CAD) in gross proceeds through a recent stock sale.

The Canadian-founded, New York Stock Exchange (NYSE)-listed quantum computing company plans to use this capital to fuel its technical development efforts and business operations. Following this financing, D-Wave expects to close out 2024 with at least $160 million in cash.

D-Wave generated $1.9 million in revenue and a net loss of $23 million in Q3.

In a statement, D-Wave president and CEO Alan Baratz said that the fundraise “substantially improves the company’s financial strength, positioning D-Wave for the future and enabling us to fully execute against our product and go-to-market strategies and roadmaps.”

Founded in 1999, D-Wave builds and sells quantum computing systems, software, and services. D-Wave has raised hundreds of millions of dollars to date and spent 25 years developing its quantum computing tech, but the company remains in the early stages of building a sustainable business as it continues to incur heavy losses.

During the third quarter, D-Wave generated approximately $1.9 million in revenue, a 27 percent drop year-over-year, according to its latest earnings report. The company’s operating expenses were $21.7 million and its net loss was nearly $23 million, up nine percent and 41 percent respectively relative to the same period last year.

The quantum computing firm went public on the NYSE just over two years ago through a merger with a special purpose acquisition company in 2022. D-Wave, which became a Delaware-domiciled corporation as part of the transaction, had initially hoped to raise up to $340 million via the deal, but secured only a fraction of that amount, leaving it facing a cash crunch.

Last summer, the company lost its outside accounting firm and shared plans to move its principal executive office from Canada to the US. Though D-Wave now lists its headquarters as Palo Alto, Calif. on LinkedIn, the company still has operations in Burnaby, BC, where its quantum engineering centre is located, and a strong presence in Canada.

RELATED: Is Québec Canada’s quantum province?

Over the past two years, D-Wave has faced multiple non-compliance warnings for failing to meet the NYSE’s continued listing standard for minimum stock price, as its shares repeatedly fell below $1 apiece for more than 30 consecutive days.

At time of publication, D-Wave’s shares are trading at $3.91 apiece—down nearly 64 percent since the company went public in mid-2022, but up 320 percent over the past year.

In 2024, D-Wave expects it will have lost less than the $54-million adjusted earnings before income, taxes, depreciation, and amortization loss the company posted last year.

Feature image courtesy D-Wave.

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Montréal-based Flare has raised $30 million USD ($42.5 million CAD) in Series B financing to scale its cybersecurity threat monitoring software in North American and European markets. 

The all-primary, all-equity round was led by San Francisco firm Base10 Partners, with Québec-based backing from Fonds de solidarité FTQ and returning investors Inovia Capita and White Star Capital, along with what the company called some “minor” undisclosed investors. 

Flare generates reports of potential threat activity on the dark web for security teams to monitor.

Flare says its software automates digital threat monitoring by trawling the open internet and the dark web for cybercrime, like the theft of company credentials or data leaks. The dark web, the epicentre of anonymous and criminal activity online, includes content that is not accessible through standard search engines and requires specialized software or permissions to access. 

With the new funding, the company plans to scale its market efforts in North America while investing in EU expansion. Flare CEO Norman Menz added in an email that the financing will also help grow his team of 100 while improving its product through artificial intelligence (AI) integration. 

Stealing login credentials has become a more common method of cybercrime than good old-fashioned break-ins, Menz told TechCrunch. In response to this evolving threat, the company has rolled out a feature that detects leaked login information and proactively resets passwords before bad actors can use them. 

RELATED: Flare Systems eyes US expansion following $9.5 million Series A funding

Flare claims its software sets it apart from competitors in the threat exposure management space because of its expansive dataset, including from sources like darknet marketplaces, leak and dump websites, and private Telegram rooms. 

Through its new Threat Flow feature, Flare’s platform generates reports of potential threat activity on the dark web for security teams to monitor. The tech is based on research conducted by Flare in collaboration with the School of Criminology at the Université de Montréal and Complexity Science Hub using the OpenAI GPT-3.5 Turbo large-language model (LLM). The resulting published white paper analyzed 500 conversations from three cybercrime forums and claimed using an LLM to detect threats was accurate 98 percent of the time.

The startup was founded in 2017 by COO Yohan Trépanier Montpetit, CTO Mathieu Lavoie, and chief architect Israël Hallé, previously a developer at Shopify. In 2022, the company raised a $9.5-million CAD Series A to expand into the US. The new financing brings the company’s total raised to at least $53 million CAD. 

White Star and Inovia were both previous investors, but Base10 Partners is a new addition that Menz said Flare encountered late in the fundraising process, adding that their values “resonated brilliantly” with Flare’s team culture.

Though Flare’s software began as a cybersecurity tool for financial institutions, the company’s client base has now expanded to the health, pharmaceutical, and tech sectors. 

RELATED: NCC commits $22.8 million to 37 cybersecurity projects

Despite growth in the cybersecurity tech sector, human error remains a leading threat to data security. A 2022 federal report found that 93 percent of data breaches among public servants were due to humans mishandling data. And with the rise of LLM use, more sensitive data is being inputted into chatbot prompts. 

Despite concerns about whether employees are using AI securely at work, there is some indication that AI tools can effectively reduce cybersecurity risks. A recent IBM report found companies that automated some cybersecurity operations spent an average of $2.84 million CAD less per year on resolving data breaches and resolved them more quickly. Now, 61 percent of Canadian companies are using some kind of AI or automation tool to prevent cybersecurity breaches. 

The federal government has also taken notice of the trend. In October, the National Cybersecurity Consortium committed $22.8 million to put government money toward 37 cybersecurity projects. 

Feature image courtesy Vadim Daniel Photography.

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Aliya Ramji, co-founder and partner of MT>Ventures, believes that a company’s success is not just decided by the faces on its cap table.

“We often think of VCs as being the arbiters of who’s going to win or lose in this sector,” Ramji said. “In reality, there is an entire ecosystem at play, especially in Canada.” 

“We’re not just here for your Series A, B, or C. Our team recognizes that you have problems in between.”

MT>Ventures, co-founded and led by Ramji, is part of that ecosystem.

Despite what its name might suggest, it isn’t a venture capital firm, a private equity fund, or an incubator. It’s a legal practice within one of Canada’s most established law firms, focused on providing unique support to tech startups.

Instead of getting involved only in high-profile transactions, the team embeds itself into the day-to-day realities of startup life, helping founders navigate everything from employment contracts to regulatory hurdles, and tapping into the firm’s larger network to facilitate meaningful connections.

This hands-on approach to legal support, combined with an unconventional billing model, are built on Ramji’s belief that the right legal support can be just as pivotal to a startup’s success as its financiers.

The guardrails to growth

After earning her Juris Doctor from Queen’s University, Ramji began her career in pharmaceutical patent litigation and trademarks. From there, she moved to an in-house legal role at Canadian Standards Association and pursued a master’s degree in law at New York University.

While these experiences sharpened her understanding of business and regulations, Ramji’s perspective on legal services shifted dramatically in 2014, when she joined Figure 1, where she ran legal and corporate affairs.

The environment was high-stakes and fast-paced, with Figure 1 expanding its platform from six to 196 countries in just over a year. It was Ramji’s front row seat to the interplay between law and business decisions.

“Startups are going to move fast and break things,” she said. “The lawyer is both guardrail and facilitator for the organization. When you’re on the inside of a company, you really understand that.”

Her work at Figure 1 caught the eye of McCarthy Tétrault, one of Canada’s oldest and largest law firms, which approached her in 2019 with an offer to let her build something new for the country’s tech sector.

“A lot of the other big firms had emerging markets or emerging tech practices, and McCarthy’s knew it had something unique to contribute to the sector,” she said.

Thinking like a VC

Today, MT>Ventures has carved out a role as an embedded legal partner for startups, blending legal smarts with strategic guidance and the ability to make valuable connections. It has grown its portfolio of clients to include ReturnBear, proptech companies Requity Homes and Placeholder, Walnut Insurance, and cleantech startup Canada’s Forest Trust.

While MT>Ventures fundamentally operates as a legal practice, Ramji said its approach mirrors the focus and strategy of a venture firm. That means the team doesn’t take on every prospective client. 

“We’re picking the companies that we believe will go through life stages and will win the market,” Ramji said, adding the firm generally targets startups between pre-seed and Series B, though many others are bootstrapped.

For Ramji, picking winners requires a thorough diligence process not unlike that of an investor. “The most important thing to me is the founding team, and whether they’re more obsessed with the problem than anyone else in this space,” she said.

MT>Ventures specializes in complex industries where startups face larger legal and regulatory challenges, such as healthtech, cleantech, proptech, and EdTech. 

To guide these companies through multiple stages of growth, Ramji and her team also introduce them to potential partners, suppliers, and advisors. They do this by drawing on McCarthy Tétrault’s broad client base in areas like tax law, real estate, and municipal law, among other areas.

“We have 800 people that we can make introductions for our clients,” Ramji added. “I think that makes for a really nice ecosystem within the firm itself.”

More than a deal-closer

Ramji believes MT>Ventures stands out from other tech-focused legal practices in Canada. 

“We’re not just here for your Series A, B, or C,” Ramji explained. “Our team recognizes that you have problems in between those rounds.”

To support that differentiation, MT>Ventures created one of the practice’s most unique features: its pricing. While most legal firms bill hourly for their services, MT>Ventures offers a monthly fixed-fee billing model. 

While some of MT>Ventures’ services do operate on the billable hour model, Ramji said the monthly option gives startups more predictability as they budget for legal services, and allows MT>Ventures to be more of a partner than merely a deal-closer.

“Startups are managing talent, creating supplier agreements, dealing with regulatory challenges,” she added. “Those issues come up constantly, and the billable hour doesn’t make sense in that context.”

A different measure of success

As MT>Ventures grows, Ramji aims to prioritize impact over volume. She hopes to maintain a client base of 75 to 100 startups—small enough to maintain quality of service.

“Anything past that, and you’re not able to think about all your clients on a regular basis. It becomes very transactional,” she added.

MT>Ventures’ approach also shapes how it measures success for the startups it supports. While the firm provides guidance on funding rounds and other deals, Ramji said the true markers of success go beyond transactions, and instead include more tangible progress, like building strong teams and expanding into new markets.

For Ramji, MT>Ventures’ own success is reflected in its clients’ ability to reach those milestones.

“We’re really in it to win it with them,” she added. “We want to help startups focus on their vision and let us handle the opportunities and obstacles along the way.”

PRESENTED BY

If you are a founder or a startup looking for counsel, learn more about MT>Ventures.

Photos provided by MT>Ventures.

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Calgary-based learning technology company Absorb Software has reached a deal to buy Canadian mentorship platform Together Software.

The two companies plan to integrate Together’s mentorship software into Absorb’s broader learning management system (LMS) and product ecosystem.

Together co-founder and CEO Matthew Reeves told BetaKit that the two tech companies decided to join forces because there is a “natural fit” between their products.

“Together stood out for its leadership in mentorship and coaching—key components of effective employee development.”

The transaction is expected to close later this month, after which Together will become a wholly-owned subsidiary of Absorb. Both companies declined to disclose the acquisition price to BetaKit. Reeves claimed that the primarily cash deal was “priced on a healthy revenue multiple.” 

As part of the acquisition, Reeves said that all 35 of Together’s employees are staying on and Absorb plans to invest in Together to expand its team.

In a Dec. 10 blog post announcing the deal, Absorb noted that mentorship plays an important role in employee onboarding, engagement, and upskilling, but said that peer-to-peer learning has become more difficult amid the rise of remote and hybrid work during the pandemic. Absorb also claimed that historically, mentoring platforms like Together “have been siloed” from LMS offerings like its own. With this deal, Absorb hopes to bring the two closer together.

“By offering a best-in-class mentoring and coaching platform alongside our leading LMS, we address a critical gap created by remote and hybrid work,” an Absorb spokesperson told BetaKit.

Founded in 2003, Absorb sells LMS software to businesses, governments, healthcare providers, educators, and non-profit organizations that helps organizations train, retain, and manage both employees and external stakeholders virtually.

In 2021, Absorb was acquired by New York-based private equity firm Welsh, Carson, Anderson & Stowe (WCAS) in a deal that valued Absorb at over $500 million USD. WCAS bought the Alberta-based tech business from Boston growth equity firm Silversmith Capital Partners, which led the company’s $59-million financing in 2017.

At that time, Absorb catered to over 23 million users at more than 1,400 organizations across 34 countries and had reached $50 million in annual recurring revenue following record growth amid the shift to working from home during the early days of COVID-19.

RELATED: Together lands $6.2 million CAD to pair mentors and mentees in companies

The Absorb spokesperson declined to share the firm’s current revenue but claimed that Absorb has sustained strong growth since 2021 and is growing at a rate of 20 percent. Today, Absorb has 587 employees and has grown to serve over 34 million users and more than 3,000 customers. Absorb’s clients include businesses like Atlassian, A&W, Gap, Geotab, Johnson & Johnson, Samsung, Sony, Symend, and Toyota.

Together, which was launched in 2018 by Reeves and head of product Nathan Goldstein, is incorporated in Canada and the United States (US) with an office in Toronto, and employees across both countries. The company, which focuses primarily on the US market, has developed a corporate mentorship management platform designed to boost employee advancement, retention, and productivity. Together’s offering manages the mentorship process from registration to reporting, helping clients adhere to best practices. It serves customers like AstraZeneca, Coca-Cola, Heineken, Kellogg’s, Lightspeed Commerce, and 7-Eleven.

Prior to this deal, Together had raised $6.5 million in total funding from a list of backers that includes AltaIR Capital, TRAC, Kitchener-Waterloo’s Garage Capital, Rebel Fund, and Funders Club, among others, a figure that includes $5 million in financing from early 2022.

According to Reeves, today, Together is generating millions in annual recurring revenue, growing quickly, and cash-flow neutral. The CEO said that Together was also considering raising a Series B round before striking this agreement.

RELATED: Absorb Software to be acquired by US private equity firm at $630-million CAD valuation

Reeves claimed that the startup ran a competitive process before deciding to sell to Absorb. “Together’s financial profile (growth [and] efficiency) made Together an attractive target even in this environment,” he said.

Absorb’s acquisition strategy involves identifying high-growth, profitable companies that operate in areas complementary to the company’s core offerings. Together, which helps organizations build scalable mentorships and employee connection programs through its platform, marks Absorb’s fifth acquisition to date.

“Together stood out for its leadership in mentorship and coaching—key components of effective employee development,” the Absorb spokesperson said. They added that Absorb’s primary objective through this deal is to provide “a comprehensive learning solution that addresses all enterprise learning needs” by fully integrating the two platforms over time.

For now, the experience will remain the same for existing Absorb and Together customers, and Together will continue to operate as a standalone solution as the two companies explore ways to expand and connect their platforms.

Feature image courtesy Together.

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Privacy Commissioner of Canada Philippe Dufresne announced this week that LinkedIn has agreed to voluntarily pause using the personal information of its Canadian members to train generative artificial intelligence (AI) models. 

Dufresne indicated that he’s been keeping a close eye on how companies train AI at a summit earlier this year. 

The development follows reporting by 404 Media in September, which found LinkedIn had begun using its users’ data for AI training without updating its terms of service. The social media platform has since updated its terms of service, and users can opt-out of their data being used. However, that won’t affect any training that’s already taken place, according to TechCrunch. 

The Office of the Privacy Commissioner of Canada (OPC) said in a statement that, following the media reports, Dufresne reached out to LinkedIn to request information about the company’s training practices as well as how it obtains consent from its members. 

According to the OPC, LinkedIn subsequently informed the government body that it had temporarily paused the practice while it worked to resolve the OPC’s questions. The OPC added that, while LinkedIn indicated it believed it had implemented its AI model in a privacy protective manner, it agreed to engage in discussions to ensure that its practices are compliant with Canada’s privacy laws.

“I welcome the decision by LinkedIn to pause its practice of using the personal information of Canadian LinkedIn members to train AI models while we work with them to get answers to our questions,” Dufresne said in a statement. “Personal information, even when it is publicly accessible, is subject to privacy laws and must be adequately protected.”  

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

Dufresne indicated that he’s been keeping a close eye on how companies train AI at the Competition Bureau’s AI-focused summit this past September. 

During a roundtable discussion of the Canadian Digital Regulators Forum at the event, Dufresne defended the parliamentary process holding up Bill C-27 and its Artificial Intelligence and Data Act (AIDA) provision, saying he hoped the bill got the priority it deserved. He went on to explain how AI doesn’t exist in a legal vacuum, and that organizations that design AI must justify their processes and uphold their current obligations under existing regulations. 

“If [AIDA doesn’t pass] for whatever reason, we are acting, we have ongoing investigations, we have issued statements on AI,” Dufresne said at the time. “We’re going to continue to use the tools that we currently have.”

The federal government has been taking on big tech companies on many different fronts in recent weeks. In early November, The Government of Canada ordered social media giant TikTok to wind up its operations in Canada, citing unspecified national security risks, but did not outright ban the platform itself. TikTok challenged the order this week, alleging that federal representatives failed to substantially engage with the company during the national security review. 

Canada’s Competition Bureau also sued Google last month for what it calls anti-competitive conduct in the country’s online advertising technology sector. The Bureau is seeking an order that would require Google to cease the anti-competitive practices, sell off two of its adtech tools, and pay a monetary penalty. 

Feature image courtesy Office of the Privacy Commissioner of Canada via LinkedIn. 

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TikTok has filed a challenge to the federal government’s Nov. 6 order to wind up its Canadian operations, saying the decision was “driven by improper purposes” and alleging that federal representatives failed to substantially engage with the company during the national security review (NSR) process. 

In addition to calling the order “unreasonable” and “grossly disproportionate,” TikTok says it was owed a “heightened duty of procedural fairness.” 

In Federal Court filing in Vancouver last week, TikTok asked the court for a stay of the shutdown order during the legal challenge in addition to setting aside the order in general. TikTok also requested relief for its costs in filing the challenge, and any other relief the court may permit. 

The Government of Canada ordered the social media giant to wind up its operations in the country after an NSR under the Investment Canada Act (ICA), but did not outright ban the platform itself. 

The Nov. 6 statement by Innovation Minister François-Philippe Champagne indicated that the shutdown order aimed to address “specific national security risks” related to the operations of TikTok’s Chinese parent company, ByteDance, in Canada through TikTok Technology Canada, but did not elaborate on the nature of these risks.

TikTok claims it annually contributes millions of dollars to the Canadian economy, and that the shutdown order will result in the termination of hundreds of employees in Canada, as well as the potential termination of over 250,000 contracts with Canadian-based advertisers.

In its filing, TikTok outlines a seemingly sparse correspondence history with the Foreign Investment Review and Economic Security Branch (FIRES) of Innovation, Science and Economic Development Canada (ISED). 

RELATED: Citing national security risks, feds order shutdown of TikTok’s Canadian arm but forgo outright ban

TikTok said it learned in August 2020 that it had not provided the required notices under the ICA regarding the establishment of TikTok Canada in 2018. TikTok alleges that from then until Jan. 2023, FIRES indicated it would be best to delay its filings, given TikTok was under review in the United States. 

The filing goes on to describe a lengthy process starting in Feb. 2023, when TikTok provided its relevant notices and responded to FIRES information requests, before being notified in Sept. 2023 that an NSR had been ordered. After consenting to a couple extensions of the NSR, TikTok alleges that FIRES’s “substantive engagement” with it ceased in early 2024, despite multiple attempts to engage and signalling its willingness to extend the NSR further.

“While we respect the legal process, we stand by our decision to prioritize Canadians’ safety and security.”

Audrey Milette
Innovation, Science and Economic Development Canada

Finally, TikTok claims it was delivered a form letter in September 2024 that indicated it could submit additional security undertakings to the Minister within three days. When TikTok asked FIRES if it was a specific request for TikTok, TikTok alleges that FIRES indicated it was a general letter sent to all companies under an NSR and did not lead TikTok to believe it needed to submit anything.

In October, TikTok claims it was informed that its decision to not respond to the letter led to the Minister’s decision to conclude the NSR before being ordered to shut down its operations in Canada. 

In addition to calling Champagne’s order “unreasonable” and “grossly disproportionate,” TikTok said in the filing it was owed a “heightened duty of procedural fairness.” 

“The Minister erred in law and breached TikTok Canada’s rights to procedural fairness by, among other things, failing to substantively engage in the course of the NSR, abruptly concluding the NSR, and depriving TikTok Canada of the chance to fully and fairly benefit from its statutory and procedural rights,” the filing reads. 

ISED Press Secretary Audrey Milette told BetaKit in an email statement that the government cannot comment on the case due to the confidentiality provisions in the ICA. 

“The Government’s decision was informed by a thorough national security review and advice from Canada’s security and intelligence community,” Milette said. “While we respect the legal process, we stand by our decision to prioritize Canadians’ safety and security.”

RELATED: Canada’s Competition Bureau targets Google for anti-competitive practices

The case has yet to be heard in court. 

The federal government has been taking on big tech companies on many different fronts in recent weeks. The order to shut down TikTok was followed by Canada’s Competition Bureau suing Google for what it calls anti-competitive conduct in the country’s online advertising technology sector. The Bureau is seeking an order that would require Google to cease the anti-competitive practices, sell off two of its adtech tools, and a monetary penalty. 

This week, Privacy Commissioner of Canada Philippe Dufresne also announced that social media platform LinkedIn agreed to voluntarily pause using the personal information of Canadian members to train its generative artificial intelligence (AI) models. The Privacy Commissioner’s office said in a statement that Dufresne reached out to LinkedIn following media reports that it had started training AI models using the data of individual members without notifying them. 

“I welcome the decision by LinkedIn to pause its practice of using the personal information of Canadian LinkedIn members to train AI models while we work with them to get answers to our questions,” Dufresne said in a statement. “Personal information, even when it is publicly accessible, is subject to privacy laws and must be adequately protected.”  

Feature image courtesy Solen Feyissa via Flickr.

The post TikTok challenges feds’ shutdown order, calls national security review process “procedurally unfair” first appeared on BetaKit.

A number of Canadians have risen through the ranks at Uber, bringing lessons from Toronto to global leadership positions.

These leaders have taken on roles helping bring Uber to more than 70 countries, driving engineering innovation from Silicon Valley, and tackling marketing challenges across markets. 

“There’s a broader narrative right now that if you have a certain level of ambition in tech, your path is out of Canada. I’m just not a supporter of that viewpoint.”

Andrew Macdonald, Uber

Canadians can be found in leadership roles across Uber’s global operations. Adam Blinick, now overseeing public policy and communications at Uber from San Francisco, previously held senior policy positions within the Canadian government, including a role with Canada’s federal minister of transport. 

David Cinanni, who leads Uber’s performance marketing team in Amsterdam, once held a role at Health Canada, while Diane Rodgers, Uber’s global head of insurance legal in San Francisco, previously worked as senior counsel at Toronto-Dominion Bank. Emily Ashley, Director of US and Canada Partner Management, is also based in Toronto.

The following stories reveal how the skills and experiences developed in the great north helped three Canadian Uber leaders navigate global markets, solve problems at scale, and prove that growth is not always defined by location.

Andrew Macdonald, Senior Vice President of Mobility and Business Operations

In 2012, Andrew Macdonald was winding down his retail tech startup when a chance conversation in his co-working space at MaRS changed the trajectory of his career.

A fellow entrepreneur mentioned that a new rideshare company called Uber was looking to staff up in Canada. By May, Macdonald was on a plane to San Francisco to interview for Uber’s Toronto General Manager position.

“I never would have been hired by Uber for my role, had I not been a failed entrepreneur,” Macdonald said. “Entrepreneurs don’t just endure failure – they learn from and grow stronger from it. Travis Kalanick, our founder and CEO at the time, had also experienced failure before he found success, and Uber embraced those of us with that background and entrepreneurial mindset.”

When Macdonald joined, Uber was “ultra-scrappy”, he said, and only operating in a few cities. 

“There were only 60 people globally,” he said. “In Toronto, it was just the three of us.” 

At the time, Uber was a black car service, and Macdonald’s first role involved signing up drivers, navigating the city’s complex regulatory environment, and building Uber’s brand in Toronto from the ground up. 

He spent evenings handing out promo codes at events like the Toronto International Film Festival, pitching Uber as a solution for getting home from social outings. Driver engagement was just as hands-on, often literally involving “knocking on limo windows” at the airport.

Adoption in Toronto was slower than in other markets at first, he said, due to its widespread adoption of tech from another local company.

“Toronto’s professional class, our early adopters, disproportionately used BlackBerrys,” Macdonald remembered, noting that initial hurdle limited Uber’s growth until it launched a workaround that allowed people to order rides via text message.

Despite growing pains, Canada quickly became one of Uber’s strongest markets. 

“Canada is a top five market for Uber in both delivery and mobility, so it’s big. We’ve built a strong talent hub here, and now we’ve got hundreds of people working in our Toronto office across pretty much every function that exists at Uber,” Macdonald added.

Macdonald’s own ascent mirrored Uber’s Canadian success. Just one year into his role, he was tapped to lead operations in the US Midwest, while still running Canada. That role meant moving from Toronto to Chicago on “24 hours’ notice.”

In the following years, Macdonald took on oversight of Latin America and Asia-Pacific.

In 2016, he moved back to Toronto, where he now serves as Senior Vice President of Mobility and Business Operations at Uber and oversees the mobility business in over 70 countries. This includes ridesharing, taxis, micromobility, rentals, public transit, high-capacity vehicles, and more. He also oversees Uber’s sustainability efforts, autonomous mobility and delivery operations, business development, Uber for Business, and Uber Health.

He credits his experience as a failed entrepreneur in preparing him for Uber’s fast-paced environment, which he describes as focused on “doing, not just talking or analyzing.”

“I’m not a fan of the ‘move fast and break things’ mantra,” he added. “But I do believe speed matters.”

Macdonald also sees his career as proof that Canadian leaders can still achieve global impact while remaining rooted in Canada.

“There’s a broader narrative right now that if you have a certain level of ambition in tech, your path is out of Canada,” he said. “I’m just not a supporter of that viewpoint.”

Neil Barakat, Director of Engineering

As a Winnipeg-born engineer with a PhD from the University of Toronto, Neil Barakat had spent years in academia before transitioning into roles in the tech industry. After working in software development at Amazon, a team member from Uber approached him with an opportunity. 

It was 2018, and Uber was just beginning to build a Toronto tech hub. 

Skeptical but curious, Barakat decided to go through the interview process. He said three things ultimately sold him on Uber: its rapid pace, the ambitious mission, and the company’s approach to solving problems by blending tech with the physical world.

“As an engineer, that interface between software and the real world is super interesting,” he added.

At Uber, Barakat’s first task was building teams for the Toronto tech hub. He wanted to take a unique approach to building the site that involved creating “centres of excellence,” rather than scattering teams and roles.

He anchored the Toronto office around key charters—teams that owned critical areas like Uber’s ad offerings on Uber Eats and rider-driver matching for trips scheduled in advance. He said the idea was to build ownership and pride locally, rather than having teams simply report to San Francisco for direction.

The strategy worked. Toronto’s matching team, which paired riders with nearby drivers, played a pivotal role in the launch of Uber Reserve, a feature that allows riders to schedule rides ahead of time. Barakat said this required rethinking Uber’s entire approach to matching.

“Real-time matching is about finding the closest car,” Barakat explained. “But for a ride scheduled tomorrow, you need to take a totally different approach that takes into account where cars will be in the future.”

Another standout success was Uber Ads, the company’s advertising division that allows businesses to reach consumers with ads integrated into Uber Eats. Barakat said the engineering team for this product development “was born in Toronto, and now it’s one of the most important businesses in Uber.”

After five years of building Toronto into a thriving tech hub, Barakat recently relocated to San Francisco to serve as Director of Engineering. Today, he leads engineering and science teams for Uber’s experimentation and mapping platforms.  

“The transition to San Francisco was a pragmatic decision—how can I serve my teams best, represent them to leadership, and drive more impact?” he said. 

Barakat finds that his Canadian background offers a distinct advantage south of the border. He said the Canadian approach to brokering deals on compromise has proven effective in situations where an American ‘win-or-lose’ mindset falls short.

“I’ve heard people half-jokingly refer to the fact that I’m a Canadian, just because I’m always friendly and polite in these interactions,” he added. “That can go a long way in building people’s trust.”

Ceili Hubbard, Head of Marketing, UK Mobility 

By 2020, Uber had firmly established itself as a vital element of Toronto’s transportation landscape. Regulations were in place, ridership was growing steadily, and the company was a natural part of the daily lives of locals.

Ceili Hubbard thought it might be time to leave town. 

As the Canada Marketing Lead, she had contributed to solidifying the company’s brand nationwide, and was eager for a new challenge. When a role emerged in London, England, she jumped at the opportunity.

“Toronto was quite a stable environment,” Hubbard said. “The UK market has had historical challenges that were quite unique and represented some unique brand marketing challenges and opportunities.”

Born and raised in Oakville, Ont., Hubbard studied at Western University’s Ivey Business School before landing a role in consumer-packaged goods marketing at General Mills. It was a friend from Ivey who recommended her for a marketing role at Uber in 2018.

“Uber had always been in my line of sight,” she said. “I used Uber and Uber Eats every day in some capacity even before I worked at Uber, and I had a lot of respect for the impact that Uber has had globally.”

Her first assignment at Uber was helping the platform launch a service at Toronto Pearson Airport, and she went on to lead Uber’s collaboration with Mothers Against Drink Driving to promote responsible transportation.

“I think that felt impactful not only because we were able to drive more trips for Uber, but we were also doing some good for the world,” she added.

In the UK, she was part of a team rebuilding Uber’s rideshare business post-pandemic, building trust with policymakers, and improving benefits for drivers.

“I think we’ve come a long way in making sure that we’re always doing the right thing and operating as safe a business as you possibly can and putting drivers first,” she said.

Under her leadership in the UK, Uber also launched one of its most celebrated campaigns. ‘Trains, now on Uber,’ promoted a new service that allows users to book train tickets through the app. The campaign won a Cannes Lion award and set a blueprint for other European markets. For Hubbard, this is one of the most rewarding aspects of her job.

“A lot of things are developed in the local markets, which is part of why I love working at Uber,” she added. “We get the best of both worlds by developing locally and leveraging those learnings globally.”

When asked if there was anything unique about her Canadian roots that she brings to her global role, she pointed to a quality that can be surprisingly effective in tough conversations.

“Canadians have a reputation of being quite friendly and kind, but it is actually the case,” she said. To Hubbard, bringing that energy means “we can have challenging conversations coming from a place of positive intent.”​

PRESENTED BY

Learn more about Uber’s tech hub in Toronto and careers here.

Photos courtesy of Uber and LinkedIn. Feature image produced by BetaKit.

The post Meet the Canadians shaping Uber’s global vision first appeared on BetaKit.

Nearly three years after launching, Toronto-based Cookin has been wholly acquired by another larger player in the chef-made meal delivery space in New York’s CookUnity.

Founded in early 2022 by CEO Morley Ivers and president Michael Baruch, Cookin has built a homemade food delivery marketplace in Toronto and software to help food entrepreneurs across North America launch, operate, and grow online food businesses.

“We realized that one plus one equals three or more.”

Morley Ivers,
Cookin

In an interview with BetaKit, Ivers said he got connected with CookUnity co-founder and CEO Mateo Marietti last year when Cookin had begun raising a Series A round. Ivers said he learned that the two food tech entrepreneurs had the same vision for uniting people through food but a different—and complementary—go-to-market strategy.

Cookin’s platform helps individual chefs set up and run their own businesses. “It’s almost like Shopify, but for the food industry,” Ivers said. CookUnity’s model entails enabling chefs to offer meal delivery subscriptions via large-scale commercial kitchens.

“We were tackling the micro-enterprise market, and [CookUnity] was tackling [the] large-scale, national, commercial kitchen side of the market,” Ivers said. “It was just one of these situations where I think we realized that one plus one equals three or more, and by joining forces, we had the potential to drive much more value for chefs.”

The all-stock transaction closed last month. Cookin’s entire 20-person team has stayed on as part of the deal, including Ivers and Baruch, who remain in their current roles, where they will focus on growing Cookin while also spearheading CookUnity’s expansion into Canada.

Ivers declined to disclose the acquisition price but claimed that Cookin’s 52 shareholders unanimously approved the deal, which gives them equity stakes in CookUnity. Ivers confirmed that CookUnity is profitable, approaching $500 million USD in revenue, and will have grown about 80 percent this year.

Prior to this deal, Cookin had raised $14.8 million in total pre-seed and seed funding from a group that included Relay Ventures, Mistral Ventures, Sobeys, and angels like Wealthsimple co-founder and CEO Michael Katchen, Eater and Resy founder Ben Leventhal, and Michelin Star chef and Alo Group owner Patrick Kriss, among others.

“This [transaction] catapulted [Cookin] forward in terms of where we stood as a seed-stage business into a much later stage, growth-stage company that is very, very well-positioned for the future,” Ivers said.

Cookin, which caters to cooks ranging from home chefs to small restaurants, has grown to serve 1,500 food creators across 40 United States (US) states and 10 Canadian provinces.

CookUnity manages logistics, packaging, and delivery for chefs. The company, which was founded in 2015, most recently closed a $47-million Series B round in 2021. 

Ivers confirmed that the merged entity plans to seek several hundred million dollars in strategic funding over the next two years to invest in its tech offerings.

The Cookin CEO claimed that CookUnity has chefs on its platform currently making millions of dollars annually without the conventional overhead associated with running a restaurant. According to Ivers, CookUnity is responsible for buying the ingredients chefs require to make meals and spends approximately $100 million per year on ingredients.

RELATED: Fresh Prep acquires fellow Vancouver food delivery startup Peko

The Cookin CEO said that chefs can expect to see some integration between Cookin and CookUnity going forward, including through the launch of Ingredients Club, a new program that will leverage the buying power of CookUnity to help Cookin chefs access wholesale prices.

CookUnity said that Cookin’s focus on professional home chefs and hyperlocal approach presents new opportunities for the company and its customers. Going forward, chefs using CookUnity can diversify via Cookin’s à la carte and limited-time “drop” models, while successful Cookin’s chefs can graduate to CookUnity’s subscription model. Customers of both stand to benefit from more variety and buying options.

Cookin marks CookUnity’s second acquisition to date following its purchase of San Francisco-based MobyDish earlier this year. Through the Cookin deal, CookUnity plans to expand into Canada—its first market outside of the US—where it plans to open a large-scale commercial kitchen in the Greater Toronto Area that will allow Torontonians to order meals from celebrity chefs.

“The restaurant industry is deeply inequitable [and] both CookUnity and Cookin are two platforms that allow chefs to earn a greater piece of the pie by selling their meals directly to consumers,” a CookUnity spokesperson told BetaKit.

Now, Ivers said, “[chefs] can become entrepreneurs right out of their home kitchens, or they can build scalable operations for food delivery out of our commercial kitchens.”

Feature image courtesy Cookin.

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Preceded by orchestral Wagner and reflections on the atomic bomb, University of Toronto professor Geoffrey Hinton crossed the stage of the Stockholm Concert Hall and, with a firm handshake and a bow, officially accepted a Nobel Prize in Physics from the King of Sweden for his contributions to the field of artificial intelligence (AI). 

“All of [AI’s] short-term risks require urgent and forceful attention from governments and international organizations.”

Geoffrey Hinton

Hinton, dressed in a tuxedo and white bow tie, was co-awarded the prize alongside Princeton University’s John Hopfield “for foundational discoveries and inventions that enable machine learning (ML) with artificial neural networks.” 

The British-Canadian citizen is the fourth person from a Canadian institution to win the prestigious science award in the past decade and will see his name go down in history with the likes of Albert Einstein, Niels Bohr, and Werner Heisenberg.

Astrid Söderbergh Widding, board chair of the Nobel Foundation, opened the ceremony with a speech addressing the Nobel Prize winners in each category. Söderbergh Widding transitioned from describing the Nobel Peace Prize recipient’s work in nuclear weapon disarmament to the Physics Prize. 

“The atomic bomb recalls that basic research put into practice isn’t only for good,” Söderbergh Widding said in front of the laureates, Swedish Royalty, and a packed concert hall. “Still, it is through free fundamental research that science must continue to explore and expand the frontiers of human knowledge.” 

“The unimaginable consequences that genetic technologies and AI may perhaps introduce can only be managed by truthful, rule-based international collaboration,” she later added.  

When Professor Ellen Moons, chair of the Nobel Committee for Physics, introduced Hopfield and Hinton for their award, she echoed a similar caution on the technology. 

“While they can aid humans in delivering fast answers, it is our collective responsibility to ensure that they are used in a safe and ethical way,” Moons said. 

When Hinton was called up to receive his Nobel Prize from the King of Sweden, he received a lengthy ovation from the audience. 

Hinton learned he had won the award in early October, prompting an outpouring of recognition from Canadian figures and institutions including the Vector Institute, the University of Toronto, Cohere co-founder and CEO Aidan Gomez, Prime Minister Justin Trudeau, and fellow ‘AI godfather’ Yoshua Bengio. 

“He has done such an enormous amount for science and has been so inspired by previous winners,” Cohere co-founder Nick Frosst, one of Hinton’s first hires at Google Labs in Toronto, told BetaKit at the time. “It’s great to see his name up there.”

While Hinton has come to be known as one of the godfathers of AI, he has also spent recent years warning against the potentially disastrous effects of the systems he helped create, if left unchecked. Hinton made headlines in 2023 when he resigned from his post as a vice president and engineering fellow at Google to speak more freely about the potential risks of AI, and has also signed multiple open letters warning against the “risk of extinction” posed by AI and its unfettered development.

When BetaKit asked Hinton in October how he reconciles the award with his recent outspokenness on the dangers of AI, he said his advocacy for AI safety was also recognized by the Nobel committee.

“I think we need a serious effort to make sure it’s safe, because if we can keep it safe, it will be wonderful,” he added.

RELATED: ‘AI godfather’ Geoffrey Hinton co-wins 2024 Nobel Prize in Physics

Earlier this week, Hinton held a Nobel Lecture for his fellow laureates on Boltzmann Machines—the algorithms that ultimately led to the deep learning systems behind modern AI, ML, and his eventual award. During the lecture, Hinton explained the thought process behind building on top of fellow Nobel winner Hopfield’s work and cracked at the optimism he and his collaborators felt while working on the system. 

“When [co-author Terry Sejnowski] came up with this learning procedure for Boltzman Machines, we were completely convinced that must be how the brain works, and we decided we were going to get the Nobel Prize in Physiology or Medicine,” Hinton said in the lecture hall. “It never occurred to us that if it wasn’t how the brain works, we could get the Nobel Prize in Physics.”

The award ceremony was followed by an elaborate banquet, where Nobel Prize winners were given the opportunity to deliver their acceptance speeches. Hinton used his time to deliver a brief but urgent warning on the future of humanity and AI, and decried technology companies motivated by short-term profits. The following is the full transcript of Hinton’s banquet speech, courtesy of The Nobel Foundation. 

This year the Nobel committees in Physics and Chemistry have recognized the dramatic progress being made in a new form of Artificial Intelligence that uses artificial neural networks to learn how to solve difficult computational problems. This new form of AI excels at modeling human intuition rather than human reasoning and it will enable us to create highly intelligent and knowledgeable assistants who will increase productivity in almost all industries. If the benefits of the increased productivity can be shared equally it will be a wonderful advance for all humanity.

Unfortunately, the rapid progress in AI comes with many short-term risks. It has already created divisive echo-chambers by offering people content that makes them indignant. It is already being used by authoritarian governments for massive surveillance and by cyber criminals for phishing attacks. In the near future AI may be used to create terrible new viruses and horrendous lethal weapons that decide by themselves who to kill or maim. All of these short-term risks require urgent and forceful attention from governments and international organizations.

There is also a longer term existential threat that will arise when we create digital beings that are more intelligent than ourselves. We have no idea whether we can stay in control. But we now have evidence that if they are created by companies motivated by short-term profits, our safety will not be the top priority. We urgently need research on how to prevent these new beings from wanting to take control. They are no longer science fiction.

Feature image courtesy The Nobel Foundation via YouTube. 

The post Geoffrey Hinton decries tech companies chasing “short-term profits” in Nobel Prize acceptance speech first appeared on BetaKit.

Following the surprise suspension of a Québec investment-matching program, a Montréal-based sustainable packaging startup says it could fold within the next few months if it can’t secure new funding.

Mishel Wong, the founder and CEO of Bopaq, a cleantech startup that provides reusable food container solutions, said that her company’s ongoing fundraising efforts fell apart after Impulsion PME (IPME) was quietly put on pause by Investissement Québec (IQ) and the Ministry of Economy, Innovation and Energy (MEIE).

Bopaq is not the only Québec startup feeling the sting. After IPME was quietly suspended on Nov. 12, some startups looking to raise pre-seed and seed rounds alongside the program were left in the lurch. The sudden loss of de-risking and syndication opportunities seems to have spooked early-stage investors, as multiple founders told BetaKit that the program’s suspension directly impacted their fundraising. 

“I thought my company was dead. I thought my 10 years of work was completely done.”

Julien Michalk,
UFrost

“We have all the interest there, but they’re all looking for ways to de-risk the investment, and the program with IQ was one of those things that would have helped de-risk it,” Wong told BetaKit. 

Multiple founders and those who support them told BetaKit that IPME was widely lauded as an opportunity to de-risk investment for early-stage companies.

“For many VCs, their commitment hinged on IPME’s involvement as a safety net, turning tentative interest into firm commitments and bridging critical funding gaps,” said Phil Rivard, an investor and founder coach at consultancy RVRD + CO. 

RELATED: ‘It’s life or death’: Québec ecosystem frustrated after IQ suspends early-stage program

The loss of IPME comes near the end of a tough fundraising year for Québec startups, with seed funding last quarter dropping by a third year-over-year. IPME joins five other IQ-delivered programs put on hold in 2024, according to IQ, including bursary programs for small businesses and life sciences companies. 

In a joint statement to BetaKit, the ministry and IQ said that the programs were put on temporary hold to ensure the availability of funds to fulfill existing commitments, and in some cases, due to a large number of applications. Applications submitted before Nov. 12 will still be processed, but the government bodies provided no update on when the program will return.  

Rivard said that the program’s sudden suspension indicates a “broader fragility” in Québec’s ecosystem, pointing to recent studies that show a decline in entrepreneurship rates in Canada. In 2023, a BDC report found there were 100,000 fewer entrepreneurs in Canada than in 2000, despite the population growing by 10 million. 

A “de-risking” option 

IPME helped early-stage companies with high growth potential access seed-stage capital by matching investments. Launched in 2021 under former Minister Pierre Fitzgibbon, the program was given an additional $120 million from the province in 2023 as part of the ministry’s five-year innovation strategy. 

The money awarded through IPME, which can take the form of convertible loans or equity, is entirely from the MEIE, a government spokesperson said. IQ administers the program and processes applications but does not invest any of its own capital. 

IPME applications require a confirmed lead investor and a reference to endorse the file, according to people BetaKit spoke to familiar with the process.

Though Bopaq had yet to apply for the program, Wong said her company had been in talks with IQ’s advisory team and had an application ready to go as soon as it secured the rest of its financing round. Impulsion PME is typically the last step of a funding round, and Wong noted Bopaq had a good chance to secure funding because it had a good relationship with a referring entity. 

Vicky Boudreau, founder and CEO of Heylist, recently went through the program, which helped close out her company’s first $1.6-million funding round. Boudreau told BetaKit that the IPME program was “challenging in a good way” because it forced her to develop sharper business and growth plans. 

Boudreau said that when she was fundraising, IPME was mentioned by investors and advisors as an “amazing opportunity” to match the first $750,000 of a financing round. 

Missed the window

According to Julien Michalk, CEO and co-founder of Montréal-based UFrost, government programs such as Impulsion PME are “mandatory for” Québec companies due to the low level of capital in the ecosystem. He said this is even more apparent when it comes to hardware companies. 

UFrost manufactures an industrial-level “freezing microwave,” a flash-freezing appliance that maintains freshness for thawed food. According to Michalk, the company is already generating revenue and has 35 clients nationwide, but he hopes a round of funding will allow UFrost to find mass appeal as a consumer product. 

Michalk started the process of raising a pre-seed round in May, including communication with IQ representatives about an IPME application. On Nov. 14, IQ cancelled a morning meeting with Michalk and his investor, letting them know that the program was temporarily suspended and they could no longer apply. The meeting was originally booked by IQ on Nov. 12, the same day it quietly shuttered the program. 

The CEO followed up with the IQ representative, asking why their application could not be considered despite having spent weeks discussing their file with IQ, but told BetaKit he received no response. 

Michalk went back to his prospective pre-seed investors with the news, who were waiting for the confirmation that UFrost would be funded through IPME. He told BetaKit that all of them “choked” and withdrew, saying they were no longer comfortable investing.

“For many VCs, their commitment hinged on IPME’s involvement as a safety net.”

Phil Rivard,
RVRD + CO

One prospective UFrost investor BetaKit spoke to under condition of anonymity acknowledged that while it wasn’t the only factor, the IPME news “killed the momentum” of the fundraising. 

“I thought my company was dead,” Michalk said in an interview with BetaKit. “I thought my 10 years of work was completely done.” 

The CEO said that although his company has managed to get its funding plans back on track, IQ should have provided a heads-up to give companies on the brink of applying a chance.

RELATED: Québec VC funding continues downward spiral in Q3 2024, but shows early-stage promise

“The issue here isn’t just the suspension itself but how it was handled,” Phil Rivard of RVRD + CO told BetaKit. “Clear communication could have mitigated the systemic shock and ensured more stability for our ecosystem.” In a statement to BetaKit, IQ said it is in constant communication with “concerned actors” and encouraged startups that did not apply before the program paused to review other available pre-seed and seed funding sources.  

IQ did not respond to questions sent by BetaKit regarding the status of UFrost’s application.

Uncertain future

Wong is struggling to envision Bopaq’s future as the holiday season approaches and face time with investors becomes more difficult to schedule. 

“I didn’t know that stress could feel so physical,” she said. 

Bopaq and UFrost’s predicaments reflect a broader trend among Québec tech: low levels of capital circulating at the pre-seed and seed stages and an overreliance on public funds—just like those that flowed from IPME. 

In Bopaq’s case, the reusable container startup was counting on a program it saw as one of the few viable funding options. Before IPME shuttered, Bopaq was navigating a roadmap to profitability alongside debt commitments: though the company’s revenue has doubled year-over-year, it has laid off three-quarters of its staff. The presence of IPME was never meant as a saving grace for startups falling on hard times, but its loss is one more hardship in an ecosystem with little appetite for risk.    

With no word on when IPME is slated to reopen, Bopaq has secured $75,000 in SAFEs to bridge operations through the new year. Wong said that her company is ready to explore all options, including a merger or an acquisition, to continue its mission. 

Feature image courtesy Bopaq. 

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Alberta Enterprise Corporation (AEC) has launched its fourth early-stage, Alberta-focused angel co-investment fund with a $15-million CAD anchor commitment.

The Accelerate Funds aim to spur more private investment in Alberta’s emerging tech sector. 

The launch marks the first close of Accelerate Fund IV, which aims to raise a total of $25 million from institutional investors, family offices, high-net-worth individuals, and other strategic players to back pre-seed and seed-stage Alberta technology startups. 

Accelerate Fund IV will be managed by Vancouver-based venture capital (VC) firm Yaletown Partners, which also oversaw Fund II and Fund III and has offices in Edmonton and Calgary.

AEC vice-president of investments Rebecca Giffen told BetaKit that Accelerate Fund IV’s strategy will be similar to its past funds, but noted that it will have a greater focus on companies on certain verticals.

“As we managed Fund II and Fund III, we discovered, life sciences, digital transformation, and artificial intelligence are areas where Alberta has standout strengths in technology innovation,” Accelerate Fund II, III, and IV investment manager Arden Tse of Yaletown said in a statement.

The Accelerate Fund program targets privately held Alberta companies with proprietary tech, some customer traction and revenue, and over half of their employees located in the province. It co-invests in financing rounds alongside angel investors, family offices, and foundations, typically investing up to $500,000 under the same terms and conditions as other investors. The Accelerate Fund requires a matching or greater commitment from private backers.

Four members of Yaletown will support Accelerate Fund IV: Tse, partner Brad Johns, investment associate Yasmine Al-Hussein, and industry advisor Neil Frizzell.

Established in 2012 by AEC, the Accelerate Fund program is designed to encourage more private investment in Alberta’s emerging tech sector. Its first $10-million fund was launched in 2012 and managed by AVAC Group. Accelerate Fund II was nearly $10.5 million, a figure that included $10 million from AEC and nearly $500,000 from private Alberta investors. Unveiled in 2016, that fund was managed by Yaletown with support from the A100.

RELATED: Alberta Enterprise Corporation launches $10-million Accelerate Fund III

Launched four years ago with an initial $10 million from AEC, Accelerate Fund III ultimately grew to $23 million. This amount included an additional $5 million from AEC, $6 million from the Opportunity Calgary Investment Fund, and $2 million from undisclosed private backers. This fund was also managed by Yaletown with support from The A100.

To date, the Accelerate Funds have backed 46 Alberta-based companies, including DrugBank, Helcim, Ontopical, PayShepherd, Samdesk, StellarAlgo, Userful, Virtual Gurus, WaitWell, and Wyvern. Accelerate Fund exits include Circle Cardiovascular, Decisive Farming, and Passportal.

“The Accelerate Funds are core to our strategy in activating capital, in particular angel capital, to pre-seed and seed companies in the province,” AEC CEO Kristina Williams told BetaKit.

Williams said AEC has been impressed by the Accelerate Fund team and their progress to date. “The impact of the Accelerate Funds can be seen in the graduation to later-stage financing and the tremendous growth of these companies,” she added.

RELATED: Helcim closes $27 million CAD to bring payment stack to underserved SMBs

For every dollar invested by an Accelerate Fund up to this point, AEC claims that 10 times that amount has been invested by angels, family offices, and institutional investors.

Backed by the Government of Alberta, AEC promotes the development of the province’s VC industry by investing in VC funds that finance local tech companies. AEC targets funds with a strong commitment to Alberta and a full-time presence in the province. 

To date, AEC has committed $415 million across 39 VC funds, including Amplitude Ventures, Graphite Ventures, Luge Capital, Panache Ventures, Pender Ventures, and Yaletown.

“Many of North America’s leading venture capital funds now have representatives in Alberta, and we’re welcoming record numbers of founders, software engineers, and other talent from across Canada and internationally to build technology businesses here,” Alberta Minister of Technology and Innovation Nate Glubish said in a statement. “With this latest deployment of capital, we invite early-stage tech companies to stay and grow here, and to expand Alberta’s technology jobs and innovation.”

CORRECTION (12/10/24): This story previously stated, incorrectly, that AEC was an investor in Brightspark Ventures. BetaKit regrets the error.

Feature image courtesy Accelerate Fund.

The post Alberta Enterprise Corporation launches Accelerate Fund IV with $15 million to back early-stage tech startups first appeared on BetaKit.

Vancouver-based Spexi Geospatial has secured a $16.2-million CAD ($11.5 million USD) Series A round as it develops new applications for its image-capturing drone pilot network.

Spexi is developing applications for autonomous systems, smart infrastructure, gaming, and AI.

The all-equity round closed this week and was led by New York City-based return investor Blockchange Ventures, a venture capital firm that focuses on blockchain technologies. Spexi CEO Bill Lakeland told BetaKit in an email statement that other round participants included Moonshots Capital, Protocol Labs, and web3 entrepreneur Tom Trowbridge.

Founded in 2017, Spexi operates a blockchain-based “fly-to-earn” network of drone pilots that take high-resolution aerial imagery meant to help prepare and respond to disasters, enable smart cities, remotely inspect infrastructure, or monitor natural resources. The startup claims the imagery on its platform is cheaper, higher quality, and more frequently updated than satellite or aerial photography. Lakeland told BetaKit that the Spexi provides access to its imagery through a subscription-based model, but prices are “highly variable” based on area of coverage and data recency. 

Lakeland added that Spexi has service agreements with its purchasers to ensure the data isn’t being used in negligent or nefarious ways. 

“This is the norm for image data companies like ours and ensures the data is being used for the right reasons,” Lakeland said, adding that its drones collect images from an altitude that is too high to identify people, addresses, licence plates, or other personal information. 

Spexi looks to incentivize drone pilots to join its platform and collect imagery from standardized 24-acre hexagons, dubbed “Spexigons,” with cash rewards and “reputation points.” The reputation system rewards users who upload the results of their flights, while detracting from those that fail, operate in an unsafe manner, or otherwise harm the health of Spexi’s network. Spexi says points can be used to reserve Spexigona and that “users with a strong reputation are intended to have a much better chance of earning in the future.” 

This leads to Spexi’s long-term goal: a token-incentized physical infrastructure network, built on providing its drone pilots with a native crypto utility token, called SPEXI, that can be used or consumed to reserve Spexigons for preferential capture periods or credits for data processing. Spexi says it intends to distribute SPEXI tokens at some point in the future, but are currently “pending regulatory approval or clarity,” and that it does not guarantee that reputation points will make every user eligible for tokens.

The startup previously raised a $7.8 million CAD ($5.5 million USD) seed round in 2022, led by Blockchange with participation from Protocol Labs, InDro Robotics, and Dapper Labs. 

Spexi said it raised its latest Series A funding as it develops applications for autonomous systems, smart infrastructure, gaming, and AI.

“With our ability to scale rapidly and deliver superior data with near zero emissions, I am proud that we are not only supporting essential government and emergency response services at a fraction of the usual cost, but also driving the future of AI and metaverse powered technologies across industries globally,” Lakeland said in a statement. 

Lakeland explained to BetaKit that Spexi’s dataset is “perfectly suited” for training AI models and for metaverse or gaming applications, which can use its real-world imagery to construct “a realistic and current representation of the world in digital form.” He added that Spexi aims to make analytics development easy for AI companies, and is currently working with Northeastern University on AI modeling for Spexi’s applications that could help identify where extreme wildfire risks are surrounding infrastructure and communities 

When BetaKit asked Lakeland if the claim that Spexi emits “near zero emissions” factors in its use of blockchain and AI, both of which are energy-intensive and produce carbon emissions with negative environmental impacts, Lakeland said its calculation is based on “leveraging a global network of pilots using battery-powered micro-drones”

“We’re always evaluating new technologies like blockchain and AI to ensure we continue delivering sustainable solutions,” he added.

Spexi claims that, since its inception, it has facilitated more than 50,000 drone missions that produced over 3.7 million aerial images across Canada, the United States, Mexico, and the United Kingdom. 

Earlier this year, Spexi was awarded a $1-million contract from the Government of Canada to capture Earth imagery in order to improve emergency preparedness and responses to wildfires.  

UPDATE (12/12/2024): This story has been updated with information and commentary from Spexi CEO Bill Lakeland.

Feature image courtesy Spexi.

The post Spexi raises $16.2-million CAD Series A for blockchain-based drone imagery network first appeared on BetaKit.

Toronto-based FinTech startup Cyder has secured $1.5 million CAD in pre-seed funding to help Canadian credit unions offer their own loyalty programs.

Cyder aims to help credit unions compete with banks and attract younger members through its new Cyder Rewards platform, which enables credit unions to design and deliver custom loyalty programs. The company plans to use this funding to fuel the launch of Cyder Rewards, which it intends to pilot with Canadian credit unions over the next quarter.

“Our goal is not to become the name of the program,” Cyder co-founder and CEO Sukhman Dulay told BetaKit in an exclusive interview. “Our goal is to become the program that allows these programs to exist, and essentially allow these credit unions to compete in a new digital environment.”

“Credit unions did invent loyalty … but the big banks ran away with it, so we created this platform.”

Will Christodoulou,
Cyder

Cyder’s pre-seed round, which closed in late October, saw participation from Toronto-based MaRS Investment Accelerator Fund (MaRS IAF), Calgary’s Aperture Group, Québec-based financial services co-operative Desjardins through its Startup in Residence program, and California’s Berkeley SkyDeck. The startup also scored an investment from Dragons’ Den star Arlene Dickinson after pitching on the CBC television show last year. Raised via simple agreement for future equity, this marks Cyder’s first external funding to date.

“We led this funding round because we believe that the Cyder team has developed a very promising technology for loyalty and data solutions for financial institutions,” MaRS IAF managing director Emil Savov told BetaKit over email. “Their platform uniquely combines data ownership, member rewards, and marketing analytics [and] automation, enabling [financial institutions] to incentivize customers, collect actionable data, and deliver personalized experiences at scale.”

Desjardins’ Startup in Residence program supports and invests in high-potential Canadian tech startups across verticals. “Cyder embodies the qualities we prioritize in our investments: amongst other things, positive market signals, strong traction, and team strength,” Desjardins’ Startup in Residence managing director Eric Morin told BetaKit over email.

Founded in 2021 by Dulay and CTO Will Christodoulou, Cyder initially built a platform designed to help banks better understand their loyalty program members by gathering data using browser extensions.

As Cyder began working with more financial institutions, Christodoulou said the startup noticed “a massive gap” in the market—credit unions lacked the ability to easily and effectively launch loyalty programs. This became apparent after some credit unions asked Cyder to help them develop their own loyalty programs, and so the startup began building Cyder Rewards.

“Most Canadians, when they think about it, they always say … ‘We only have access to [five] banks,’ but that’s just not true—there’s hundreds of credit unions that can support their exact [needs] and give them just as good, if not better, banking services,” Christodoulou said.

Loyalty programs can be a useful means of attracting and retaining customers. “Credit unions did invent loyalty through something called patronage,” he said, referring to the payments credit unions issue to members when the institution does well. “But the big banks ran away with it, so we created this platform.”

RELATED: Two years after Graphite Ventures spinout, MaRS IAF is ready to invest again

Cyder advisor Carrie Forbes noted that credit unions are co-operatives in which every member is an owner. “If the credit union is profitable, dividends can be paid to the members,” Forbes told BetaKit over email. “The concept of loyalty is also part of their DNA, where it’s embedded in their co-operative values. Plus, it makes really good business sense. Loyalty programs can connect local small businesses to the members in their community, helping to support local economies and entrepreneurship in ways larger banks can’t.”

Forbes is the former CEO of Halifax-based League Data, a FinTech co-operative owned by over 35 Canadian credit unions. In her experience, Canadian credit unions want to adopt new technologies, but doing so is “not an easy task” given the complexity of the country’s banking system. Forbes noted that many existing unique credit union loyalty programs also “lack the user experience, automation, and data insights credit unions are looking for.”

Another problem credit unions are facing is an aging membership. “This isn’t a secret,” Dulay said. He believes that loyalty programs and Cyder’s platform can play an important role in helping them draw in younger members.

RELATED: PayTic raises $2.95 million to help banks, credit unions centralize program management

“Which millennial or Gen Z [person] doesn’t want to shop local and give back to their community?” Dulay added. “It’s the ethos of what a credit union is, and [loyalty programs are] how they’re trying to emphasize this and yell this from their rooftops.”

Cyder aims to give credit unions the software they need to offer programs that meet their needs. Cyder Rewards enables credit unions to offer local, white-label rewards programs. Credit unions can identify behaviours they would like to reward, onboard customers and local businesses as loyalty partners, integrate donation options for local charities and causes, and redeem and issue rewards for buying local, opening new accounts, or other actions.

Dulay and Christodoulou claim that nothing else exists in Canada like this for credit unions. Down the road, they also see lots of potential for the startup’s platform south of the border. For now, Cyder plans to pilot the platform with Canadian credit unions, and the company is bringing on four undisclosed credit unions from across the country as anchor partners.

Feature image courtesy Cyder.

The post Cyder closes $1.5 million to fuel launch of loyalty platform for credit unions first appeared on BetaKit.

Sometimes the timing of events coincide in ways that seem less than coincidental.

Two weeks ago, Canada’s Semiconductor Council released a report noting the “economic and national security risks if a resilient, domestic supply chain” of semiconductors is not developed for the EV sector.

About two weeks prior, The Logic broke news that Canadian AI chip manufacturer Tenstorrent had quietly relocated to the US last November. What does Tenstorrent do? Produce a variety of AI software and hardware solutions of interest to customer electronics companies like Samsung and… auto manufacturers like Kia and Hyundai. Whoops.

Tenstorrent told BetaKit this week (story below) that one of the motivations behind the move was a major investor in its $700 million USD Series D round faced an ownership cap unless the company redomiciled to the US. Tenstorrent has said all the right things about remaining committed to Canada “for the foreseeable future,” and will continue to develop its hardware here. I will note that every company should be expected to make the best decisions for its growth and success.

But no matter how many Tenstorrent employees continue to work in Canada, the value of the intellectual property they create here just fled the country, at a time when domestic AI compute capacity and a resilient semiconductor supply chain remain on the national to-do list.

That realization surely colours the reception of the feds’ Canadian Sovereign AI Compute Strategy this week (also below), part of the $2.4 billion commitment made in Budget 2024. That commitment has been criticized for being both too little, too late and another flow-through to foreign AI companies or large multinationals. But it’s something, right?

At the HardTech Summit last month, in conversation with BetaKit CEO Siri Agrell, University of Toronto professor Arvind Gupta used the iPhone as an example of Canada’s lack of focus with respect to innovation and productivity. He noted you can be a leader in producing the minerals used in each iPhone, or in assembling and manufacturing the iPhone, or you can invent the damn thing; it’s hard to do one, let alone all three, well. Guess which one provides the greatest financial return?

Canada lost its iPhone competitor about a decade ago, and thousands of words have been written on the perilous history of building semiconductor fabrication plants at the wrong time. Let’s ignore minerals for the moment. What else is there?

This week, Cohere announced it will build a multi-billion dollar AI data centre in Canada, with backing from the Canadian government (also also below). Cohere co-founder Ivan Zhang’s message to Canadians? “Don’t [brain] drain.” 

The facility will be built by an American company and use Nvidia GPUs. Again, none of this is coincidental.

Douglas Soltys
Editor-in-chief

Meet Yasmin. She’s helping move Toronto forward with Uber. 

Uber has come a long way since its first trip in Toronto in 2012—but it has the same mission to drive positive change. Today, it continues to help people like Yasmin earn flexibly while she is in law school and support her family at the same time.  

Uber is becoming a zero-emission mobility platform, advocating for positive change for drivers, and working with UFCW Canada, the country’s largest private-sector union. Whether it’s getting home from work, getting to the airport, or discovering a new restaurant, Torontonians know they are able to rely on Uber. 

Learn more about how Uber is moving Toronto forward.

TOP STORIES OF THE WEEK

Federal government outlines $2 billion in AI compute spending commitment

The federal government has launched the Canadian Sovereign AI Compute Strategy, outlining how it intends to deploy the $2 billion CAD it promised for artificial intelligence computing power as part of Budget 2024.

According to ISED, $1 billion will fund “public” supercomputing infrastructure. This includes the establishment of a large supercomputing facility for researchers and companies and a smaller computing facility led by Shared Services Canada, the agency that provides information tech to federal departments, as well as the NRC. That facility will be designed for government and industry research and development, including for national security purposes.

On Friday, Toronto-based Cohere unveiled plans to build a multibillion-dollar AI data centre in Canada, the first investment through the Canadian Sovereign AI Compute Strategy.

AI chipmaker Tenstorrent closes nearly $700-million USD Series D at $2.6-billion valuation

Canadian-founded, United States-based AI hardware company Tenstorrent has secured more than $693 million USD in Series D funding from a slew of big-name investors, including Amazon founder Jeff Bezos’s investment firm and electronics giant Samsung.

The Series D announcement comes shortly after Tenstorrent quietly relocated from Canada to the US, moving its headquarters from Toronto to Santa Clara, Calif. 

Canada Post strike didn’t slow Shopify’s record-breaking BFCM weekend

Shopify has broken its sales record for the Black Friday-Cyber Monday weekend yet again, despite warning that an unresolved Canada Post strike would “devastate” the Canadian economy last week. 

According to Shopify’s retrospective report of the weekend, the e-commerce giant’s merchants generated a cumulative $11.5 billion USD in sales over the BFCM weekend. The figure marks a 24 percent increase on the $9.3 billion in sales recorded for the same occasion last year, which set a record in itself. Shopify has beat its BFCM sales record every year since it started sharing the data.

Meanwhile, Calgary’s Benevity saw over $140 million donated to more than 56,000 nonprofits across 122 countries and territories through its platform on Giving Tuesday, down nearly seven percent relative to its record-breaking 2023. 

Musical AI partners with India’s Beatoven.ai to create “fully licensed” AI song generator

As artificial intelligence companies, creatives, and copyright holders clash, Canada’s Musical AI has teamed up with another early-stage music technology startup to build what it says will be a “completely legal and licensed” AI song generator.

The company has partnered with India-based Beatoven.ai to develop the new service, which will combine Musical AI’s rights management platform with Beatoven.ai’s AI song generation software. They say the AI song generation model, which they plan to launch in the second half of 2025, will be trained on over three million songs, loops, samples, and sounds—all with permission from, and compensation for, rights holders.

Trexo Robotics has helped children with disabilities take 100 million steps

Mississauga-based Trexo Robotics says its robotic legs device has helped children with disabilities walk over 100 million steps. 

Trexo provides a pair of robotic legs, built around an external walker frame, intended to help children with cerebral palsy and other leg mobility-affecting conditions move independently.

Trexo CEO Manmeet Maggu told BetaKit that his company is working on methods to make its tech more accessible in order to get to its next goal of 1 billion steps.

FEATURED STORIES FROM OUR PARTNERS

• A Digital Marketing Sector Council report identifies the one role tech companies are scrambling to fill.
• Mastercard and Koho describe the partnership that helped migrate the fintech startup’s customers to the future of banking.
• CIBC Innovation Banking’s Amy Olah explains the importance of venture debt in a variety of market conditions.
• Eva Lau of Two Small Fish Ventures talks visionary acquisition strategies for our Investor Deck series, presented by Sage. 
• Xatoms, Philer and Mango Visa win the IDEA Mississauga pitch contest.

BetaKit’s Weekly Roundup

• BC – CICE and Innovate BC dole out $9.2M to 18 projects
• RCH – BCSC penalizes ezBtc owner $18.4M after finding fraud
• TOR – Questrade lays off undisclosed number of employees
• MTL – KisoJi Biotechnology secures $57M CAD Series B round
• MTL – SRTX raises $35M CAD convertible debt from IQ
• MTL – Lightspeed lays off another 200 employees
• QCY – Aramis secures $80M CAD for vaccine development do-over

The BetaKit Podcast

Lessons in leadership, hiring, and AI from SAAS NORTH 2024k

“SaaS was around, ‘How do you automate business processes in order to empower humans?’ AI is about, ‘How can a machine do the process so that you need less [human] involvement?’”

David Appel (Sage Intacct), Bryan Watson (Venbridge), April Hicke (Toast), and Stephanie Lipp (MycoFutures) talk AI, the changing role of the CFO, leadership and hiring, cleantech tax credits, and how to make leather from mushrooms (seriously). Recorded live at SAAS NORTH.

The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: Jeff Bezos bets on Tenstorrent, Questrade and Wealthsimple trade markets, Shopify’s big BFCM.

Feature image courtesy Tenstorrent.

The post Foreign and domestic AI with Tenstorrent and Cohere first appeared on BetaKit.

It’s that time of year, folks: once again, we’re getting SaaS-y.

In what has become an annual tradition, this week The BetaKit Podcast is featuring a compilation of one-on-one interviews I recorded in our custom-built podcast booth while at SAAS NORTH.

“SaaS was around, ‘How do you automate business processes in order to empower humans?’ AI is about, ‘How can a machine do the process so that you need less [human] involvement?’”

Other than jumping over to the BetaKit Keynote Stage (speaking with Marie Chevrier Schwartz and Chris Arsenault) I didn’t leave my pod prison much during SAAS NORTH, but it was to deliver you, dear listener, the interview goods.

This year, I think I’m most happy with the breadth of this collection of interview topics. On this episode, you’ll find conversations about AI, the changing role of the CFO, leadership and hiring, cleantech tax credits, and how to make leather from mushrooms (I kid you not).

First up, we have David Appel, the global head of the subscription and SaaS vertical for Sage Intacct. Sharing insights from his RSVP-only session at SAAS NORTH, David has guidance for SaaS finance leaders on their evolving role and how AI is changing SAAS products and sales strategies. We also talk about trust and cathedrals a lot, and trust me, it will all make sense.

Next up is friend of the pod and avid listener, Bryan Watson. Brian is SVP of Venbridge by day and managing director of CleanTech North by night. In this interview, Bryan sheds light on how the implementation of long-promised tax credits is going, why SDTC funding delays are so scary for startups, and if the recent US election and potential end of the Inflation Reduction Act will slow the Canadian cleantech brain drain.

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

Next in our interview bonanza is Toast co-founder April Hicke. Toast is a multi-functional talent platform focused on increasing gender diversity in tech, and April happened to be speaking at SAAS NORTH about leadership and hiring. So listen up and take notes—hopefully, this is the start of a really important, ongoing conversation tech needs to have with itself.

When we produce these compilation recordings, we’re often looking to squeeze in as many industry leaders from an event as possible to give you as much insight as possible. But what about the new entrants? What is their SAAS NORTH experience like?

We’re closing this episode off with Stephanie Lipp, CEO of MycoFutures, who is doing some insane stuff with mycelium, or what I like to call ‘mushroom legs’. Her company is very very cool, and Stephanie explains all of the interesting industries her work touches upon, but I want you to also pay attention to why this cleantech, hardtech, mushroom tech founder would show up to a SaaS conference, what she learned, and who helped her get there. It’s a good reminder of why events like SAAS NORTH exist in the first place.

PRESENTED BY

The BetaKit Podcast is presented by Uber Canada: driving positive change for riders, drivers, and communities across Toronto.

Uber is becoming a zero-emission mobility platform, advocating for positive change for drivers, and working with UFCW Canada, the country’s largest private-sector union. Whether it is getting home from work, getting to the airport, or discovering a new restaurant, Torontonians know they are able to rely on Uber. 

Learn more about how Uber is moving Toronto forward.

The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald. Feature image courtesy SAAS NORTH.

The post Lessons in leadership, hiring, and AI from SAAS NORTH 2024 first appeared on BetaKit.

Calgary’s Benevity saw over $140 million CAD donated to more than 56,000 nonprofits across 122 countries and territories through its platform on Giving Tuesday this Dec. 3.

The corporate social impact software firm reported 148,000 individuals and 637 companies participated this year, with St. Jude Children’s Research Hospital, American Red Cross, Doctors Without Borders, and United Way Greater Toronto among the most popular causes.

Benevity says it has processed over $15 billion in donations and 79 million hours of volunteer time to date.

This 2024 total is down nearly seven percent relative to Benevity’s record-breaking Giving Tuesday 2023, when the company reported that $150 million was donated to over 53,000 nonprofits via its platform. Last year marked Benevity’s third record Giving Tuesday in a row following some strong 2022 and 2021 results.

At the same time, Benevity saw 21,000 individuals commit 260,000 in volunteer hours through its platform this Giving Tuesday—a 17 percent increase compared to 2023.

In a statement, Benevity’s new CEO Christopher Maloof credited users for donating so much of their time and money amid economic uncertainty and an increasingly challenging social climate for companies.

Founded in 2008, Benevity is a certified B Corp that offers a suite of community investment, employee, customer, and nonprofit engagement software solutions to a list of customers that includes Visa, Starbucks, and UPS. To date, Benevity claims to have processed more than $15 billion in total donations and 79 million hours of volunteering time for 470,000 nonprofits around the world. 

This year, Benevity has taken steps to build out and reshape its executive team. Maloof, an experienced software executive who previously led MeridianLink and worked with Thoma Bravo, took the reins of Benevity three months ago from former CEO Kelly Schmitt. 

Benevity said Schmitt chose to step down after six years with the company, during which she helped guide Benevity to profitability and a $1-billion valuation when United Kingdom-based Hg purchased control. Early last year, Benevity shed 14 percent of its staff, citing lower than expected customer demand amid deteriorating macroeconomic conditions.

RELATED: Benevity appoints MeridianLink president Christopher Maloof as CEO, Kelly Schmitt steps down

In addition to bringing on Maloof, the company has made at least four other leadership changes in 2024. Last month, Benevity appointed Candace Worley as chief product officer, Cristine Kao as chief marketing officer, and James Carder as chief information and security officer. Ricardo Moreno also joined the company as chief revenue officer earlier this year.

Canada Helps’ 2024 Giving Report recently found that for the eleventh consecutive year, the number of Canadians making charitable donations has declined. At the same time, charity usage in Canada has reached an all-time high thanks to inflation and the high cost of living, leaving over half of charities unable to meet current demand, according to the report.

Despite this continued decline and the slight drop Benevity saw in donations through its platform, Giving Tuesday 2024 overall may have set a new record: GivingTuesday Data Commons estimates that a record-breaking $3.6 billion USD was donated in the United States alone on Dec. 3.

Feature image courtesy Benevity.

The post Benevity reports over $140 million donated through its platform this Giving Tuesday first appeared on BetaKit.

Québec City-based Aramis Biotechnologies, founded by former employees of failed vaccine venture Medicago, is advancing an $80-million project to develop plant-based vaccines for new flu shots and pandemic preparedness. 

Half of the funding is a repayable contribution of $40 million awarded by Innovation, Science and Economic Development Canada (ISED) through the Strategic Innovation Fund (SIF), as first reported by The Logic in August. Another portion consists of an all-equity $30-million Series A round announced this week. The remaining $10 million is made up of undisclosed loans and funding from the Québec City municipal government. 

The $30 million in Series A financing was led by a group of undisclosed Québec investors, plus $10 million from Aramis employees. 

The $30 million in Series A financing was led by a group of undisclosed Québec investors, plus $10 million from Aramis employees. 

Aramis was founded in 2023 by former Medicago employees after the latter biotech firm was shut down by its parent company, Mitsubishi Chemical Group. Medicago was awarded over $300 million from the federal government in 2020 to build a vaccine manufacturing plant in Québec and deliver COVID-19 shots, but the plan never materialized. 

In December 2023, former employees founded Aramis Biotechnologies and acquired Medicago’s intellectual property, technology platform, and new manufacturing facility.

“Aramis is seeking to build on Medicago’s cutting-edge technology platform to advance and optimize plant-based vaccines and therapeutics against influenza and other respiratory illnesses,” ISED wrote in an email to BetaKit. 

RELATED: Coveo snags SIF investment as AI project funding flows during ALL IN 2024 

Aramis plans to develop a next-generation flu vaccine to address the efficiency gap with currently available vaccines. The vaccines are not mRNA-based, but rather recombinant vector vaccines, and are entirely plant-based. The major protein found in the flu virus is produced recombinantly in nicotiana plants and assembled into virus-like particles in plant leaves, which Aramis then extracts.

According to Aramis, current flu vaccines are 30 to 60 percent effective at preventing the flu, and that metric is lower among adults over 75 years old. 

ISED told BetaKit that no vaccine doses were purchased as part of this agreement. But in the event of a new pandemic, Aramis would get the chance to achieve what Medicago, its former iteration, never did: developing and manufacturing vaccines for Canadians within the country. 

Nathalie Charland, senior director of partnerships and communications at Aramis, also worked at Medicago for over 18 years, according to her LinkedIn. Aramis says its technology can coax plants into producing the molecules needed to make vaccines against virtually any type of pathogen, as long as the appropriate genetic sequence is available. Charland claimed that if necessary, the company could produce a new vaccine in as few as 20 days. 

Medicago’s plant-based COVID-19 vaccine—the world’s first—was approved by Health Canada in 2022. The World Health Organization had rejected Medicago’s vaccine for emergency use due to tobacco company Philip Morris International’s status as a shareholder of Medicago, leading to its vaccine approval with Health Canada also being revoked. 

RELATED: Belgian VC Theodorus relocates to Canada under new name to target early-stage life sciences startups 

The parent company, Mitsubishi Chemical Group, shut down Medicago in February 2023 before it could distribute any vaccines, citing changing demands for the COVID-19 vaccine. 

The federal government was able to recover $40 million of its initial investment. ISED clarified to BetaKit that the new $40-million SIF contribution is distinct from these funds. 

Charland told BetaKit that the problems which led to Medicago shutting down, related to Philip Morris holding a stake and the speed of technological change during the earlier days of the pandemic, are no longer a concern. 

According to ISED, oversight through the SIF contribution is on the vaccine development project itself, rather than the company. 

Feature image courtesy Aramis Biotechnologies.

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Feature image courtesy Jim Keller via LinkedIn.

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Toronto-based generative artificial intelligence (AI) startup Cohere plans to build a multibillion-dollar AI data centre in Canada with the support of the federal government.

Cohere is partnering with CoreWeave to build this facility, which is expected to come online in 2025.

The feds have committed up to $240 million CAD towards the effort. This marks the government’s first investment through its recently unveiled $2-billion Canadian Sovereign AI Compute Strategy, which is aimed at ensuring the country’s AI sector has access to the infrastructure it needs. The strategy includes $700 million to finance the construction and expansion of commercial AI data centres in Canada.

The Government of Canada said that Cohere’s new facility, which is expected to come online in 2025, will provide computing power to Cohere and other Canadian technology companies.

BetaKit has confirmed with Cohere that the company is partnering with American cloud computing firm CoreWeave to build this facility. Its exact location has yet to be determined, and no further financial details have been released at this time.

This investment is designed to help Cohere draw in additional private capital to support this project, in which Cohere is also expected to make a significant investment.

“The government is absolutely committed to providing the support that you need to attract private capital, to cut through any red tape that you are encountering in getting these data centres built,” Deputy Prime Minister Chrystia Freeland said during the press conference announcing the investment.

At the event, Cohere co-founder and CEO Aidan Gomez said that this new facility will use the latest graphics processing units from American chip giant Nvidia, one of Cohere’s investors.

“We’re proud the Canadian government is further investing in the AI industry to build a supercomputer in Canada,” a Cohere spokesperson told BetaKit over email. “This support will enable Cohere to continue to train and develop state-of-the-art AI technology that serves the needs of global enterprises.”

RELATED: Feds outline $2 billion in AI compute spending commitment

Founded in 2019 by former Google researchers, Cohere builds large-language models that power chatbots and other generative AI applications. Unlike some of its rivals, which include OpenAI, Anthropic, Mistral, and Google, Cohere caters exclusively to businesses. 

Earlier this year, Cohere closed $500-million USD in Series D financing at a $5.5-billion valuation, making it one of Canada’s most valuable tech startups. Cohere’s backers include PSP Investments, Cisco, AMD, Export Development Canada, Fujitsu, Nvidia, Salesforce Ventures, and Oracle, among others.

In a letter to employees and investors this week, Gomez said the firm plans to focus on building more tailored models for businesses as companies struggle to figure out how to adopt generative AI.

“Cutting-edge infrastructure will allow us to train our next models here in Canada,” Gomez said during the press conference. “It’s crucial that we help Canada retain our world-class talent and our intellectual property by creating an environment where AI companies not only grow but thrive.” 

UPDATE (12/09/24): This story has been updated to include additional information and commentary from the press conference announcing the federal government’s investment.

Feature image courtesy Minister François-Philippe Champagne via X.

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The Sauga Startup Pitch and Showcase, Mississauga’s flagship startup pitch competition, took centre stage on November 12, spotlighting nine finalists from four regional incubators and accelerators. With $15,000 in cash plus in-kind prizes up for grabs, the event showcased the thriving entrepreneurial spirit in Mississauga and its surrounding communities.

Presented by IDEA Mississauga, ICUBE, SpinUp at the University of Toronto Mississauga (UTM), and EDGE at Sheridan College, alongside FedDev Ontario, the competition demonstrated how a unified support network fuels local innovation. Eligible startups were affiliated with one of the participating programs and featured students or alumni of UofT and Sheridan College, as well as residents of Mississauga.

In front of an audience of investors, industry leaders, and aspiring entrepreneurs, competitors pitched in three categories: Innovation in STEM, Later Stage, and Early Stage. They were judged on overall business potential, including problem, solution, size of opportunity, and traction. A fourth award was given out to a People’s Choice winner.

Winner: Innovation in STEM

Water purification startup Xatoms, which leverages quantum chemistry and AI to tackle global water scarcity, claimed the $5,000 prize for Innovation in STEM. No stranger to winning big, Founder and CEO Diana Virgovicova reflected on the fierce competition and the validation that winning brought.

“This specific competition I think was very competitive. It really meant to me that we are building something that people appreciate,” she said.

Xatoms, currently incubated at UTM’s SpinUp, uses subsidized wet lab space to develop its groundbreaking technology. 

“So far, it’s been amazing because they give us access to cheaper lab space than we could get anywhere else. And the equipment is also amazing for our experiments,” Virgovicova said.

With their first fundraising round underway, Xatoms aims to execute paid pilots in Kenya, South Africa, and the U.S., with the $5,000 prize money supporting equipment for a project delivering clean water to 10,000 people. 

Winner: Later stage

Philer, an AI-powered startup simplifying real estate closings through advanced online legal services, won the $5,000 Later Stage prize. CEO Ankita Sharma, who pitched in the same competition last year but did not win, said winning this year was very reassuring. 

“The judges and everyone were very excited to see our growth and the momentum we have created. It was very reassuring that we’re heading in the right direction,” she said.

Sharma plans to use the $5,000 winnings to host a community event for women in real estate, saying, “No one is bringing together women professionals, which is 60 percent of the industry. It comes from a personal place where we want to empower women professionals in the industry. And Mississauga is very diverse, very multicultural. We wanted to bring our diverse community together.”

Winner: Early Stage

Kushi Kaur, Founder and CEO of MangoVisa, shared similar sentiments about Mississauga’s diverse community, crediting her latest success as the pitch competition’s Early Stage category winner to the city’s supportive startup ecosystem. 

Initially focused on helping international students find credible lawyers in Canada, MangoVisa is now expanding to serve young Canadians who want to work abroad. 

“We are digitizing immigration for global citizens,” said Kaur. “When I was talking to lawyers, I realized they were looking for good clientele but not able to find them. Both of the marketplaces were in need of each other.”

MangoVisa’s victory was a testament to Mississauga’s growing support network, with Kaur praising IDEA Mississauga, a 4,300-square-foot facility created for local startups, scale-ups, corporate leaders, and investors to collaborate and grow together.  

“IDEA was the first incubator where I didn’t have to drive 50 minutes into Toronto. And whoa, what a beautiful space it was,” said Kaur. “It’s a committee of people from the Mississauga library and the Mississauga government and people from the tech sector as well. The team was just so impressive to me. They were able to actually get meetings for me to be able to move forward to the next step.”

Winner: People’s Choice

A partnership between Nobellum and ICUBE, the home of social entrepreneurship and early-stage start-ups at UTM, is what helped Founder Abdel Ali win the People’s Choice award for his startup Kiwi Charge.

A robotics startup transforming EV charging, Kiwi Charge helps builders avoid the costly infrastructure required to set up charging stations by making robot chargers that autonomously navigate parking lots to charge vehicles.

“Nobellum and the support we received from UofT has been instrumental in getting us to where we are today,” said Ali. “The connections we made from the competition are crucial. We know it’s going to open up a lot of doors and give us exposure.”

Kiwi Charge is already operational in three buildings, with over 100 on the waitlist. After launching just a little over a year ago, they’re preparing for a pilot with a major developer and are planning to raise a seed round in the new year.

“A lot of times we’re at the leading edge of innovation and we’re doing things that no one else is doing,” said Ali of his fellow startup founders. “Winning is an opportunity to get validation to help you continue on your journey.”

All images provided by City of Mississauga Economic Development Office.

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Learn more about the City of Mississauga’s IDEA Step-Up Program, which helps innovative and inclusive companies grow and overcome barriers. Applications are being accepted now.

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Montréal-based biotech company KisoJi Biotechnology has raised $57 million CAD ($41 million USD) to bring its cancer treatment into clinical trials and leverage artificial intelligence (AI) for its antibody discovery technology. 

KisoJi uses an AI model trained on its database of single antibodies, which the company says is the world’s largest, to identify new ones.

The Series B round, which closed in October, consists predominantly of new equity with some convertible debt (KisoJi declined to say how much). Investissement Québec (IQ) co-led the round with Montréal-based Lumira Ventures, with participation from Fonds de solidarité FTQ, adMare BioInnovations, and US-Japan firm Remiges Ventures.

KisoJi Biotechnology said it will use the capital to bring its one-of-a-kind antibody into the clinic to target cancerous tumour cells, while also identifying new potential therapies for cardiometabolic diseases through its antibody discovery platform.

“This financing will enable KisoJi to continue its development of pipeline assets in oncology, cardiometabolic and immunology indications using our cutting-edge platform and AI tools,” David Young, co-founder and CEO of Kisoji, said in a statement. 

KisoJi’s main offering, which will soon debut in a clinical trial, is KJ-103, a “naked” monoclonal antibody that binds to a protein found on the surface of tumour cells. The antibody works by attracting immune cells to eliminate cancerous cells. In preclinical tests, KJ-103 has shown promise against human tumours from breast, colorectal, and other cancers.

RELATED: FDA clears drug for rare and deadly GI cancer developed by Canadian firm Zymeworks 

The Montréal-based company reached an agreement with Cancer Research UK in October to introduce KJ-103 into its first human clinical trial with roughly 100 patients. 

KisoJi told BetaKit that the safety and efficacy data it will garner from the upcoming clinical trial is part of the drug approval process in Canada and in other markets. KisoJi has not yet entered the drug approval process but is currently running Phase I and II clinical trials.

The new financing will also go towards the development of KisoJi’s antibody identification platform, which includes a mapping program called KisoSeek. The technology allows researchers to test potential immune responses against different targets in the body, which the company says is more efficient than random screening methods.

The platform uses an AI model trained on KisoJi’s database of single antibodies, which the company says is the world’s largest, to identify new antibodies that would be otherwise difficult to uncover. With the newly identified antibodies, the company hopes to develop new drugs that target cardiometabolic diseases and inflammation. KisoJi would not confirm which diseases it is targeting, but examples of cardiometabolic disease include heart disease and stroke.

RELATED: Epitopea raises $43 million CAD for RNA-based cancer immunotherapies 

President and CEO of IQ, Bicha Ngo, said in a statement that the investment represents the agency’s commitment to supporting the life sciences industry, which is still in its fledgling stage, according to a report from Réseau Capital.

Young, a surgeon by trade and University of Toronto alumnus, founded ARIUS Research in 1999 to develop antibody therapies when he was still a practicing medical resident. ARIUS was eventually bought by pharmaceutical multinational Roche in 2008 for $191 million, after which Young started KisoJi to continue research on antibody therapies.

Feature image courtesy National Cancer Institute via Unsplash.

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The federal government has launched the Canadian Sovereign AI Compute Strategy, outlining how it intends to deploy the $2 billion CAD it promised for artificial intelligence (AI) computing power as part of Budget 2024.

This funding has been allocated towards increasing the computing power available to Canada’s AI researchers, startups, and scaleups. The Liberals claim this strategy “will meet the short-term, medium-term, and long-term compute needs” of domestic players as they conduct AI research and develop made-in-Canada AI products.

$300 million will go to affordable AI compute for SMBs.

AI compute, which is typically provided by chips and data centres, refers to the energy-intensive computational resources required for AI systems to perform tasks like processing data, running algorithms, and training machine learning models.

According to Innovation, Science, and Economic Development Canada (ISED), $1 billion will fund “public” supercomputing infrastructure. This includes the establishment of a large supercomputing facility for researchers and companies and a smaller computing facility led by Shared Services Canada, the agency that provides information tech to federal departments, as well as the National Research Council of Canada (NRC). That facility will be designed for government and industry research and development, including for national security purposes.

The feds will begin seeking partners to build, manage, and run this large sovereign supercomputing facility in Spring 2025, with preference for proposals that leverage private capital to increase its scale and co-locate commercial computing infrastructure. 

As building both of these facilities will take time, $200 million of this $1 billion will be used to augment existing public computing infrastructure managed by NRC, Canada’s three AI research institutes, and the Digital Research Alliance of Canada so as to address the country’s immediate needs.

RELATED: CIFAR leader expects CAISI to help inform AI policy in Canada and abroad

To support these efforts, another $700 million has been dedicated to financing the build out or expansion of commercial AI data centres in Canada, with the expectation that they will provide substantial capacity and flexible and affordable computing offerings to Canadian companies.

These funds will be distributed by the Strategic Innovation Fund via the AI Compute Challenge to companies, consortiums, and academic-industry partnerships. Priority will be given to Canadian projects that can demonstrate sustainability (including the use of environmentally sustainable energy sources and Canadian-made AI compute hardware or software) and a high rate of return on public investment.

The remaining $300 million will go towards providing affordable access to computing power to small and medium-sized businesses (SMBs) through the AI Compute Access Fund. This fund will support the purchase of AI compute resources by Canadian businesses to meet their near-term needs as the feds seek to build more long-term domestic compute capacity. More details on the AI Compute Access Fund will be shared when it is launched in Spring 2025.

In a statement, Canada’s Minister of Innovation, Science, and Industry François-Philippe Champagne described this strategy as “a major step toward securing Canada’s place as a global AI leader.”

RELATED: Federal government commits $2.4 billion to AI compute, startups, and safety through Budget 2024

“We’re proud to be a driving force in the worldwide ecosystem, and by increasing access to domestic and secure compute capacity, we will help businesses, innovators and researchers boost the Canadian economy and stand out on the world stage,” Champagne said.

These plans follow public consultations held during the summer that saw input from more than 1,000 stakeholders. According to a Government of Canada report summarizing its findings, respondents argued that there is an urgent need to invest in AI computing infrastructure to lay the groundwork for the country’s AI ecosystem and secure its supply chain. 

The feds said industry stakeholders cited high cost as the biggest barrier to accessing AI compute, while researchers singled out Canada’s lack of publicly available high-performance computing resources as a problem.

Stakeholders: buying local, going green will be key

Stakeholders BetaKit spoke with reacted favourably to the federal government’s AI infrastructure plans. “Expanding compute capacity is crucial to unlocking the vast opportunities ahead as AI continues to drive the digital transformation of the economy,” Ben Davies, chief information officer at Toronto’s Vector Institute for AI, told BetaKit over email.

Yuri Navarro, advisor at Markham, Ont. deep tech incubator VentureLab, called it “a crucial step toward strengthening Canada’s global competitiveness in [AI].” Navarro told BetaKit via email that “Initiatives like the $300-million fund to make computing power affordable for small and medium-sized businesses and the $700 million for commercial AI data centres will drive innovation and collaboration across industry, academia, and the non-profit sector.”

Bob Beachler, vice-president (VP) of product at Toronto semiconductor company Untether AI, expressed excitement that investments will favour projects and companies developing innovative and environmentally sustainable Canadian components. “The reality is the widespread deployment of AI will be a drain on energy resources,” Beachler told BetaKit over email. 

RELATED: Untether AI’s new CEO is here for global scale

The International Energy Agency (IEA) recently estimated that data centres, together with crypto and AI, consumed nearly two percent of global electricity demand in 2022. The IEA projects that this group’s energy consumption could double by 2026.

“Favouring operators that use new and energy-efficient hardware in their facilities is a non-negotiable for our energy resources,” Beachler added. Untether AI hopes to help mitigate the environmental impact of data centres with its energy-efficient AI chips, and Beachler argued that this must remain a focus as the country builds out these AI data centres.

Dana O’Born, VP of strategy and advocacy at tech scaleup advocacy organization The Council of Canadian Innovators (CCI), described this funding as “a positive step toward bolstering Canada’s AI capabilities,” but noted that, “The success of this strategy will depend on meaningful engagement with Canadian innovators and experts.”

“It is essential to ensure that the allocated funds are deployed effectively and efficiently to maximize their impact on Canadian companies and not simply flow to foreign AI companies or large multinational infrastructure providers,” O’Born told BetaKit via email.

AI a federal priority despite stalled regulation

The feds have made AI a priority. This $2 billion in federal spending on AI computing comes in addition to $405 million committed by the Liberal government in April to help AI startups bring new tech to market, boost SMB AI adoption, and fund a recently launched Canadian AI Safety Institute (CAISI), among other priorities.

The Canadian Sovereign AI Compute Strategy is the latest in a series of AI initiatives rolled out by Canada’s Liberal government, joining the Pan-Canadian AI Strategy, the Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems, and the proposed Artificial Intelligence and Data Act (AIDA).

AIDA, or Bill C-27—which passed its second reading in the House of Commons in April 2023—has been at consideration in committee since September 2023. Canadian AI leader Yoshua Bengio has lamented Bill C-27’s lack of progress, while former minister of justice and attorney general David Lametti is “not optimistic” it will receive royal assent.

With files from Aaron Anandji.

Feature image courtesy Justin Trudeau via Flickr.

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Mississauga-based Trexo Robotics says its robotic legs device has helped children with disabilities walk over 100 million steps. 

One user testified that she went from 30 steps in a manual walker up to 4,000 steps with a Trexo. 

Trexo provides a pair of robotic legs, also called an exoskeleton, that is built around an external walker frame. When a person’s legs are attached to the exoskeleton, they are able to independently move while being supported by the frame, allowing them to exercise and build strength. The device is intended to assist children with cerebral palsy, spinal muscular atrophy, muscular dystrophy, brain injuries, and other conditions that affect leg mobility. 

Trexo Robotics was founded in 2016 by CEO Manmeet Maggu and CTO Rahul Udasi, two mechatronics engineering graduates from the University of Waterloo. In 2011, Maggu learned that his nephew, Praneit, was diagnosed with cerebral palsy and would not be able to walk independently. Maggu’s family searched for solutions, only to find that most existing exoskeletons were being designed for adults.

Trexo keeps a live count of steps made with its device on its website, which finally eclipsed 100 million assisted steps on Nov. 10, ending months of informal office bets, Maggu told BetaKit in an interview. 

“To have been a part of creating a world where a child that wishes to walk can actually have the ability to walk is something truly incredible,” Maggu said. “It’s one thing to build a prototype and show that it can be done, which we did with my nephew when I found out he was diagnosed with cerebral palsy, but completely different to then collectively take 100 million steps.”

RELATED: Trexo Robotics wants to redefine mobility for children with disabilities

The startup graduated from Techstars’ accelerator program, Y Combinator’s Winter 2019 cohort, and has raised more than $5 million to date, though Maggu declined to disclose any further details.

Maggu said that Trexo has approximately 300 units in use, averaging out to around 333,000 steps per unit. According to Trexo, Mitch, a 10-year-old with an undiagnosed rare genetic disorder, made up more than 2 million of those steps on his own. 

While Trexo started by looking to help children with disabilities, Trexo spotlights an adult user named Alex in a recent YouTube video. In the video, Alex testifies that she was able to go from making 30 steps at one time in a manual walker up to 4,000 steps with Trexo. Maggu said that Trexo focuses on helping children, but the main limitation is really just weight and leg length, so technically some adults can use its device. Maggu added that Trexo wants to eventually serve the adult market in the future. 

Trexo’s main offering costs nearly $35,000 CAD for small and medium fits, while large and extra large options cost nearly $40,000. Both come with 36-month leasing plans with a $1,000 down payment. Trexo orders come with the exoskeleton, a tablet to operate it with, a training video call, and regular check-ins with Trexo.  

Trexo’s website says its price will be increasing to $44,900 for all sizes, but has not announced when that increase will occur. 

While Maggu acknowledged the price is an inequitable barrier, robotic systems are “incredibly expensive to build.” He added that the company is working on methods to make its tech more accessible in order to get to its next goal of 1 billion steps. 

This includes expanding to the United States next year, where insurance companies have covered the cost of exoskeletons, and getting Canadian insurance companies, school-based programs, or other providers like Ontario’s Assistive Devices Program to do the same. 

“One of our key focuses for the next year or so is improving accessibility,” Maggu said. “So we’re building equitable access to this technology, and we think the way that can happen is by showing these [Trexo’s] benefits to the providers.”

For the holiday season, the company is putting on “12 Days of Trexmas,” where 11 different families can win one-month free trials, and one will win a 12-month Trexo lease. 

UPDATE (15/5/2024): This story has been updated with information and commentary shared by Trexo CEO Manmeet Maggu.

Feature image courtesy Trexo Robotics.

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As artificial intelligence (AI) companies, creatives, and copyright holders clash, Canada’s Musical AI has teamed up with another early-stage music technology startup to build what it says will be a “completely legal and licensed” AI song generator.

The company has partnered with India-based Beatoven.ai to develop the new service, which will combine Musical AI’s rights management platform with Beatoven.ai’s AI song generation software. They say the AI song generation model, which they plan to launch in the second half of 2025, will be trained on over three million songs, loops, samples, and sounds—all with permission from and compensation for rights holders.

Musical AI aims to help rights holders like musicians and record labels get paid for licensing their music to generative AI companies.

AI has come for the music industry: this partnership comes amid a rise in AI-generated music. Many musicians have pushed back against more predatory applications of AI to music, while others have embraced the technology as a tool for supporting their work. Meanwhile, some of the companies powering the creation of AI songs have faced lawsuits from record labels alleging that they have scraped copyrighted songs to train their models without consent.

“Generative AI is already playing a significant role in music creation,” Musical AI co-founder and CEO Sean Power told BetaKit over email. “Rather than fighting it, we believe that it’s important to lead by example in creating tools that honour artists’ contributions and compensate them fairly.”

Beatoven.ai is among the growing group of AI companies that help users generate full songs based on text, audio, and video prompts. It has gathered traction as a tool for making royalty-free background music for videos, podcasts, audiobooks, games, and other uses: Beatoven.ai claims it has helped over 1.5 million users create more than six million tracks to date. It claims to provide musicians with “equitable compensation” for contributing their music. 

Enter Musical AI. Founded by Power and two other musicians with experience in tech—COO Matt Adell and CTO Nicolas Gonzalez—the startup has built rights management, licensing, and attribution tech for AI music. “Our aim was to develop a system where rights holders could securely license their music for AI training with proper attribution and compensation, and where AI companies could access high-quality data ethically and legally,” Power said.

“We launched Musical AI in late 2023 after recognizing the tension between advancements in AI-generated music and the rights of musicians and record labels,” Power said. “While lawsuits against AI companies for using copyrighted music without consent were a factor (and it was obvious they were coming), our decision was largely driven by a deeper understanding of the need for a collaborative solution.”

RELATED: Music collaboration startup BeatConnect raises $2.25 million CAD

Musical AI’s software helps intellectual property (IP) holders like musicians and record labels get paid for licensing their musical data to generative AI companies. The startup aims to offer music rights holders access to new revenue streams and help them retain control over how their IP is used, while also protecting AI companies and their clients from lawsuits. Musical AI already has agreements with rights holders like Symphonic and Kanjian.

To date, Musical AI has secured $1.3 million USD in equity funding as part of a pre-seed round led by Halifax’s Builder Ventures that it plans to fully close by early 2025. The round saw support from a group of angels including British musician Tommy Danvers of Ministry of Sound and Right Said Fred. The startup intends to raise seed financing during the first quarter of 2025.

“We believe with this partnership, we will set the way forward for how business models need to be built in AI with the rightsholders being compensated for the data the models are trained on,” Beatoven.ai founder and CEO Mansoor Rahimat Khan said in a statement. “We have historically been adopting this model in direct partnerships with independent artists and by joining hands with Musical AI we will build a sustainable revenue-sharing model using their attribution technology.”

RELATED: Beatdapp unveils $22.9 million CAD, partnerships with Universal Music Group, SoundExchange, Napster

Though this partnership with Beatoven.ai, Musical AI will provide data licensing, attribution of generated outputs, and payments to rights holders, who the company said will receive “an appropriate share” of the model’s revenue based on usage, likening it to how they are paid when music is streamed on a commercial service. This AI song generation model will be trained on the existing rights holder catalogues of Musical AI.

“As musicians ourselves, we view AI as a valuable addition to the industry—one that opens up new possibilities without diminishing the role of the human at the centre of the creative process,” Power said. “It’s crucial to us that AI models respect and acknowledge the contributions of human creators, which is why proper rights management and attribution are at the core of what we do.”

Power said it is up to artists and listeners to shape the future of music and AI. “Whether AI is used as tools to help song creation, or to generate background music for content, or even to create entire songs without human input—consumer preferences will drive these developments,” he said.

Musical AI hopes to ensure that it is “used in a way that benefits everyone.”

Feature image courtesy Unsplash. Photo by Marcela Laskoski.

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The Business Development Bank of Canada (BDC) has launched a new program meant to help small-and-medum-sized businesses (SMBs) learn about and access financing to adopt artificial intelligence (AI). 

BDC noted that many companies seem unaware of the AI capabilities built into their existing tools.

Through the Data to AI program, BDC will offer SMBs personalized training and advice surrounding AI adoption, as well as help develop a roadmap that will integrate AI into businesses, fully supported by access to BDC financing. The Crown corporation said the program aims to help companies accelerate their growth and continue innovating in an evolving business landscape.

“We believe that every small business needs and deserves the opportunity to benefit from the power of AI,” BDC executive vice president and COO Véronique Dorval said in a statement. “Our tailored solutions provide the guidance and support needed to integrate these technologies seamlessly and securely into entrepreneurs’ operations and help them increase their productivity.”

The program also includes a cybersecurity assessment to help SMBs protect against potential risks, as well as workflow automation assistance.  

RELATED: BDC hopes to reverse trend of declining Canadian entrepreneurship through Community Banking initiative

Businesses that apply for the program will work with BDC to identify objectives and roadblocks before putting together a financing plan. The financing plan includes a term loan that can support the total costs of the project, including consulting, software acquisition, and implementation, with a repayment period of up to eight years. 

BDC noted that, in a recent study it conducted, many companies seem unaware of the AI capabilities built into their existing tools. According to its survey, 39 percent of business owners and decision-makers believe they are using AI, but 66 percent recognized AI tools when shown a list. 

The new program has echoes of Digital Main Street’s Future Proof Program and Canada’s Digital Adoption Program, which earmarked $4 billion in 2022 to help up to 160,000 SMBs grow their online presence and upgrade or adopt digital technologies. 

At this year’s ALL IN conference in Montréal, BDC vice president of technology financing Dwayne Dulmage said bank lenders like BDC have historically invested in physical upgrades like buildings, but neglected technological innovations, a deficit the agency now appears to be trying to correct. 

Feature image courtesy BDC.

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Montréal-based SRTX, the maker of Sheertex “unbreakable” tights, has secured $25 million USD ($35 million CAD) in convertible debt from the Québec government’s investment arm to scale its wholesale manufacturing operations in the province.

SRTX confirmed to BetaKit that the investment is part of a larger $50 million USD ($70 million CAD) round of all-primary convertible-note financing, which the company is hoping to close by the end of the year. Returning investors include Toronto-based ArcTern Ventures and Philippines-based Kickstart Ventures. According to SRTX, the new money will bring its total funds raised to nearly $250 million USD, including debt.

CEO Katherine Homuth said that the investment from IQ will allow SRTX to boost production capacity while investing in vertical manufacturing in Québec.

SRTX is the holding company for Sheertex Inc., the manufacturer of Sheertex rip-resistant tights. Sheertex makes its pantyhose out of a uniquely durable polymer called ultrahigh-molecular-weight polyethylene (UHMWPE), which has been called a ballistic-grade “super material” several times stronger than steel wire. 

In addition to its flagship rip-resistant tights, SRTX has two B2B products: Cortex, a software-based manufacturing solution, and Watertex, a patent-pending water-repellent fabric. 

In a statement, founder and CEO Katherine Homuth said that the investment from IQ will allow SRTX to scale and boost production capacity while investing in vertical manufacturing in the province—meaning that SRTX will own and operate all levels of its supply chain. The new funding will also help SRTX expand its raw material manufacturing of the fibres used in Sheertex and Watertex.   

“We are convinced that, with partners like IQ, our decision to invest in vertical manufacturing in Québec will prove to be a key component for the success of the company,” Homuth said in a statement.

With the new financing, the company plans to add 100 people to its 350-person team, with the goal of reaching profitability by late 2025. The retail company was valued at roughly $350 million USD in 2022 following a $101-million USD Series C.

RELATED: “It’s life or death”: Québec ecosystem frustrated after IQ suspends early-stage program 

IQ president and CEO Bicha Ngo said in a statement that Sheertex has an “undeniable competitive advantage in the market” due to its rip-resistant technology. 

The funding announcement comes as IQ experiences budgeting constraints resulting in layoffs and startup funding program suspensions. According to the Globe and Mail, the investment in Sheertex marks a renewal of interest in textiles after little investment in the sector for several years. 

Homuth told The Globe and Mail that Sheertex is now moving away from a direct-to-consumer online business model to targeting wholesale retailers. Some retail clients include large brands such as H&M, Costco, and Walmart. 

In a Substack post on Dec.7, Homuth explained that Sheertex’s strategy was to prove market viability at a loss, allowing the company to raise more funding, which it will invest in infrastructure to reduce costs. 

“It’s not glamorous, and it’s not easy,” Homuth wrote. 

And so far, the plan seems to be working: this year, the company sold over 2 million pairs of tights, but Homuth said that demand is projected at 10 million pairs next year. Sheertex’s initial product cost was over $100 per pair—half of which was due to the expensive ballistic-grade fibre. Now, the company has reduced that to $13 per pair, targeting $5 per pair by the end of next year. 

This month will be the first where Sheertex uses the unbreakable fibre produced entirely on-site. Scaling up fibre production, partly through expanded operations in Québec, is the “final piece of the puzzle” toward profitability, according to Homuth.

Two-time founder Homuth started Sheertex in 2017, then known as Sheerly Genius.  The startup graduated from the winter 2018 cohort of Y Combinator and raised over $190,000 USD on Kickstarter for its snag-resistant tights by 2023. SRTX opened its new Montréal headquarters in February 2024, following the introduction of a new factory in 2023 in Pointe-Claire, Que. 

The pivot to using Québec’s hydroelectric power for manufacturing operations has helped cut down on production costs, Homuth said, and the company hopes to drive costs down further in the coming year. 

The company is also developing a project called “Renew,” which aims to reduce waste by recycling used tights for reuse in its raw material manufacturing.

Feature image courtesy CNW Group/SRTX.

The post Sheertex maker SRTX gets $35 million CAD backing from IQ to grow manufacturing operations in Québec first appeared on BetaKit.

Amy Olah vividly remembers the moments in her career when startups faced “extinction-level events.”

As Head of Canada and US West Coast Originations at CIBC Innovation Banking, she is constantly tuned into the market shifts that influence high-growth startups, especially as they relate to one of the bank’s key services: venture debt.

“Venture debt is not going anywhere. It’s only becoming more and more popular.”

Amy Olah, CIBC

Olah saw these shifts during the widespread credit crisis of 2008, in 2020 when the COVID-19 pandemic hit, and again—dramatically—when several US regional banks collapsed in 2023. 

Each of these events sent shockwaves through the startup ecosystem, and impacted how the sector thought about financing.

“Venture debt generally doesn’t change. Your structure doesn’t change, the use of that capital doesn’t change,” Olah said. “But what might change is how people view it, and their comfort with it.”

Indeed, after the US regional banking collapse in 2023, venture debt deals in Canada slowed to just 10 percent of non-dilutive financing, as companies across the country had to reassess their landscape of partners.

But Olah said that venture debt is more resilient to market fluctuations than asset classes like equity financing. And she believes that understanding the shifts in perception that have driven past behaviour will help founders better navigate their choices.

Here, she breaks down different market conditions that can impact common perceptions of venture debt.

When the market is hitting its stride

Venture debt differs from traditional debt structures designed for more established companies. It’s tailored for early-stage startups that are typically not yet cash flow positive and lack significant assets to secure a loan.

Offered as a term loan with both principal and interest payments, venture debt is usually provided to startups backed by venture capital during equity rounds. Lenders often rely on the VC’s due diligence to evaluate the borrower’s growth potential. The debt often serves as critical working capital, helping startups bridge to their next fundraising.

“I often remind the founder to not necessarily pick the term sheet with the best price or the largest loan size, but instead to take into consideration who you want your partner to be.”

The main distinction between equity and debt lies in control and obligations: with equity, founders give up some control but don’t face immediate repayment. With venture debt, control remains intact, but there is a clear obligation to repay the loan, which makes the option appealing to companies seeking growth capital without the dilution.

In a strong economy, startups often have greater access to equity financing at higher valuations, which can make them less discerning when it comes to choosing their lender. 

Olah believes that founders need to be aware of this tendency, and ensure that they pursue the right partners, even in boom times. 

“I often remind the founder to not necessarily pick the term sheet with the best price or the largest loan size, but instead to take into consideration who you want your partner to be and who you want to work with on a consistent basis,” Olah said.

Olah recommends that companies look for a lender who knows their sector well and is deeply connected to the ecosystem.

Asking questions is important, and founders should not focus solely on the financial terms. Startups should know if their lender’s risk and credit management teams specialize in tech and software, and how long the institution has been lending to the sector.

Expertise, flexibility, and clear lines of meaningful support can create the trust that represents a true partnership, said Olah.

“You should meet your lender,” she added. “Meet them in person, shake their hand, and get to know them, because you’re probably going to be spending a lot of time with them, and the better that you know them, the better and more helpful we can be.”

When capital becomes scarce

For the past two years, tech startups in Canada—and globally—have been navigating a challenging equity fundraising landscape. Investors have become more cautious, driven by market volatility, rising interest rates, and shifting economic conditions. This has tightened the flow of capital, making it harder for startups to secure funding, especially at the valuations they once enjoyed.

“We just have to bring Canadian entrepreneurs up to speed and have them understand venture debt.”

In these sorts of environments, founders may turn to venture debt as a way to extend their runway without giving up as much control.

But the market’s nervousness might also lead to more stringent lending requirements, higher interest rates, or more aggressive warrant coverage—all of which reflect lenders’ increased risk.

“When things are great, it’s always easy to raise venture debt alongside a round,” said Olah. “But when the market shifts, there’s a few things that we might look at to ensure that the founder is focused.” 

She said those things include market awareness, a strong hold of cash management, alignment with a venture capital investor, and a thoughtful plan for navigating potential market downturns.

“If you’re in a place where you’re unsure of your top-line revenue or your future forecasts, venture debt might not be right for you,” said Olah. “If you’re uncomfortable with the covenants that the venture debt lender has proposed, venture debt might not be the right choice for you.”

When the unthinkable happens

In March 2023, the US regional bank collapse shocked the world. Fears around Silicon Valley Bank’s liquidity triggered a bank run, its rapid shutdown by regulators, and ultimately led to its sale.

The crisis came as the world was still recovering from a global pandemic, and startups faced heightened uncertainty and a temporary paralysis in the venture debt market. 

Many companies that had credit facilities or term loans with SVB were left scrambling to secure new banking relationships and alternative sources of capital. 

“There was panic that happened across the board for additional sources of capital,” Olah recalled. 

But the shift also prompted startups to reevaluate their financial partners. Companies that once viewed venture debt as a smart way to extend runway were now forced to confront the vulnerability of their lenders.

Olah stresses that Canadian venture debt providers are more stable and less vulnerable to sudden collapses or liquidity crises, largely thanks to their ties with strong banks.

She believes startups should understand this context, and ask their financial lenders how they have navigated previous periods of stress with their portfolio.

The CIBC Innovation Banking team has 25 years of experience in supporting early and growth stage tech and life science, making it one of the most active venture debt providers in Canada. 

“These are all things that might seem trivial when things are booming, but they really really matter when something doesn’t go as planned,” said Olah. “I’ve yet to meet a founder or CEO who told me their startup’s journey has been a straight smooth line up and to the right. They are bumpy journeys and it’s important to have capital partners who have experienced those ups and downs, when it comes to both equity and debt.”

Olah is confident venture debt will remain a vital option, no matter the economic climate. In strong markets, venture debt offers a strategic growth partner; in tougher times, it’s a way to stay agile and scale without giving up equity.

“Venture debt is not going anywhere,” she said. “It’s only becoming more and more popular.”

Olah noted that venture debt has gained momentum in the Canadian market, experiencing a “snowball effect” after gaining popularity among US founders. For Canada, she said the remaining gap in adoption isn’t about availability, but comfort.

“We just have to bring Canadian entrepreneurs up to speed and have them understand venture debt and its use,” Olah said. “The more they use it, the more comfortable they’re going to get.”

PRESENTED BY

CIBC Innovation Banking is dedicated to supporting Canadian innovators.

The CIBC Innovation team understands what innovators need and has the capital commitments to back it up. Learn more now.

Image provided by CIBC.

The post Markets change. Venture debt doesn’t have to. first appeared on BetaKit.

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

In the early days of Wattpad, Eva Lau remembers a piece of advice she often heard for founders: craft your exit strategy early.

The company already knew something about building narratives. Wattpad, founded by Ivan Yuen and Lau’s husband, Allen, was quickly convening a global community of writers and readers.

“If the most obvious acquirers are easy to spot, you can bet other companies are already knocking on their doors.”

Lau was Wattpad’s head of community and content until 2013, and said that, back then, many people believed the company would be bought by someone in the traditional world of book sellers.

“Initially, there were many guesses, saying, ‘Oh, you have so many stories on your platform—one of the publishers will, for sure, buy you,’” Lau said.

But that’s not the story they crafted.

In 2021, Wattpad was acquired by South Korean Internet conglomerate Naver Corporation in a deal worth $754 million CAD.

Naver was far from a traditional publisher. The South Korean web conglomerate was an early pioneer in user-generated content, and Wattpad became a vital part of Naver’s digital storytelling ecosystem, anchored by Webtoon.

The deal reflected a larger play by Wattpad and a deeper understanding of the potential for storytelling to be a catalyst for new content formats and creative opportunities, from comics to screen adaptations. It unlocked endless new ways to bring Wattpad’s stories to life.

Lau said that Wattpad’s acquisition defied what she describes as a common investor-driven narrative in Canada, which often pushes founders to shape their companies around obvious, short-term exit strategies. She believes the job of a founder, first and foremost, is to build an amazing business.

In Wattpad’s case, that meant they had been pushed to look for obvious buyers instead of a global company that was aligned with their larger value proposition.

“I think this narrative was being pushed by early-stage investors who are not necessarily visionary,” she added, referencing fund managers who are often looking for a return in three to seven years.

It is a narrative she is looking to defy with Two Small Fish Ventures, where she is co-founder and general partner. Her firm, which recently closed its third fund, has seen several successful portfolio exits via mergers and acquisitions, including SkipTheDishes and Printify.

Eric Sleeth, Senior Product Marketing Manager at Sage said many startups and growth-stage companies have turned to M&A as a viable path to scale or exit, especially with the IPO window closed at the moment.

“M&A is a core business strategy, whether it’s about achieving an exit or expansion. It can be enabling entry into new markets, acquiring new capabilities or consolidating competition and responding to industry trends, while also addressing financial goals.” Sleeth said.

Lau believes that successful M&A requires strategic vision, thoughtful execution, and a focus on building long-term value. It starts, she says, with thinking beyond the obvious.

“If you are the darling in your field, opportunities for exit will become apparent along the journey.”

“If the most obvious acquirers are easy to spot, you can bet other companies are already knocking on their doors,” she said. 

Instead, she encourages founders to explore markets where their company can become the “crown jewel” of a potential acquirer’s vision. 

This strategy was evident in the exit of SkipTheDishes, which had Two Small Fish as one of its earliest investors. The startup focused on food delivery in low-density markets like Winnipeg, rather than major cities where most food delivery apps were focused. 

This approach positioned SkipTheDishes uniquely for its eventual buyer, Just Eat, which needed a solution for other low-density markets like Australia.

“They had something the other company didn’t have. It was the missing piece,” Lau said. “If you are the darling in your field, opportunities for exit will become apparent along the journey.”

The same logic applied to Wattpad’s acquisition. Lau explained that by focusing on customers and leveraging AI to promote the best stories, Wattpad seamlessly integrated into Naver’s global strategy instead of being absorbed into a traditional publishing model.

This kind of foresight is only one side of the equation. Sleeth said in order to execute a truly successful M&A strategy, only companies with strong operational foundations will uncover these unique levers. 

“The backbone behind M&A is the financial reporting,” Sleeth said. “A M&A requires thorough financial due diligence, accurate valuation, and careful integration to streamline operations and achieve cost synergies. If you are seeking to get acquired or to have an exit of some sort, unified reporting with robust forecasting is what can determine whether or not that exit is successful.”

For founders looking to exit, Sleeth said Sage Intacct helps them quickly create accurate, reliable data rooms that showcase the health of the business, giving investors far more confidence than what manual tools can provide. For acquirers, the platform streamlines the challenges of managing multi-entity businesses, whether that means integrating them into core operations, or maintaining them as independent businesses.

This efficiency becomes critical once the deal is signed, with Lau describing the post-acquisition phase as akin to adopting children. “One is already a teenager, one is still a toddler, and another is throwing tantrums all the time.”

“On both sides of M&A, you’re introducing a ton of operational and financial complexity,” Sleeth added. “Sage Intacct makes all of that very simple and very easy.”

PRESENTED BY

Discover 10 reasons SaaS companies choose Sage Intacct. Download this e-book to learn why we shine as a trusted partner vested in your success.

The post Lessons from Wattpad’s $754-million exit first appeared on BetaKit.

A British Columbia Securities Commission (BCSC) panel has imposed an $18.4 million fine and a lifetime ban from the capital markets on ezBtc and its owner David Smillie. 

The penalty stems from BCSC finding this past August that ezBtc, a Nanaimo, BC-based cryptocurrency trading platform, 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.

“[Smillie] could not have had a legitimate expectation that it was permissible to defraud customers and deprive them of their assets.” 

EzBtc, incorporated by Smillie and operational from 2016 to 2019, purported to customers that it was a platform to buy and sell various crypto assets while keeping customer assets in “cold storage.”

As opposed to hot storage, cold storage is the practice of keeping digital assets in an offline environment, typically long-term, to protect them from unauthorized access. 

The panel found that, as the company’s director, Smillie was aware that ezBtc did not keep custody of all customer assets and should have been aware that diverting customer assets could result in serious financial consequences for those customers. 

In recompense, BCSC’s executive director recommended a disgorgement penalty based on the defrauded amount of $13 million in addition to a matching administrative penalty. The disgorgement penalty was ultimately reduced to $10.4 million based on repayments made to customers, while the panel found an $8 million administrative penalty to be sufficient. 

RELATED: BC Securities Commission panel finds crypto platform ezBtc diverted one-third of customer funds to gambling, personal accounts

The panel found that Smillie committed the same misconduct as the company and would face the penalties jointly and severally, meaning with equal liability.

While the panel found no mitigating factors, Smillie submitted that the unclear and shifting regulatory landscape for crypto asset trading platforms between 2016 and 2019 was a “significant mitigating factor.” The panel found that, whether he understood securities law or not, Smillie “could not have had a legitimate expectation that it was permissible to defraud customers and deprive them of their assets.” 

In its findings this past August, BCSC said ezBtc customers deposited more than 2,300 bitcoin and over 600 ether to the platform, approximately one-third of which was diverted to gambling websites or to Smillie’s personal accounts on other crypto trading platforms. In one case, a customer deposited 0.2495 bitcoin, sold it for over $2,500, and requested a withdrawal the next day. Despite multiple assurances from Smillie, the customer never received his money and a tracing revealed that the bitcoin had actually been transferred from ezBtc to a gambling website 14 minutes after the initial deposit. 

Feature image courtesy Kanchanara via Unsplash.

The post BC Securities Commission fines ezBtc owner $18.4 million over crypto fraud first appeared on BetaKit.

Shopify has broken its sales record for the Black Friday-Cyber Monday (BFCM) weekend yet again, despite warning that an unresolved Canada Post strike would “devastate” the Canadian economy last week. 

Shopify has beat its BFCM sales record every year since it started sharing the data. 

According to Shopify’s retrospective report of the weekend, the e-commerce giant’s merchants generated a cumulative $11.5 billion USD in sales over the BFCM weekend. The figure marks a 24 percent increase on the $9.3 billion in sales recorded for the same occasion last year, which set another record in itself. Shopify has beat its BFCM sales record every year since it started sharing the data. 

The report says that more than 76 million consumers made purchases, with more than 67,000 merchants having their highest-selling day ever on Shopify over the weekend, and 16,500 merchants making their first-ever sale. Shopify says sales peaked on Black Friday at 12:01 p.m. EST with $4.6 million being processed per minute. 

Shopify also saw a 58 percent year-over-year increase in sales using its one-click online checkout solution, Shop Pay.

According to the report, the United States, the United Kingdom, Australia, Canada, and Germany were the top-selling countries. A Shopify spokesperson told BetaKit that the average cart price in Canada was $199.60 CAD, more than the global average of $152.69 CAD ($108.56 USD). Point-of-sale sales made by Shopify merchants in Canada also grew by 32 percent compared to last year’s BFCM weekend. 

The weekend wasn’t without its hiccups, as Shopify merchants reported issues in using their Shopify emails to reach out to their customers on Black Friday. Shopify Support confirmed the issue on Friday evening, later saying the issue was resolved on Saturday morning. 

The apparent sales bonanza contrasts with Shopify’s hardline letter to Minister of Labour and Seniors Steve MacKinnon last week, which called on the federal government to “do whatever is necessary” to get 55,000 striking Canada Post workers back to work ahead of the BFCM weekend. In the letter, Shopify claimed at least 67,000 of its associated small businesses rely on Canada Post to fulfill orders and suggested the use of binding arbitration. MacKinnon later said that option was “not in the cards.” 

RELATED: Shopify calls on feds to “do whatever is necessary” to resolve Canada Post strike before Black Friday

While the strike is still ongoing, the company reportedly presented the union with updated proposals on Sunday after a brief period of stalled negotiations. 

The Canada Post strike has cost the small and medium-sized business sector at least $765 million, or $76.6 million each business day, according to a report from small business lobby group the Canadian Federation of Independent Business (CFIB). CFIB claimed that 41 percent of surveyed SMBs reported cost impacts totalling $2,000 in lost orders, more expensive delivery alternatives, late payments, and the inability to promote their business. CFIB said 69 percent of small business owners want the government to introduce back-to-work legislation.

Square and Afterpay also reported their own record-breaking data from their Canadian customers over BFCM weekend. The report said 5.9 million transactions were facilitated by Canadian companies using Square and Afterpay, an 18 percent increase from last year. Meanwhile, online and in-store shopping sales increased by 31 percent and 20 percent, respectively, with online cart sizes larger than in-person carts by nearly a factor of five. Buy Now, Pay Later transactions through Afterpay also increased 23 percent year-over-year.

Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar. 

Feature image courtesy Shopify via LinkedIn.

The post Canada Post strike didn’t slow Shopify’s record-breaking BFCM weekend first appeared on BetaKit.

Koho CEO Daniel Eberhard took the stage at the Elevate Festival in October and provided an update on his company’s ongoing work to secure a Schedule 1 banking licence. If successful, Koho will be the first Canadian FinTech startup to achieve this regulatory status.

“We want the ability to control our own destiny,” Eberhard explained to the audience. “We really think infrastructure matters in banking.”

It’s a subject the founder knows something about. For years, the company has been quietly investing in its own internal infrastructure, including a complex migration process that helped create the underpinning for a new way of banking.

Migrating to the big time

By 2019, Koho had reached a turning point. 

Founded five years earlier, Koho was motivated by the belief that Canadians were fed up with traditional banking. In a short time, Koho grew a dedicated user base with its accessible spending and saving account, cashback rewards, and credit-building tools.

“The fact that we got to this operating state without losing any of our core business is pretty awesome.”

As its customer base grew, so had Koho’s ambitions, and they began looking for a partner who could match their agility.

“Mastercard was a partner who could match the product velocity we expect at Koho,” said Koho’s chief product officer, Jack Chung. “We expect high quality products and services that help a generation of Canadians make financial progress, and it’s important to have a strategic partner that believes the same.” 

Koho entered into a partnership with Mastercard that allowed the company to issue prepaid cards and take charge of their own product offerings, branding, and customer experience. It was the beginning of the process to control their own destiny.

In Mastercard, Koho found a partner also focused on transformation. The global giant was no longer just a credit card company—it had become a payments technology powerhouse well equipped to enable the growth of emerging FinTechs.

In addition to a payment network, Mastercard offered Koho insight into market trends and consumer behaviour, along with the technical experience from its data and services team to help make it all work.

“Koho was really looking to evolve to grow the business, and was looking for a partnership to gain more control over key aspects of their business and operations,” said Maria Riesenberg, Vice President of Market Development, Mastercard, Canada.

There was only one catch. To achieve their shared goals, Koho and Mastercard had to migrate the FinTech startup’s entire customer base over to the new Mastercard-backed system.

“I was really worried that either customers just weren’t going to switch their cards, or they’d walk off altogether,” said Koho’s head of payments Shane Parkhill.

Speed without sacrifice

Over three years, Koho and Mastercard worked on migrating Koho’s new and existing customers over to the Mastercard network. 

“We deliberately went a little slower than we needed to, because we had a bunch of internal work to do in order to make all of our systems ready to adopt a new network,” Parkhill said.

Mastercard’s data and analytics experts helped Koho understand how to approach the migration, communicate with customers, and craft the right message to switch customers to the new network.

This included strengthening Koho’s data security, carefully mapping user data and transactions to prevent service disruptions or data loss, and coordinating with third-party vendors to ensure a seamless transition. Parkhill said nailing down the details of the migration early on was crucial.

“As a company that wanted to move really fast but knew that data security and platform stability was paramount, Mastercard was a fantastic resource in helping us figure out the steps we needed to take in order to get from A to B,” Parkhill added. “It always felt like they were trying to help us win.”

For Riesenberg, trust is the foundation of every FinTech partnership Mastercard forms. “Building trust means having open and honest conversations and not being afraid to pivot in critical moments,” she said.

When the migration wrapped up in 2023, Koho had retained 99 percent of its customer spend. More than two-thirds of Koho’s customers now use the service as their primary financial account.

Reflecting on Koho’s growth, Parkhill credits Mastercard for cutting through the red tape and speeding up the process.

“The fact that we got to this operating state without losing any of our core business is pretty awesome,” he said.

To Riesenberg, Koho’s success speaks to Mastercard’s focus on supporting the future of financial services.

“Koho is delivering unique and differentiated solutions that really are innovative in nature,” she said. “Our work with FinTechs is really all about fostering innovation and expanding Mastercard’s reach into new customer segments, while creating trusted relationships.”

PRESENTED BY

Whether you’re just starting or scaling globally, Mastercard provides the tools for your success. Discover how we can boost your FinTech startup’s growth. 

Learn more about how Koho is helping Canadians make financial progress at koho.ca.

Feature image provided by Mastercard.

The post Stability and speed: Mastercard’s partnership with Koho first appeared on BetaKit.

Toronto-based online brokerage and wealth management firm Questrade Financial Group has laid off an undisclosed number of employees. 

Questrade has previously said that it had more than 2,000 employees globally. The layoffs were first reported by The Canadian Press and confirmed by BetaKit. 

“This change is not reflective of the state of [Questrade’s] underlying businesses, which continue to be very healthy, but is intended to better align with the strategic direction of the business going into 2025 and beyond,” a spokesperson from Questrade said in an email statement to BetaKit. “The organization remains committed to its mission and to challenging the status quo of financial services in Canada.”

Founded in 1999, Questrade provides a discount brokerage platform to Canadians. Much like Wealthsimple, Questrade users can open self-directed stock-trading and investment accounts as well as managed portfolios. The company claims to have more than $60 billion in assets under its administration. 

RELATED: Lightspeed lays off 200 employees in second restructuring of the year

While Questrade is making cuts, its biggest competitor, Wealthsimple, is adding staff. Wealthsimple co-founders, CPO Brett Huneycutt and CEO Michael Katchen joined the BetaKit Podcast in October to discuss the company’s journey, its recent growth, and how they plan to build “the largest Canadian financial institution.” To help it get there, the company announced plans to triple its headcount in Alberta to 105 by the end of 2025 as it recruits for engineering, product, client experience, sales, and operations roles in the province.

Questrade managed to beat Wealthsimple to the digital mortgage space with the official launch of QuestMortgage in March 2022. Marketed as a “quick, easy-to-use mortgage service,” the direct-to-consumer prime mortgage service was provided by Community Trust Company, which Questrade acquired in 2019. 

However, it appears the offering was short-lived, as QuestMortgage is now offline, trade publication MortgageLogic reported this past September. The QuestMortgage landing page now reads: “We’re always looking for ways to serve our customers better. So while we’re busy making improvements, we’re unable to accept new mortgage applications at this time.”

BetaKit asked Questrade about the current status of QuestMortgage but did not receive a response by publication time. 

Mortgages have been on Wealthsimple’s roadmap for years, and the company finally entered the digital mortgage space earlier this year through a partnership with Toronto-based digital mortgage startup Pine.

Feature image courtesy PiggyBank via Unsplash. 

The post Online brokerage Questrade lays off undisclosed number of employees first appeared on BetaKit.

Canadian-founded, United States (US)-based artificial intelligence (AI) hardware company Tenstorrent has secured more than $693 million USD in Series D funding from a slew of big-name investors, including Amazon founder Jeff Bezos’s investment firm and electronics giant Samsung.

The AI chipmaker said it plans to use the funding to build out its open-source AI software stacks, ramp up hiring, expand its global development and design centres, and build systems and clouds for AI developers as it gears up to compete with Nvidia and other players in the AI chip space.

The all-primary Series D financing, which closed last week, was led by a pair of existing backers, South Korea’s AFW Partners and Samsung Securities, and gave Tenstorrent a post-money valuation of $2.6 billion. The round consisted of over $593 million in equity and a $100-million convertible note from 2023 that became equity as part of this round. This fresh capital brings Tenstorrent’s total funding to date to nearly $1 billion.

“Canada is at the heart of everything we do.”

Bob Grim,
Tenstorrent

In an interview with BetaKit, Tenstorrent vice president of investor relations and corporate communications Bob Grim attributed the company’s successful financing to continually strong interest in AI and the vision and pedigree of CEO Jim Keller.

The Series D announcement comes shortly after Tenstorrent quietly relocated from Canada to the US, moving its headquarters from Toronto to Santa Clara, Calif. 

Grim told BetaKit that the company went stateside for two main reasons. He noted that one of its larger investors wanted to increase its stake, but had a cap on how much it could own if Tenstorrent was based outside of the US. He also said moving to the US is “a very common step” ahead of an eventual initial public offering (IPO) on the Nasdaq or New York Stock Exchange.

Despite the move, Tenstorrent has not left Canada altogether: the company has retained its office in Toronto, where Grim said it employs 140 people today, up from 110 earlier this year.

Grim emphasized that Canada remains a focus for Tenstorrent going forward, and said the firm has committed to continuing to grow its workforce in Canada as part of its latest round, which was supported by three new Canadian investors: Export Development Canada, the Healthcare of Ontario Pension Plan, and Georgian.

RELATED: “The world’s biggest problems are not going to be solved with software”: industry leaders unpack Canada’s opportunities in semiconductors and AI

“Canada is at the heart of everything we do … That’s where our roots are, that’s where we design our AI hardware, and it’s going to remain important to us for the foreseeable future,” Grim said.

Tenstorrent’s Series D round also saw participation from new investors, including US-based Bezos Expeditions and Corner Capital, South Korea’s LG Electronics, and XTX Markets and Baillie Gifford out of the United Kingdom, plus existing backers Fidelity Management & Research Company in the US, Taiwan’s Mesh, and South Korea-based Hyundai Motor Group.

Founded in 2016 in Toronto by former AMD executive Ljubisa Bajic (now of Taalas), Tenstorrent builds and sells chips that can be used for AI training and inference. The company also licenses its AI and RISC-V intellectual property (IP) to clients looking to own and customize their silicon. Grim said that Tenstorrent’s business model involves monetizing its tech “every step of the way,” noting that different clients consume its tech differently.

In 2021, Tenstorrent swapped CEOs, bringing on Keller, a renowned chip designer who previously worked at AMD, Apple, Intel, and Tesla, and raised a more than $200-million Series C round at a $1-billion valuation. Last year, Tenstorrent added another $100 million to its coffers.

RELATED: Samsung, Hyundai, Kia back AI chipmaker Tenstorrent in $100-million round

According to Grim, Tenstorrent’s open-source software stack differentiates the company from its competitors. He said this approach has helped Tenstorrent sell into the automotive and robotics markets, where buyers typically want to inspect and test every line of code due to the risk associated with developing new products without doing so.

To date, Tenstorrent has amassed approximately $150 million in signed contracts. Grim said they have mostly been IP-related up to this point. “We still have a lot of room to grow our hardware business,” he added.

“[Investors] love the fact that we have traction with the IP business and that we have this hardware business, and that it just lessens the risk,” said Grim. “We’ve got multiple ways to monetize our products.”

Grim said that Tenstorrent has no imminent plans to go public, indicating that it is likely at least a couple of years away from an IPO. “If we can build our hardware business reliably to the level we expect, I think a two-year window to an IPO is reasonable, but we don’t know what the market is in two years, so we just have to play it all by ear,” he added.

Feature image courtesy Tenstorrent.

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Two British Columbia (BC) innovation organizations are doling out a combined $9.2 million in funding to projects spanning cleantech and life sciences.

The BC Centre for Innovation and Clean Energy (CICE) is investing $7.7 million into 13 projects made through its call for wildfire tech projects and its July open call for innovation. Crown corporation Innovate BC has also awarded $1.5 million to five BC projects focused on research and development in life sciences, food sciences, or cleantech.

CICE is investing $3.5 million in six of the 74 companies that applied for the 2024 wildfire tech call for innovation from June. The initiative was launched to source and fund projects working to commercialize technology that can help communities adapt to, prevent, and mitigate the impact of wildfires—a problem that is being exacerbated in BC by climate change.

The companies receiving funding from CICE under this stream include CRWN.ai, FireSwarm Solutions, Hummingbird Drones, Skyward Wildfire Technologies, Voxelis, and Wildfire Robotics.

“Wildfires are becoming more frequent and destructive, threatening communities, ecosystems, and the economy,” Sarah Goodman, president and CEO of CICE, said in a statement. “The companies we selected are developing cutting-edge solutions to reduce fire risk, improve response times, and protect vulnerable regions.”

CICE is also investing $4.2 million in seven B.C. climate tech companies, selected from 79 applicants to its July 2024 open call for innovation. The projects span three key areas: low-carbon hydrogen, low-carbon fuels, and energy storage. They include Edison Motors, NORAM Electrolysis Systems, AlgaFilm Technologies, NanosTech Environmental, Ekona Power, Quantum Technology, and Unilia Fuel Cells.

RELATED: BC’s Centre for Innovation and Clean Energy makes $3 million available for women-led cleantech companies

Earlier this year, Ekona Power was among 28 hydrogen power projects that received a cumulative $57 million from Alberta Innovates. The startup closed $79 million CAD in Series A financing in 2022.

To date, CICE has invested $39 million in 59 clean energy and climate technology projects valued at over $196 million through its calls for innovation.

Innovate BC’s funding comes from the province through the Ignite program, which funds innovation projects in the areas of natural resources and applied sciences. To be considered, projects must also address an industry problem with the potential for significant benefit to BC and be implemented by a group of academic and industry members. Each project is receiving $300,000 in funding. 

One funded project, led by Ideon Technologies and the University of British Columbia, focuses on developing cosmic-ray muon tomography to improve safety and efficiency in mineral mining. 

RELATED: Ideon Technologies raises $21 million CAD Series A to fuel transition to low-impact mining and EVs

Another project, Peqish Group in collaboration with UBC, is creating chia-based fat substitutes to reduce calories in foods. Rockburst Technologies and UBC received funding to develop a carbon dioxide-based ore pulverization method that reduces emissions in mineral extraction. 

Also among the Ignite-funding projects is one initiative led by Viridis Research and Simon Fraser University (SFU) to advance water treatment technology for recycling textile wastewater. 

Lastly, Geno10X Biosciences, Gene Bio Medical, and SFU researchers are receiving funding for their work on an artificial intelligence-driven platform for rapid, non-invasive testing for human papillomavirus, better known as HPV.

“These innovations not only address some of the province’s most pressing challenges, but also help promote productivity and growth in key industries, ultimately contributing to a prosperous economy that benefits all British Columbians,” Innovate BC president and CEO Peter Cowan said in a statement.

Feature image courtesy Unsplash. Photo by Noah Buscher.

The post British Columbia deploys combined $9.2 million into projects tackling climate, nutrition, health and more first appeared on BetaKit.

Montréal-based e-commerce and point-of-sale giant Lightspeed Commerce is laying off approximately 200 employees in its second restructuring effort this year. 

The cuts were made as Lightspeed looks to execute on its profitable growth strategy and “prioritize resources for strategic areas of the business,” the company said in a statement. Following the layoffs, Lightspeed is actively hiring in its product and technology teams, as well as specific go-to-market roles, a spokesperson told BetaKit in an email statement. 

Gus Papageorgiou, Lightspeed’s head of investor relations, told BetaKit that Lightspeed will be focusing on retail in North America, which includes its Golf and NuOrder platforms, and hospitality in Europe. Papageorgiou added that any department impacted by the layoffs was outside of those two areas. 

“Lightspeed is focused on growing where we have the strongest product-market fit and right-to-win, particularly in North American retail and [Europe, the Middle East, and Africa] hospitality,” Lightspeed CEO Dax Dasilva said in a statement. “Today’s announcement reaffirms our commitment to building an organization that can fulfill its true potential.” 

RELATED: Lightspeed reduces staff by 10 percent in suite of cost-cutting steps following Dax Dasilva’s return

As of March 31, 2024, Lightspeed had approximately 3,000 employees, meaning these layoffs will impact about seven percent of the company. Lightspeed said the majority of the cuts will be completed within the fiscal quarter, which ends on Dec. 31, 2024. 

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 Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) under the symbol LSPD.

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 (EBITDA)-positive, as the company aims to strike the right balance between revenue growth and profitability to woo investors.

RELATED: Lightspeed, Well Health hit new revenue milestones in latest quarterly earnings

The company already laid off 280 employees and initiated a stock buyback earlier this year as part of Dasilva’s first moves following his return to the CEO job.

This second restructuring occurs amidst a strategic review of Lightspeed’s business and operations, which was conducted with an eye toward a possible sale of the business. The review has already led to Lightspeed postponing its Capital Markets Day—which would have given investors a look into its strategy, performance, and plans— last month. Lightspeed said the reorganization does not affect, or inhibit, the ongoing strategic review process.

Lightspeed’s cuts come only a few days after The Canadian Press reported that Toronto-based online brokerage firm Questrade had laid off an undisclosed number of employees. In an email statement to BetaKit, a Questrade spokesperson confirmed that the company reduced some of its workforce, but declined to disclose any details. The spokesperson added that the changes are intended to “better align with the strategic direction of the business going into 2025 and beyond.”

Feature image courtesy Lightspeed.

The post Lightspeed lays off 200 employees in second restructuring of the year first appeared on BetaKit.

Hiring managers across industries are finding it difficult to hire qualified digital marketers, with the use of AI tools emerging as the technical skill most frequently missing from candidates’ resumes, according to a new report by the Digital Marketing Sector Council (DMSC).

The Digital Marketing Skills Gap Survey, which surveyed nearly 100 stakeholders across various sectors including technology, financial services, and engineering, revealed that 56 percent of employers find it extremely difficult to recruit qualified digital marketers due to a lack of suitable candidates.

“Ultimately, employers want to know if you can take what they give you and help achieve their goals.”

Chris Penner, DMSC Operations Manager

As digital marketing becomes increasingly vital for businesses of all sizes, the DMSC report was created to identify key skills gaps and specific expertise sought by employers.

The top three technical skills prioritized by hiring managers—organic social media management, paid social media advertising, and search engine optimization—are also the skills most commonly found on resumes.

But while this bodes well for job seekers, other critical skills are notably absent.

Almost 30 per cent of employers identified “influencer management” as a skill commonly missed on resumes. Given the growing consumer reliance on influencer recommendations, the report suggests candidates should gain experience managing influencer relationships to remain competitive.

The top technical skill found to be missing on resumes is “utilization of AI tools” (32.26 percent). This directly reflects the increasing importance of AI in digital marketing, as highlighted by the McKinsey Global Survey showing 65 percent of companies already regularly use generative AI. Job seekers who want to stand out should not only list their AI skills but also consider formal training to deepen their expertise.

In fact, education remains a considerable factor in hiring decisions, even as expertise shifts rapidly.

The Digital Marketing Skills Gap Survey found that nearly 69 percent of hiring managers view a bachelor’s degree as a requirement, and fewer than half (49.46 percent) recognize industry certifications as sufficient qualifications.

Chris Penner, Operations Manager at the DMSC, suggests this reliance on conventional education may be hindering the hiring process. 

“When it comes to digital marketing, those technical skills where you’re going to be able to optimize the backend of the website for search engines, launch a retargeting meta ads campaign, those practical lessons are not in traditional forms of education,” he said.

To address these issues, the report recommends that employers prioritize skills over traditional education. By recognizing certifications, such as Jelly Academy’s Digital Marketing Bootcamp or Brainstation, businesses can better attract and retain top digital marketing talent while staying competitive in a rapidly evolving industry. Other recommendations include offering remote positions to expand the talent pool, and fostering a culture of continuous learning.

These changes can help the urgent issues employers face in hiring digital marketers. More than half (57.41 percent) of survey respondents said they struggle with a lack of qualified candidates, while 33.33 percent noted difficulty finding local talent for in-office roles. Additionally, 25.93 percent reported a shortage of skilled employees within their teams to train and onboard new hires.

For digital marketing candidates looking to stand out to employers, Penner suggests focusing on highlighting measurable results on resumes.

“Everyone that applied for a job can say ‘I managed social media’. What about that social media management did you do that was unique, how did you develop the strategy, what did it look like, and what were the results?” he said. “Ultimately, employers want to know if you can take what they give you and help achieve their goals.”

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Feature image courtesy Melanie Deziel via Unsplash / BetaKit.

The post The one role companies are struggling to fill first appeared on BetaKit.

Wealthsimple recently became the latest major Canadian technology company to benefit from a booming global secondary market. Hopper could be the next.

Secondaries have become an increasingly popular means of generating liquidity amid a continually cool exit market. Jefferies Private Capital found global secondary volume hit a record $68 billion in H1 2024. Along with Wealthsimple, Clio and Safe Software have also executed big secondaries this year. Each company has its own motivation, but all are choosing to do so at a time when going public is not a viable option.

Hopper president Dakota Smith recently told BetaKit the company is in no rush to go public. Brightspark partner Sophie Forest, an early Hopper backer and board member, said Hopper has more “secondary potential” the longer it stays private. The Montréal-based online travel platform executed secondaries in 2016 and 2020—the latter with an expectation that it might have gone public by now. But the IPO market has frozen over.

“If the IPO potential doesn’t materialize, then obviously some investors will want liquidity and the secondary market is a logical path,” Forest told BetaKit.

Forest said Hopper is not formally exploring secondaries currently, but the further an exit gets pushed down the road, the more likely it will pull the trigger to keep shareholders appeased. Were Hopper to pursue another deal, Forest suspects its motivation would be similar to Clio: reward employees and early investors.

Hopper’s employees could do with a morale boost: BetaKit staff writer Alex Riehl just covered the company’s second restructuring in just over a year. You can read that and more below.

Josh Scott
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TOP STORIES OF THE WEEK

Canadian lawsuits take on Big Tech

Canadian organizations have decided to take Big Tech to the courtroom, challenging the way Google and OpenAI conduct business in two different lawsuits this week.

Canada’s Competition Bureau is suing Google for what it calls anti-competitive conduct in Canada’s online advertising technology services. As part of the lawsuit, the Bureau is seeking an order that would require Google to cease anti-competitive practices and sell two of its adtech tools.

Meanwhile, Canada’s largest news media companies teamed up to file a lawsuit against OpenAI on Friday, alleging that the company infringed on their copyright to train the model that powers its massively popular chatbot ChatGPT. The lawsuit is potentially seeking statutory damages of $20,000 per allegedly infringed work. According to the filing, the news companies own and have published a combined 10.65 million works since 2015.

Shopify calls on feds to “do whatever is necessary” to resolve Canada Post strike before Black Friday

Shopify released an open letter calling on the federal government to “do whatever is necessary,” including binding arbitration or legislation, to get striking Canada Post workers back to work ahead of the Black Friday/Cyber Monday weekend.

Following publication of the letter, Minister of Labour and Seniors Steve MacKinnon told reporters that sending the Canada Post dispute to binding arbitration “is not in the cards” given the “fundamental” issues on the table.

As Black Friday has come and gone, Canada Post workers remain on strike.

(Read More)

Belgian VC Theodorus relocates to Canada under new name to target early-stage life sciences startups

After four funds over more than 20 years, Belgium’s Theodorus is exiting European investing entirely to pursue North American life sciences companies from its new Montréal headquarters. “

This is the place to be,” Seido co-founder and partner Olivier Belenger told BetaKit in an interview. “This is the place to develop the new vision.”

(Read More)

Firestarter program goes national with funding from BDC Thrive Lab

An Atlantic Canadian pilot program aimed at supporting women and non-binary founders is officially going national thanks to funding from the Business Development Bank of Canada’s Thrive Lab.

The national virtual program will be launching a new cohort in early 2025 that will culminate in a $100,000 pitch competition in Toronto, in time for International Women’s Day.

(Read More)

Charles Mandel always filed on time

Charles Mandel was short and short-tempered. He was quick to file, faster still with a joke or pun, and always looking for an opportunity to lighten the mood.

A senior writer at BetaKit for almost three years, Charles never missed a deadline, even if that meant driving his editors crazy or his story off the beaten path.

Charles passed away one year ago today at the age of 64 after a difficult battle with cancer.

To honour his memory, BetaKit would like to share stories of his work and life.

(Read More)

The painkiller for pharmaceutical reps

It’s a common situation often invisible to patients: a pharmaceutical rep stands with a doctor in the hallway between exam rooms, explaining a new drug or medical device.

The sales rep often has just minutes to accurately distill pages of information, including clinical data, dosing guidelines, regulatory requirements, and patient eligibility.

And according to Parth Khanna, co-founder and CEO of Toronto-based ACTO, there is a lot riding on reps doing this job well.

(Read More)

Workers are embracing AI faster than employers can keep up

There is an urgent need for employers to establish clear policies and training to ensure artificial intelligence is used responsibly and effectively in the workplace, according to new research.

A variety of studies produced in partnership with Future Skills Centre (FSC) have explored the adoption of AI in the Canadian workforce, and point to a growing need for targeted training.

“It’s going to take significantly more investments in skills and business supports to harness the benefits of AI across the Canadian economy,” said Dr. Tricia Williams, Director of Research, Evaluation and Knowledge Mobilization at FSC.

(Read More)

Interest rate cuts haven’t helped Canadian small business—yet

In the first three months of the year, small businesses were doing notably better across three core metrics—sales growth, late payments, and time to be paid. The Bank of Canada had decided to start cutting interest rates in June, and it wasn’t unreasonable to expect a potential boost to consumer spending. Expectations for an economic rebound were growing.

But as we approach the end of the year, the latest data from Xero Small Business Insights shows disappointing metrics for Canada’s small business sector.

Despite the early optimism, Canadian small businesses have yet to feel the lift that they hoped lower inflation and rate cuts would deliver.

(Read More)

BetaKit’s Weekly Roundup

CGY – Dental platform Oraq AI closes $2.6M CAD in seed funding
CGY – Exro Technologies targeted by class-action lawsuit
TOR – FleetOps rebrands to Class8, secures $30.8M CAD Series A
TOR – Boosted.ai raises $20.9M CAD bridge round to grow AI platform
TOR – Practice Better secures $18M CAD debt facility
TOR – Halal FinTech startup Manzil launches wealth management solution
TOR – WonderFi and Kraken surpass $2B CAD in assets under custody
MTL – Hopper lays off approximately 10 percent of staff
MTL – Nurau secures $1.5M CAD seed round for conversation coaching platform

The BetaKit Podcast

Mama don’t take my Google Chrome away

“Browsers aren’t a business. Browsers don’t make money. These are loss leaders for other connected experiences because no one wants to pay for the window to the web.”

The DOJ wants to take Chrome away from Google. Arc wants to build a better browser for everyone. Rob Kenedi wants to decelerate tech with his new show, which is not (yet) a browser. Let’s dig in.

Take The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: Shopify’s federal swing, Hopper trims its wings, and Google gets served.

Take The BetaKit Quiz for Nov. 29, 2024.

Feature image courtesy Hopper.

The post Why Hopper might be the next Canadian tech company to play the secondary game first appeared on BetaKit.

For weeks, The BetaKit Podcast has been crisscrossing the country, podcasting live from Elevate in Toronto, ALL IN in Montréal, SAAS NORTH in Ottawa, and our very own Town Hall in Vancouver. It has been one hell of a roadshow, and we hope you’ve enjoyed our recordings from the field.

But I’d be lying if I didn’t tell you it’s good to be back. All of the stage performances have left little time to talk directly to you, dear listener. It has also left Rob and I little time to talk with each other about the latest tech news or the results of our own stage conversations. So as we downshift into End of The Year mode, for this episode we dabble in a little bit of everything.

“Browsers aren’t a business. Browsers don’t make money. These are loss leaders for other connected experiences because no one wants to pay for the window to the web.”

In an effortless bit of navel-gazing, we react to the reaction of our recent conversation about company failure with ex-Sampler CEO Marie Chevrier Schwartz, recorded live at SAAS NORTH. Failure has not been a common topic of public conversation in Canadian tech, but the tide seems to be turning. Why now? We have a few theories.

Speaking of failure, we pay respects to the short-lived Arc browser before wondering how The Browser Company’s next product might be any different (or any more popular).

It’s an interesting time for The Browser Company to be killing its radical approach to web browsing to build a new, more radical approach to web browsing, given the future of the dominant market leader is very much in question. You see, the United States Department of Justice wants Google to sell the Chrome web browser as a solution to the company’s search monopoly. That the DOJ would target Google’s popular portal to its search tool (and everywhere else on the web) rather than the search tool itself tells you a lot about the state of the internet. 

While a sale would certainly kneecap Google, would it actually change the state of play? How many tech companies not also being sued by the DOJ for antitrust exist as possible buyers? And isn’t AI angling to disrupt both search engines and web browsers anyway?

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

We recorded the podcast a day before Canada’s Competition Bureau decided to follow the lead of our southern neighbours and sue Google as well. Recently on The BetaKit Podcast, ex-Googler Rory Capern speculated that Canada did not have the leverage to effectively regulate Big Tech. Commissioner of Competition Matthew Boswell is about to test that theory.

Perhaps the biggest news we discuss is that longtime brother-in-pod Rob Kenedi has launched a new show called Decelerator. This episode features thoughtful insights from Rob on why a near-quinquagenarian, legacy audio podcaster has suddenly launched a video format show and what it says about the state of media and distribution, product and audience, and ‘how to build things’ as we approach the hump year of this decade. But you can also just watch the first episode and get a feel for it yourself. 

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald. Feature image courtesy Wikimedia Commons.

The post The DOJ wants to take Google Chrome away, Rob Kenedi wants to decelerate tech first appeared on BetaKit.

Last night marked the sixth edition of the Startup Community Awards (SCA) Gala in Montréal—an evening that reflected a turbulent year of change for Québec’s innovation ecosystem.  

Over 400 people attended the gala at Maison Alcan on Nov. 28, organized by MTL NewTech in collaboration with Startupfest. The awards spanned 10 categories, with individuals, initiatives, and organizations recognized for their contributions to Québec’s innovation ecosystem. A jury of 24 stakeholders narrowed down the pool to 80 finalists and over 10,000 people cast their votes to crown the winners.

The awards were handed out alongside Katy Perry and Rick Astley hits as a caricature artist drew the likenesses of award winners. In true Montréal fashion, the emcee conducted a bilingual ceremony, with live translation available.

But the upbeat vibe of the celebration could not totally defeat the subdued mood driven by the tough fundraising environment and recent program suspensions in Québec. This year also marked the official shuttering of Notman House, a longtime event hub for the community. Some BetaKit spoke to referenced a disconnect in attitudes between the entrepreneurs and government or corporate players in attendance.

“We need these celebratory moments. But I just wish that startups were at the centre of it.”

Louis-Félix Binette
MAIN

“We need these celebratory moments,” said Louis-Félix Binette, executive director of Mouvement des accélérateurs d’innovation du Québec (MAIN). “But I just wish that startups were at the centre of it.”   

According to numbers provided by MTL NewTech, more than half of the attendees came from investment, corporate, support organizations, and government. Over 140 entrepreneurs and over 60 professionals, researchers, and aspiring entrepreneurs were in attendance.

Luc Sirois took home the Public Sector Ally of the Year Award for his work as the Chief Innovator of the government organization Conseil de l’innovation du Québec. Sirois also participated in zany antics throughout the evening, including when he “knighted” the executive director of MTL NewTech as Chevalier Ilias Benjelloun. 

RELATED: ‘It’s life or death’: Ecosystem frustrated after IQ suspends early-stage program 

Benjelloun, co-founder and board member of MTL NewTech, pointed out that his team worked to ensure the awards were distributed evenly across categories for individuals, startups, and supporting organizations. 

“I think having corporate sponsors and having government people is important, because whether you like it or not, these things cost money,” Benjelloun said. “You need that money but you also need that connection.”

In an interview with BetaKit, Sirois reflected on some of his highlights of the past year: the launch of Axelys, to accelerate the creation of startups from academic research, and the rebranding of Startup Montréal to Québec Tech, to support international growth for scaleups. 

“To get together and to have new folks come and energize the community, to keep this alive is heartwarming,” Sirois said. “What makes a place successful is its people.” 

Startup of the Year went to Partage Club, a marketplace app for lending items and connecting with neighbours. Co-founder and vice-president (VP) of marketing Anaïs Majidier talked about the company’s focus on reducing overconsumption and creating a more sustainable economy, especially on the eve of Black Friday. 

“We’re so proud to show that it’s possible to reconcile impact and profitability—two ideas often seen as incompatible, but that together, could redefine success,” Majidier told BetaKit. 

Five new categories were introduced this year, including the Tough Love Mentor Award, which highlights a mentor who gives founders invaluable but blunt advice. Accelia Capital investor Isabelle Bettez won that prize. 

Zeffy, a fundraising platform for non-profits, won Born Global Startup of the Year. Highlighting the collaboration among players in the ecosystem, two awards were shared between two recipients. Investor Community Champion of the Year went to both Sylvain Carle, co-founder and director of Canadian Investors / Venture Impact Coalition (CIVIC) and Jennifer McDonald, senior VP of investments at Cycle Momentum.

The ceremony was also peppered with touching moments. Xavier-Henri Hervé, who retired from his post as the executive director of Concordia University’s District 3 Innovation Hub, was honoured for his 10 years leading the centre. The organizers also paid tribute to Abishek Gupta, the founder of the Montreal AI Ethics Institute, who died earlier this year. 

RELATED: Fifth-annual Startup Community Awards celebrates Montréal’s innovation ecosystem

At the end of the Gala, the MTL NewTech team unveiled their upcoming rebrand as ElanTech. Élan means momentum in French. Part of the organization’s new mandate includes expanding its reach as an ecosystem “cultivator” and growing initiatives for startups outside of Montréal. 

The new name is more aligned with what the organization already does, according to general manager Simran Kanda: supporting entrepreneurs in creating momentum from the ideation stage toward a successful future.   

Here’s the full list of winners:

Investor Community Champion of the Year: Jennifer McDonald and Sylvain Carle 

Public Sector Ally of the Year: Luc Sirois 

Tough Love Mentor of the Year: Isabelle Bettez

Newcomer Entrepreneur of the Year: Lamia Guelif 

Ripple Effect Award: Jean-Philippe Sicard and Jiro Kondo 

Born Global Startup Award: Zeffy 

Startup of the Year: Partage Club

Startup Research Impact Award: BRAININNOV in collaboration with Polytechnique Montréal and Centre hospitalier de l’Université de Montréal

Impactful Initiative of the Year: Lab Excelles through BDC Capital’s Thrive Lab 

Startup Program of the Year: Programme de création d’entreprise scientifique et innovante (CESI) by V1 Studio 

Feature image courtesy Eva Blue.

The post Montréal tech marks year’s successes and struggles at sixth Startup Community Awards first appeared on BetaKit.

Feature image courtesy EAPVA, CC BY-SA 4.0 via Wikimedia Commons. Cropped by BetaKit.

The post Shopify’s federal swing, Hopper trims its wings, Google gets served first appeared on BetaKit.

Calgary-based electric vehicle (EV) tech firm Exro Technologies is the target of a potential class-action lawsuit from a group of shareholders alleging the company misrepresented revenue projections related to its acquisition of SEA Electric earlier this year.  

On Nov. 27, 2024, Ontario resident Allan Crosier filed a statement of claim in the Court of the King’s Bench of Alberta on behalf of investors who purchased Exro securities between Jan. 30 and Nov. 30, 2024.

After projecting $200 million in 2024 revenue in January, Exro posted a $225-million CAD net loss in Q3 2024.

The lawsuit lists Exro, along with its CEO Sue Ozdemir and chairman Rodney Copes, as defendants. The defendants also includes the underwriters of the $55 million in financings Exro raised this year: Canaccord Genuity Corp., Eight Capital, National Bank Financial Inc., ATB Securities Inc., Stifel Nicolaus Canada Inc., Roth Canada Inc., and AGP Canada Investments ULC.

When Exro announced the $332-million CAD merger with SEA Electric in January, it claimed the combined company would have a “strong order book” and generate over $200 million CAD in revenue for the year. The plaintiff said there was “no justification for the representations” provided at the time.

The plaintiff alleged that the defendants “knew or ought to have known that the merger agreement would not enhance the results of Exro Technologies’ operations to achieve over $200 million of revenue in 2024.” 

According to the statement of claim, earlier this month, Exro revised its 2024 revenue projection to $28 million—just 14 percent of its original forecast in January. BetaKit has not corroborated this claim and asked Exro for clarification.

“The defendants’ representation that Exro Technologies would achieve a revenue of over $200 million in 2024 was delusional,” the statement of claim reads.

The plaintiff also alleged that these forecasts were made to justify two public offerings of its securities this year, which allowed Exro to raise $55 million. 

The plaintiffs’ allegations have not been proven in court.

RELATED: Major Canadian news orgs sue OpenAI for copyright infringement

On Nov. 27, Exro released a statement noting it disputes the allegations and “intends to defend the claim vigorously.” The company did not respond to BetaKit’s request for comment before press time.

Founded in 2014, Exro has developed an adaptive EV traction inverter that prioritizes power and torque at different speeds. The company, which trades on the Toronto Stock Exchange (TSX) under the ticker EXRO. 

When announcing its merger with SEA Electric, Exro claimed that the combined company would provide it with “a defined path to profitability” within 12 months of closing the transaction.

However, filings obtained by BetaKit indicate the company experienced a $225.95-million CAD net loss for the three months ending on Sept. 30, 2024, which included $211-million CAD “impairment expense.” It attributed the loss to slower-than-expected EV market adoption, a reassessment of SEA Electric’s assets, and high operating costs. The firm recorded roughly $16 million CAD in revenue in the first nine months of the year.

At press time, Exro’s stock traded at 16 cents per share on the TSX, down almost 90 percent from its 2024 peak of $1.33 CAD in January.

Feature image courtesy Exro via LinkedIn.

The post Shareholders file proposed class action alleging Exro misrepresented revenue projections first appeared on BetaKit.

Canada’s largest news media companies have teamed up to file a lawsuit against OpenAI, alleging that the San Francisco-based artificial intelligence (AI) company infringed on their copyright to train the model that powers its massively popular chat bot ChatGPT. 

The plaintiffs include Torstar, Postmedia, The Globe and Mail, The Canadian Press, and CBC/Radio-Canada. Combined, they own hundreds of local and national news outlets across Canada. 

Claim seeks to address the “inappropriate and illegal use” of Canadian content.

The lawsuit, which was filed in Ontario’s Superior Court of Justice on Friday morning, is seeking damages, the profits that OpenAI has made from the alleged infringement, and an injunction to prevent future use of their work by OpenAI. This could potentially include statutory damages of $20,000 per allegedly infringed work, or an amount that the court deems fair. According to the lawsuit, the news companies own and have published a combined 10.65 million works since 2015. 

“Rather than seek to obtain the information legally, OpenAI has elected to brazenly misappropriate the News Media Companies’ valuable intellectual property and convert it for its own uses, including commercial uses, without consent or consideration,” the lawsuit filing reads. 

BetaKit has reached out to OpenAI for comment, but did not hear back by publication time. The allegations have not yet been proven in court. OpenAI has 40 days to file its statement of defence. 

The claim seeks to address the “inappropriate and illegal use” of Canadian content, and enforce Canadian laws, Postmedia said in a statement. 

RELATED: Online legal database CanLII sues Caseway AI for copyright infringement

“OpenAI regularly breaches copyright and online terms of use by scraping large swaths of content from Canadian media to help develop its products, such as ChatGPT,” the statement reads. “OpenAI is capitalizing and profiting from the use of this content, without getting permission or compensating content owners.” 

“Journalism is in the public interest,” the statement continues. “OpenAI using other companies’ journalism for their own commercial gain is not. It’s illegal.” 

AI giants like OpenAI have been dealing with numerous lawsuits relating to data scraping and AI training practices. OpenAI is currently in the midst of a legal battle with The New York Times, which is raising similar issues as the Canadian news publications. Last week, TechCrunch reported that OpenAI accidentally deleted potential evidence in that case while making a configuration change to the dataset under investigation. 

In a similar intellectual-property spat earlier this month, The Canadian Legal Information Institute (CanLII) filed a lawsuit against AI startup Caseway, alleging Caseway violated its terms of use and infringed copyright by scraping 3.5 million records from CanLII’s database.

Feature image courtesy OpenAI.

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An Atlantic Canadian pilot program aimed at supporting women and non-binary founders is officially going national thanks to funding from the Business Development Bank of Canada’s (BDC) Thrive Lab.

Firestarter, created by angel investment network The Firehood, offers founders networking, resources, and mentorship to support their ventures’ success as they scale. The national virtual program, which intentionally spells its name fully in lowercase in recognition of the lack of funding for women entrepreneurs, will be launching a new cohort in early 2025 that will culminate in a $100,000 pitch competition in Toronto, in time for International Women’s Day.

Danielle Brewin Graham, co-founder of The Firehood, declined to disclose how much funding BDC is providing, but told BetaKit the Crown corporation’s venture lab will also be providing mentorship and resources to impact-focused, women-led businesses through the program. Firestarter will include a specialized track through which BDC will provide advice and education on dilutive and non-dilutive funding.

The Firehood is one of 25 partners that can make referrals to BDC Thrive Lab once it invests, which means founders may eventually become eligible for funding from the lab, if they win Firestarter’s pitch competition, Graham noted.

Discussing BDC’s role in supporting the program, Graham said, “It means that we can give those founders clarity on what they need, and we can actually pull in even more resources and mentorship and connections. It just fuels a lot more of the fire so that the founders can access that support.”

RELATED: BDC earmarks $250 million CAD to support underserved entrepreneurs

BDC Thrive Lab is not the only partner on Firestarter. Others include Firehood co-founder Claudette McGowan’s company Protexxa, which will run a cybersecurity stream; Deloitte, which will provide dedicated leadership expertise to startups; and Export Development Canada, which will provide guidance on trade, partnerships, and market entry strategies to founders looking to go international. Coach ZJ Hadley will also offer a strategic leadership workshop to teach participants about decision-making, team trust, crisis navigation, and executive presence.

“These focus streams are really what will ensure that not only our portfolio companies, but future companies that are pitching, [get] some of that targeted expertise and support from our network,” Graham told BetaKit.

In a statement, Thrive Lab managing director Sévrine Labelle said sponsoring Firestarter will allow the lab to amplify its impact as it looks to increase access to capital and accelerate the advancement of women entrepreneurs.

Firestarter was initially piloted over the summer in Atlantic Canada with the Pond-Deshpande Centre and Women and Nonbinary Impact Network for Venture Capital. Through that pilot, founders received support and mentorship from entrepreneurs, as well as a chance to pitch at Elevate Festival this year.

RELATED: Women VCs are now earning more at the highest levels (if they can reach them)

One of the startups that participated was Saint John, NB-based MedReddie, which offers an artificial intelligence (AI)-enabled platform designed to streamline the medical technology evaluation and purchasing process. In July, the startup announced $782,000 CAD in pre-seed funding, some of which included funding from The Firehood as part of MedReddie’s winnings at Elevate Festival in 2023.

“The Firestarter program was instrumental in MedReddie’s growth, providing expert mentorship, resources, strategic advisory, and access to key industry partnerships,” Kara LeBlanc, founder and CEO of MedReddie, said in a statement. “This enabled the rapid scaling of our AI-powered healthcare supply chain platform and supported our mission in driving meaningful change within the global healthcare industry.” 

The Firehood was founded in 2021 to address the barriers faced by women in Canada’s tech industry. Specifically, the organization looks to provide founders access to networks, training leadership opportunities, and capital.

Graham said Firestarter’s upcoming cohort aims to include 30 women-led companies, adding she thinks the program could run up to twice annually. The program is currently accepting applications. 

With files from Josh Scott.

Feature image courtesy The Firehood.

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Canada’s Competition Bureau is suing Google for what it calls anti-competitive conduct in Canada’s online advertising technology services. 

In a statement, the Bureau said it found Google had unlawfully tied its adtech tools together to maintain its market dominance and leveraged its position across these adtech tools to “distort auction dynamics.” The Bureau says Google owns four of the largest online advertising technology services used in Canada: DoubleClick for Publishers, AdX, Display & Video 360, and Google Ads.

“The Bureau’s position is that Google’s near-total control of the ad tech stack is by design,” the statement reads. “Through a series of related and interdependent actions, Google has, in our view, unlawfully tied together its various ad tech products, impeded rivals’ ability to compete and restrained innovative technologies that could threaten their market power.”

The Bureau alleges that Google gave its own tools preferential access to ad inventory, took negative margins in certain circumstances to disadvantage rivals, and dictated the terms on which its own publisher customers could transact with rival adtech tools.

The Bureau said this conduct allowed Google to entrench its dominance, prevent rivals from competing, inhibit innovation, inflate advertising costs, and reduce publishers’ revenues. According to the Bureau, Google holds an estimated market share of 90 percent in publisher ad servers, 70 percent in advertiser networks, 60 percent in demand-side platforms, and 50 percent in ad exchanges.

As part of the lawsuit, the Bureau is seeking an order that would require Google to cease anti-competitive practices and sell two of its adtech tools: its publisher ad server, DFP, and its ad exchange, AdX. The Bureau is also seeking an administrative monetary penalty “equal to three times the value of the benefit derived” from the alleged anti-competitive practices, or, alternatively, three percent of its worldwide gross revenues. 

“Google’s conduct has prevented rivals from being able to compete on the merits of what they have to offer, to the detriment of Canadian advertisers, publishers and consumers,” Competition Bureau Commissioner Matthew Boswell said in a statement. “We are taking our case to the [Competition] Tribunal to stop this conduct and its harmful effects in Canada.”

Under the Competition Tribunal’s rules, Google has approximately 45 days to file a response, and then the Bureau has 14 days to reply to that response.

In an email statement to BetaKit, Google vice president of global ads Dan Taylor said the company’s advertising technology tools help websites and apps fund their content, and enables businesses of all sizes to effectively reach new customers. 

“Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector,” Taylor said. “The CCB’s complaint ignores the intense competition where ad buyers and sellers have plenty of choice and we look forward to making our case in court.” 

RELATED: Does Canada have the leverage to regulate Big Tech?

The Bureau’s lawsuit highlights how Google’s dominance in the digital advertising ecosystem has limited innovation across the industry, Rajiv Khaneja, founder and CEO of Victoria-based adtech platform AdButler, said in an email statement to BetaKit. He added that it has been a “constant challenge of innovating in a market constrained by unfair practices,” saying Google has created a system that favours its own products while making it difficult for others to compete through its control of publisher ad servers, ad exchanges, and advertiser tools.

“This case is an opportunity to unlock the potential of the adtech industry by removing barriers that hold back innovation,” Khaneja said. “A fair and open marketplace is essential to fostering the kind of advancements that benefit publishers, advertisers, and consumers alike.”

Canada’s action adds to a chorus of international regulators targeting the internet giant with anti-trust lawsuits and anti-competitive allegations. Most notably, a United States federal judge ruled in favour of a Department of Justice (DOJ) case in August, dubbing Google a “monopolist” in the search and advertising markets. The DOJ has advocated in recent weeks for the forced sale of Chrome, Google’s pervasive browser, and to make ad performance data more transparent. Earlier this week, the DOJ and Google performed closing arguments for a second antitrust case pertaining to Google’s adtech markets, which closely mirrors the focus of Canada’s Competition Bureau. 

“While the full implications of this case are yet to unfold, it signals that Canada is actively utilizing its legal frameworks to address potential challenges that dominant foreign technology companies pose,” Council of Canadian Innovators president Ben Bergen noted on LinkedIn. “What might seem like a proactive stance highlights Canada’s renewed focus on enforcing competition laws, crucial for fostering a fair and competitive marketplace.”

On a recent episode of The BetaKit Podcast last month, Rory Capern, the former head of partnerships at Google Canada, said Canada didn’t have the leverage to regulate Big Tech in the same way as the United States. It appears as though Canada’s Competition Bureau is about to test that theory.

UPDATE (11/29/2024): This story has been updated with commentary from AdButler founder and CEO Rajiv Khaneja.

Feature image courtesy Pawel Czerwinski via Unsplash.

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Toronto-based trucking data startup FleetOps has rebranded to Class8 and secured a $30.8-million CAD ($22 million USD) Series A round. 

The all-equity round predominantly featured US investors, led by Xplorer Capital with participation from Commerce Ventures alongside return investors Inspired Capital and Resolute Ventures. The round also featured a follow-on investment from Canadian firms BCF Ventures and Panache Ventures, which both invested in Class8’s seed round, to protect their pro rata rights.

Company says it currently processes data from 227,000 trucks.

Class8 CEO Chris Atkinson told BetaKit in an email statement that the number of American investors wasn’t indicative of raising capital in Canada.

“We just aligned better with American investors during this fundraise,” Atkinson said. “We have no bias to the US, and will seek more Canadian investors in the future.”

Founded in 2017 by Atkinson, Class8 is a freight marketplace that matches truck drivers with shipment opportunities using vehicle data and artificial intelligence (AI). Class8’s platform provides transport trucking companies with tracking, vehicle inspection reporting, fuel profitability calculations, and automated scheduling for its drivers. Atkinson told BetaKit that the new funding will be sued for the expansion of its product.

Class8 says it uses the electronic logging devices (ELDs) integrated into transport trucks by original equipment manufacturers (OEMs), meaning truckers don’t have to install any extra hardware to use its platform. The company says it currently processes data from 227,000 trucks, and has raised approximately $40 million CAD to date.

Toronto-based Terminal is another Canadian company offering a monitoring solution to trucking fleet managers. A Y Combinator graduate, the startup closed a $3.1-million USD ($4.2 million CAD) seed round last December to expand its team. Terminal offers its own API, which allows insurance products and fleet software access to GPS data, speeding data, and other digitized vehicle stats collected through ELDs.

Class8 claims it sets itself apart from other tracking or management providers by using the data to benefit carriers with features such as automated load planning and real-time pricing. 

Class8 previously raised a $6-million seed round in 2020, which was co-led by Inspired Capital and Resolute Ventures, and included participation from Canadian investors BCF Ventures and Panache Ventures. BCF Ventures CEO and partner Sergio Escobar told BetaKit that his firm participated in Class8’s Series A round as a follow-on, pro-rata reinvestment.  

UPDATE (12/2/2024): This article has been updated with information and comment from Class8 CEO Chris Atkinson.

Feature image by Marcin Jozwiak on Unsplash.

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BetaKit is proud to present Changemakers, an AWS Startups series spotlighting Canadian tech companies solving complex global challenges. Read part two here.

It’s a common situation that’s often invisible to patients: a pharmaceutical rep stands with a doctor in the hallway between exam rooms, explaining a new drug or medical device. 

The sales rep often has just minutes to accurately distill pages of information, including clinical data, dosing guidelines, regulatory requirements, and patient eligibility.

And according to Parth Khanna, co-founder and CEO of Toronto-based ACTO, there is a lot riding on reps doing this job well.

“If you’re a cloud platform and you want to scale a software solution to the world, then AWS is the right partner.”

Kumar Erramilli, ACTO

“Imagine you’re a patient with a rare disease, and a new treatment for it has just been approved by the FDA, but your physician doesn’t know it exists,” Khanna said.

ACTO describes its platform as a painkiller for this problem. The scaleup has developed a software platform that equips pharmaceutical reps with the tools they need when they are out in the field to speak competently and confidently to doctors about new treatments, when it matters most.

The platform combines access to approved content, coaching support, AI assistants, and training tools for field reps, as well as real-time data and advanced analytics that track rep interactions and generate commercial insights for company leaders about what’s working and where reps can improve.

“We set out to build an intelligent field excellence platform that has brought almost a dozen different solutions and capabilities into one application,” Khanna explained.

And as ACTO expands internationally to meet the global demand of the life sciences industry, the platform must also address strict rules on data security and patient privacy, which can vary in each regulatory market.

The missing link

ACTO is focused on transforming how vital drug information reaches healthcare providers, but it wasn’t always that way. 

Founded in 2014, ACTO started as a platform to help professionals across various industries apply knowledge in their daily work. By 2016, it was clear where the platform could make the most impact: life sciences.

Khanna said pharma companies spend billions of dollars and take up to 14 years of research and development to bring a single life-saving treatment to market. This effort has largely directed investment and technology toward the early stages of the drug development lifecycle to try and get these new treatments to patients waiting in need.

“Imagine what happens when you have this massive pipeline, and one of those products actually gets approved,” he added. “How do these products get communicated to the market? How does the healthcare provider know about the new treatment option? If a tree falls in a forest and no one hears about it, did it actually fall?”

Peace of mind

Today, ACTO’s platform is available to reps in more than 90 countries, but with each new region comes a new set of regulatory challenges, according to co-founder and CTO Kumar Erramilli. In Europe, for example, data laws like the General Data Protection Regulation (GDPR) strictly require that client data remains within the country of origin. 

Staying compliant with regulations like the GDPR meant that simply adding more servers was not an option. ACTO needed to focus on building a secure, flexible infrastructure that could quickly adjust to local compliance standards. So, the scaleup started building with cloud provider AWS.

“AWS is the pinnacle of enterprise SaaS architecture,” Erramilli said. “If you’re a cloud platform and you want to scale a software solution to the world, then AWS is the right partner.”

Erramilli said AWS’s relational database service and its Aurora database allow ACTO to keep data local while automating essential tasks. “How we do our backups, how we do failover scenarios, how we do disaster recovery—AWS has global enterprise standards around that, and they’ve done this thousands of times around,” he added.

AWS’s infrastructure also includes compliance with certifications like SOC 2 Type II, which ensures all platform data is handled with strict safeguards. “When auditors are auditing your security infrastructure, they hear that everything is on AWS and almost have immediate peace of mind,” Erramilli added.

Growing in a walled garden

As ACTO’s platform has expanded, the team noticed a new challenge: field reps need quick, compliant answers on the go. This realization led to the creation of LAICA, ACTO’s conversational generative AI knowledge assistant launched in October.

LAICA gives field reps clear, medical, legal and regulatory-approved answers to questions about disease states, product details, clinical evidence, market access, and competition—all in real time. Erramilli explained that ACTO uses Amazon Bedrock to securely use Anthropic’s AI models without data ever leaving AWS’s infrastructure.

Using these models, LAICA can instantly support reps with precise answers within a ‘walled garden,’ or a closed ecosystem. “For pharmaceutical companies, ensuring that the content from which answers are generated for reps are the most recent and company-approved versions was critical. The closed ecosystem gives them this control. It also means if a security breach happens on a third-party server, like a GPT server, we’re not affected because our data is entirely within our secure environment,” Erramilli said.

Khanna said ACTO’s focus remains on becoming the top choice for specialty pharma companies aiming to improve interactions between reps and healthcare providers. With LAICA now launched, the scaleup is steadily expanding its AI-enabled offerings, and aims to create an ecosystem that integrates content, models, and data.

While heavily regulated industries like life sciences can be slow and cautious about new tech, Khanna said ACTO wants to make AI feel less daunting. “Yes, it’s a new horizon, but by working with partners that understand your industry really well, it doesn’t have to be that scary,” he added.

He sees AWS as a practical foundation that allows ACTO to focus on secure and compliant solutions that help reps maximize the positive impact of new treatments. “AWS gives us a very strong base to build from,” Khanna said.

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Feature Image courtesy BetaKit / ACTO.

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Charles Mandel was short and short-tempered. 

He was quick to file, faster still with a joke or pun, and always looking for an opportunity to lighten the mood.

Charles was cordial to communications professionals and direct with his interview subjects. A senior writer at BetaKit for almost three years, Charles never missed a deadline, even if that meant driving his editors crazy or his story off the beaten path.

Charles passed away one year ago today at the age of 64 after a difficult battle with cancer. To honour his memory, BetaKit would like to share stories of his work and life.

An avid outdoorsman, mountain biker, and marathon runner, Charles lived off the grid in Nova Scotia. He documented his frontier lifestyle on his Substack, Tales from Beyond the Grid. Spotty internet aside, the remote locale did not often impact his work, but did provide colleagues with regular guest appearances on team calls from the various dogs, horses, donkeys, and other assorted animals that found a home on his acreages. 

Born to a family of poets, Charles’ career in journalism spanned five decades and crisscrossed the country, from Edmonton to Vancouver to Toronto and many parts of the Maritimes. Over this period, Charles pursued an astonishing variety of roles and news beats: visual arts columnist, news and features editor, literary correspondent, national news correspondent, music journalist, climate reporter, and business tech reporter.

His bylines graced over 60 publications, far too many to list in full. To highlight a few: Wired, Canadian Business, the National Post, The Globe and Mail, Maclean’s, Canadian Geographic, Quill & Quire, The Toronto Star, and several community papers and alt-weeklies.

Charles was also the recipient of multiple awards and honours, including a National Magazine Award, a Kenneth R. Wilson Memorial Award, and two (Prince Edward) Island Literary Awards. His work was instrumental in helping BetaKit win a SABEW Canada Best in Business award for General Excellence, which we dedicated to his memory.

Charles joined BetaKit in August 2021 as deputy editor before settling comfortably into the position of senior writer. In over 500 files for the publication, his work ran the gamut from hard news (including quarterly earnings reports, which he hated), policy-driven features (which he doggedly pursued) and fun profiles of interesting characters (which he loved more than anything). 

Charles Mandel’s Best at BetaKit:

Pow! Bam! Biff! Special effects studio Monsters Aliens Robots Zombies raises $6.5 million
It’s not all fun and games, and superheroes.

Canadian innovators wonder what proposed SR&ED review will accomplish
Shortly after the feds announced a review of the SR&ED program, the first subtweet blared out.

Ottawa entrepreneur Brad Rollo remembered for his passion and enthusiasm
“This is not just a loss for the Ottawa tech sector; it’s a loss for Canada.”

Five months in, details on Canada’s new Innovation and Investment Agency remain sparse
What’s the feds’ plan? Only Dan Breznitz seems to know.

Raw Signal Group’s new book extracts leadership lessons from the pandemic
Unmanageable introduces the new rules of work, and offers a practical and essential guide to what comes next.

Charles was passionate about enterprise reporting, holding those in power to account, and shepherding a new generation of journalists. Mentor to a newsroom filled with young reporters, he was quick to offer public praise and thoughtful in his private critiques. The team marvelled at his encyclopedic knowledge of Canadian history (including CanRock, the only true music) and ability to pull at story threads to reveal connections or details others overlooked.

A terrible singer by all accounts, Charles nonetheless led the team in offkey renditions of Happy Birthday at every possible opportunity—and rarely, actual birthdays. Marking milestones through song has now become a BetaKit tradition.

In the words of his colleagues, Charles was filled with passion, fire, and talent. He was no-nonsense and prone to laughter. Crotchety and punctual. The pun master. A reminder that the shared love of good stories and great people is enough to make genuine connections. A hard-working, stubborn badass.

We all wish there was more time to know him better, but cherished the time we had.

Charles worked at BetaKit well into the depths of his illness, and did so without complaint or impact on the quality of his work. He wouldn’t listen to anyone who told him he should stop. Over his long career, Charles had seen too many Canadian publications shutter, too many peers packaged out of the industry to easily give up his life’s calling. Committed to the craft of journalism, he fought and reported and wrote to the very end.

You can come to know a writer through their words, so I will give the final word to Charles with an excerpt from one of his musings off the grid. Written shortly before his passing, I can think of no better example of his character.

Obviously, this is a lot less than ideal. But what can I do but forge ahead? Carpe diem! Such as it is. I need to keep my sunny-side up. It helps that I have a strong partner, but it gives me pause to think what a spot we might find ourselves in if something else should happen. It helps that I have kind friends, but you can only ask so much of them.

Sell the place? Unimaginable!

We have become so used to the beauty and solitude of the place, the bird calls ringing out in the morning and at dusk. The coyote’s mournful howls, and the scornful chatter of the squirrels. The fog burning off in the morning.

I fight back. I have good doctors who help direct me to the best options available. I believe that I still have one year, two years, five, 10 left. When I begin to slide I hold that like a shiny promise in the front of my mind. I am not going anywhere. Trees rustle in the wind. The bird sings. The sun shines.

And the brook runs. And it runs. And runs.

The post Charles Mandel always filed on time first appeared on BetaKit.

Montréal-based travel booking company Hopper has reportedly made another round of staff cuts in response to the renewal of its once-broken relationship with travel platform Expedia. 

Hopper’s B2B offering now makes up two-thirds of its revenue. 

According to Skift, the layoffs affected about 10 percent of its workforce, or 60 to 65 employees; 20 of whom were part of Hopper’s direct hotel team. When reached by BetaKit, a Hopper spokesperson confirmed there were layoffs but declined to disclose any specific details. 

“In early November, we announced changes to our organizational structure to better align with our strategic goals and initiatives for the year ahead,” the spokesperson told BetaKit in an email statement. “As part of this restructuring, we made the difficult decision to eliminate certain roles. This restructuring will enable us to focus on investing in key growth areas critical to the company’s long-term success.”

Hopper president Dakota Smith told BetaKit in an August interview that the company had about 720 employees, excluding customer service roles, and that approximately 200 were part of its direct hotel team. Factoring in the reported number of layoffs, Hopper now has approximately 660 employees. 

Hopper has had to lean on its direct hotel team since Expedia declared it would no longer provide hotel inventory to the travel app in July 2023. An Expedia spokesperson said at the time that Hopper’s features “exploit consumer anxiety and confuse customers, leading them to purchase services they neither need nor fully understand.” Since Expedia’s new leadership team decided to rekindle the partnership with Hopper this month, Skift reported that Hopper is now less reliant on its direct hotel team. 

RELATED: Hopper continues embedded FinTech push with Air Canada partnership

The latest round of cuts comes just over a year after an even larger restructuring that saw Hopper cut 30 percent of its workforce, or 250 employees, in October 2023. As first reported by The Globe and Mail, Hopper confirmed to BetaKit that the layoffs were part of an effort to reach profitability, and the company was cutting teams on experimental products as its business-to-business (B2B) offerings “accelerated rapidly.” 

Hopper, which started as a consumer-facing travel booking app, has struck partnerships to integrate its travel and embedded FinTech offerings with firms such as Capital One, Air Canada, NuBank, and Uber. Smith told BetaKit in August that Hopper’s push into B2B came with some growing pains, but has gone better than expected and is part of its push to profitable growth, now making up two-thirds of the company’s revenue. 

“I would say the [October 2023 layoffs] was two parts: to improve profitability, but also the main push to repoint the company’s workforce towards B2B,” Smith said.

Smith added that Hopper isn’t looking to list on the public markets, nor is it looking for outside funding, as it focuses on finding the model that best helps it achieve its goals of profitability within two years and reaching $1 billion in revenue. 

“We’re actually very lucky that we were not a public company, because there’s not a lot of tolerance from analysts for public companies to shift their business models that hard,” Smith said. “That’s one of the benefits you get from being private, is that you have time to figure out [your business model].”

In a September interview with BetaKit, Brightspark Ventures managing partner and Hopper board member Sophie Forest said that the company will tackle an initial public offering (IPO) when it makes sense, but there’s no urgency to do so. 

“[Hopper] could have done an IPO three years ago, because they were bigger than some of the IPOs in Canada, but they always focused on being successful,” Forest said. “They want to wait for the right time to do it and the right reason.”

With files from Josh Scott. 

Feature image courtesy Hopper.

The post Hopper restructures again following renewal of Expedia partnership first appeared on BetaKit.

Most Canadian and US workers want to have difficult conversations with their managers, but trust in leadership affects how comfortable employees feel broaching tough topics. Montréal-based artificial intelligence (AI) software company Nurau has secured a $1.5-million CAD seed round to help managers navigate sensitive discussions through its conversational coaching platform. 

The all-equity financing, which was secured in October, was led by provincial investor Investissement Québec, who contributed $750,000. Angel investor Sylvain Authier and ACET Capital, the venture capital (VC) arm of National Bank, also participated in the round. The company hopes to increase the total funding of the round to $2.2 million within the next six months.

“We are not aiming to replace HR but rather to augment them.”

Justin Lessard-Wajcer
Nurau CEO

Nurau has developed eCoach, a natural-language-processing AI tool, to support HR workers when dealing with sensitive workplace situations. The platform offers step-by-step guidance on difficult conversations by providing managers with phrases to use and predictions of potential employee responses. The company claims the tech can help managers avoid escalations and reduce costs by limiting turnover. 

“Our goal is to improve employee engagement and employee experience at scale in industries with high turnover,” CEO and co-founder Justin Lessard-Wajcer said. 

Nurau was co-founded by Lessard-Wajcer, CTO Sonia Israel, and COO Saba Saremi. The team raised a smaller friends-and-family financing round in 2022 with participation from angel investors Carlos Idarraga, Sylvain Authier, Holden Wajcer, and SecureDev Consultants Inc. The new financing brings Nurau’s total funds raised to date to $2 million CAD. 

The latest funding will allow Nurau to expand into the US market and improve sales development while attracting more retail and manufacturing customers.

Nurau’s revenue model currently includes an annual subscription fee to companies priced per user. However, the company said it will explore set pricing per company in the future as it looks to expand the use of eCoach to all employees, not just managers and HR departments. 

Not an HR replacement

Nurau’s eCoach aims to avoid situations when a workplace incident is escalated to HR because the manager responsible can’t solve it. 

Through its conversational coaching tool, eCoach supports the manager in ensuring the situation never makes it to that point, Lessard-Wajcer told BetaKit. 

For Nurau, fewer escalations are a positive indicator of better employee experience and more effective management, thus limiting costly turnover rates. 

The tech is not meant to automate a company’s HR department, however. Lessard-Wajcer said that its solution is “complementary” to human-driven HR solutions, but offers some attributes that humans cannot emulate: impartiality, constant availability, and consistency with a company’s internal policies. 

“We are not aiming to replace HR but rather to augment them by allowing them to focus on high-risk cases and strategic initiatives,” Lessard-Wajcer said. 

The Nurau president also warned that eCoach is not meant to act as a substitute for professional mental health support or handle emergencies directly, especially in high-risk cases. 

RELATED: Hypercontext completes HR pivot with new AI-powered performance management tool

The company claims it also incorporates certain guardrails in its generative AI models, including safety filters to exclude harmful content, flagging emergency risks to appropriate resources either within or outside of the company, and guided advice that “avoids discriminatory or harmful suggestions.” 

“It is ultimately the manager’s responsibility to apply their common sense and judgment, as they are the ones directly interfacing with the situation,” Lessard-Wajcer said. 

Nurau claims that eCoach saves managers an average of four hours per week related to dealing with employee conflicts, according to data from some of its retail clients already using the platform. Clients listed on Nurau’s website include Canadian retailers Ardene and Bikini Village, as well as the Royal Bank of Canada. 

Sensitive conversations, sensitive data

When it comes to HR conversations with personal information about employees, data security and privacy are paramount. Data breaches have grown increasingly frequent in Canadian corporate environments, according to a 2023 IBM study, incurring an average cost of nearly $7 million per cybersecurity incident.

Meanwhile, nearly a quarter of Canadian employees using generative AI tools in 2023 inserted company information in chatbot prompts, according to a KPMG study. Ten percent of respondents said they inputted private financial information. 

According to Lessard-Wajcer, all information shared within the eCoach platform is “anonymized and securely processed.” These anonymized insights, however, are compiled and used to improve the software. 

The feature fits into a larger trend of Canadian workplace management companies collecting data about employees: Montréal-based GPHY uses a mix of hardware and software tools to aggregate anonymous data about office space usage. 

RELATED: Montréal-based Trustii raises $2.8 million CAD to boost employee risk management software

Integrating AI into HR tools is an expanding space, as well. For instance, Toronto-based Hypercontext is using AI to streamline the employee performance review process, while Montréal-based Trustii is automating its risk management platform.

Nurau creates an AI model for every client company based on their internal policies and procedures, so the model is personalized to align with a company’s HR practices. Hypercontext’s AI tools follow a similar setup to avoid hallucinations, which is when a large-language model (LLM) generates inaccurate content not found in its training data. 

“Without giving [away] our secret sauce, we use science-backed data,” Lessard-Wajcer said. When asked further about the kind of data eCoach’s AI model is trained on, the company said it uses trusted sources such as “scientific papers and leadership coaching content.” 

Feature image courtesy Nurau. 

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There is an urgent need for employers to establish clear policies and training to ensure artificial intelligence (AI) is used responsibly and effectively in the workplace, according to new research. 

A variety of studies produced in partnership with Future Skills Centre (FSC) have explored the adoption of AI in the Canadian workforce, and point to a growing need for targeted training.

“No job in Canada is going to be untouched by AI.”

Dr. Arif Jetha, Institute for Work & Health

Survey results from a report published by the Diversity Institute, the Environics Institute for Survey Research and FSC showed that many workers are taking it upon themselves to learn AI tools.

Nearly half (44 percent) of those using AI at work reported no formal training from employers.

This could mean that employers are missing out on cultivating the initiative shown by employees as well as the opportunity to mitigate risks, such as bias, negative perceptions of AI, and potential intellectual property and security concerns. 

Coupled with research that shows that only six percent of Canadian companies plan to adopt AI in the coming year, experts are warning that Canada could fall even further behind the adoption rates in other countries. 

“Despite Canada’s early lead in the AI sector, we continue to see lagging adoption, which will dampen our ability to make up any grounds on productivity in the coming years,” warned Dr. Tricia Williams, Director of Research, Evaluation and Knowledge Mobilization at FSC. 

Since 2019, FSC has invested more than $250 million in research and innovation initiatives to ensure both workers and employers can adapt to the times and embrace emerging opportunities.

“It’s going to take significantly more investments in skills and business supports to harness the benefits of AI across the Canadian economy,” Dr. Williams observed.

In October, the Vector Institute released “Artificial Intelligence Talent in Canada,” a report prepared by the Conference Board of Canada in partnership with FSC, aimed at better understanding the challenges of upskilling an AI workforce.

The report reveals a 37 percent increase in demand for core AI skills from 2018 to 2023, driven by rising needs in knowledge areas like machine learning and deep learning, as well as AI ethics and governance.

Another report published by the Institute for Work & Health, The Dais, and FSC, demonstrated that more than 1.9 million Canadian workers are employed in jobs with high exposure to machine learning, and emphasized the need for more training as these roles evolve.

“No job in Canada is going to be untouched by AI,” said Dr. Arif Jetha, Associate Scientific Director at the Institute for Work & Health.

As AI and other emerging technologies become increasingly integrated into the workplace, employers need to prioritize both their own education and the training of their employees, the research has found.

Rushmi Hasham, Director of Strategic Partnerships at the Rogers Cybersecure Catalyst, works closely with employers to develop technology implementation and training programs with a focus on cybersecurity. 

“Companies know that they can bring in great entry-level talent,” she said. “But they want to groom the individuals, they want to help inform them, and help them to be promoted, and deepen their understanding as a part of a lifecycle of employment.” 

With this need in mind, the Rogers Cybersecure Catalyst was established in 2018, emerging from research showing a skills gap in cybersecurity and 3.5 million unfilled jobs globally. The organization offers programs and certifications for individuals, corporations, and entrepreneurs looking to upskill in cybersecurity. 

By proactively adopting emerging technologies, companies can improve productivity, foster equity, and reduce risks. Employers who invest in proper training will not only stay competitive but also create more inclusive, resilient workplaces for both the organization and its employees. 

The absence of proper training also raises the concern that more workers will use the tool without guidance or appropriate guardrails.

Dr. Wendy Cukier, Founder and Director of the Diversity Institute and Academic Research Director of FSC, said this must change to increase Canadian productivity and technology leadership.

“The fact is, small businesses are the foundation of our economy and Canada’s strategy must include measures to promote responsible adoption of AI, particularly for small and medium-sized enterprises, which often lack the resources, skills and supports essential to drive transformation,” she said.

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Images licenced by FSC and provided to BetaKit.

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After four funds over more than 20 years, Belgium’s Theodorus is exiting European investing entirely to pursue North American life sciences companies from its new Montréal headquarters. Under the name Seido Capital, the venture capital (VC) firm will focus exclusively on early-stage life sciences startups in Canada and the United States (US) with its fifth fund.

Seido has targeted Canada for the strength of the country’s academic institutions, its proximity to the large US market, and a lack of capital allocated to Canadian life sciences startups relative to the returns they have generated.

“This is the place to be,” Seido co-founder and partner Olivier Belenger told BetaKit in an interview. “This is the place to develop the new vision.”

“This is the place to be.”

Olivier Belenger,
Seido Capital

The now Canadian-headquartered VC firm has secured $45 million CAD in initial commitments for Fund V. The first close of its fifth fund, featuring a number of Canadian limited partners (LPs), brings Seido over halfway to its $70-million Fund V target, which it hopes to reach over the next 12 months.

Seido has been investing in early-stage life sciences startups for more than two decades. Founded in Belgium in 2003 under the name Theodorus, the then-European VC began investing in Canada through its fourth fund, which had a dual focus on Canada and Europe. 

Following some positive early returns across the ocean, Seido decided to leave Belgium altogether to focus on North America and begin building what it hopes will become a lasting Canadian VC franchise. To reflect its shift in strategy, the firm adopted a new name in Seido, a Japanese word that typically translates to precision.

Belenger and Seido co-founder and partner Théo Risopoulos expressed confidence that Seido can replicate the kind of returns it has posted in Europe with funds dedicated to North America. Going forward, Seido will focus solely on North America, with 80 percent of its Fund V capital allocated to early-stage Canadian life sciences businesses and the remainder to US companies.

Seido’s Fund V LPs include returning backers Fonds de solidarité FTQ and Fonds d’investissement Eurêka, which both supported its fourth fund, and new investor Investissement Québec. LPs also include some undisclosed family offices from Canada and Belgium, as well as some life sciences entrepreneurs from Seido portfolio companies.

Recent research from RBCx on VC-backed exits in Canada since 2013 indicates that life sciences firms are responsible for an outsized proportion of value creation. RBCx reported that life sciences accounted for 11 of Canada’s top 50 exits and 44 percent of aggregate exit value during this time, despite only seven percent of all VC dollars flowing to life sciences funds.

Belenger acknowledged that Canada’s life sciences sector has produced some big success stories in recent years. This, coupled with the country’s life sciences research ecosystem and rate of company creation in the space made it an attractive base from which to build a life sciences-focused VC franchise.

RELATED: Pender Ventures closes second B2B software, healthtech-focused VC fund at $100 million

“The quality of the research inside the universities in Canada [is] totally outstanding,” Belenger said.

In an interview with BetaKit, Risopoulos described Canada as “excellent” when it comes to the research part of the equation, but noted that it has been lacking when it comes to commercialization. He argued that the country could use more life sciences-focused VC funds with more money. “That’s exactly why we came here five years ago,” he added.

“We recognize [Seido’s] unique expertise in valuing academic research and creating businesses,” Fonds de solidarité FTQ vice president of private investments and impact investments, life sciences, Maxime Pesant, said in a statement. “Over the past four years, we have seen in the Montréal-based team an invaluable partner.”

Under its former moniker, Seido, deployed its first two funds in Belgium—including its $6.8-million Fund I and its $8.1-million Fund II, which it began investing out of in 2006.

Around 2013, Seido raised a larger, $30.3-million third fund focused on investing across Europe, before expanding to Canada with its $62.9-million fourth fund in 2018. Fund IV saw the VC firm open an office in Montréal, while retaining its base of operations in Brussels.

RELATED: Ontario launches second phase of life sciences strategy to bolster research and funding

Risopoulos said that the VC firm invests across hardware, software, biotech, and biopharma, focusing on startups with strong intellectual property and an exit strategy. He claimed that Seido looks at VC differently than some of its Canadian peers thanks to its European roots. “We start by the end,” he said.

The Seido partner noted that Europe does not play host to as many Series B, C, or D funds, or initial public offerings compared to North America, forcing European VCs to sell a bit earlier. Given this, Seido tries its best to know what types of tech sell and how much acquirers will pay, an approach that he said has served the firm well over the past two decades.

Risopolous noted that the firm regularly consults with connections at buyers in the biopharma and medtech space to ensure it has a pulse on the industrial and strategic exit market.

To date, Seido has made 50 investments and exited 30 of them. The VC firm claims to have generated top decile distributed to paid-in capital (DPI) across its first and third funds (4.5x and 3.3x, respectively), and top quartile DPI through its second fund (1.9x), with a net internal rate of return (IRR) of 15 percent across its first three funds. Per a recent BDC report on Canada’s VC landscape, this places Seido beyond the upper quartile of Canadian VC funds from that timeframe in terms of median DPI but below gross 10-year IRR among life sciences investors.

Risopoulos said it is hard to provide meaningful DPI for Seido’s fourth fund given that the firm has just begun the divestment phase, but noted its total value to paid-in capital is 3x. So far, he expects the Canadian half of Fund IV—which includes DrugBank and Simmunome, among others—to generate greater returns than its European portion.

RELATED: French private equity firm Jolt Capital to open North American headquarters in Montréal

To date, Seido has largely invested in European companies, many of which have been acquired by US buyers. But according to Risopoulos, it typically takes longer to build a company in Europe and sell it to a US buyer than it does to do so from Canada. “The dynamic of the market for value creation [in Canada] is … way faster than in Europe,” he said, noting that this was one of the factors that led Seido to shift its focus to Canada.

Seido aims to build a Fund V portfolio of 10 to 15 companies, cutting first cheques of between $500,000 and $2.5 million into firms at the pre-seed, seed, and Series A stages. The VC firm has reserved approximately half of Fund V for follow-on investments.

Risopoulos expects Seido to be particularly active in Québec while investing across Canada, with room to be opportunistic in the US. Risopoulos said the VC firm aims to lead financings but noted that it may co-lead or support based on the size of the round. He also sees room for Seido to leverage its overseas network to help Canadian startups access the European market and potentially bring some foreign companies to Canada.

The initial close of Seido’s fifth fund puts the VC firm in some rare company by Canadian standards. Per recent research from RBCx, over the last 10 years, only 2.9 percent of Canadian VC firms have graduated to Fund V (excluding all opportunity, continuity, and alignment funds).

Feature image courtesy Seido Capital.

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Shopify has released an open letter calling on the federal government to “do whatever is necessary” to get striking Canada Post workers back to work ahead of the Black Friday/Cyber Monday (BFCM) weekend. 

Open letter claims at least 67,000 Shopify-powered small businesses rely on Canada Post.

In the letter addressed to Minister of Labour and Seniors Steve MacKinnon, Shopify claimed at least 67,000 of its associated small businesses rely on Canada Post to fulfill orders, especially to rural areas and what Shopify calls a “monopoly” on P.O. box deliveries. Shopify added that MacKinnon must immediately intervene to “prevent a devastating blow to Canadian small businesses at their most critical time of year.” 

Shopify attached the above image in the letter, claiming it illustrates domestic urban and rural orders (in blue and red, respectively) from Shopify merchants that were fulfilled by Canada Post from Nov. 1, 2023 to Dec. 31, 2023. Shopify said a 2024 map “wiped clean” due to prolonged strike action would “devastate” the economy. 

The open letter follows 12 days of striking since The Canadian Union of Postal Workers (CUPW) and Canada Post couldn’t reach a deal on a new collective agreement. The 55,000 striking workers have so far resulted in an estimated 10 million undelivered parcels, according to The Canadian Press.

“You must immediately step in and do whatever is necessary to resolve this dispute, including binding arbitration or legislation allowing Canada Post to operate while negotiations continue,” the letter reads. “Minister, show us the government has some backbone to protect entrepreneurs.” 

The open letter aligns with prior communications from Shopify CEO Tobi Lütke and Shopify president Harley Finkelstein posted on X after the strike was first announced on Nov. 15.

“If there was ever a time for the Government to take action, it’s now. Canada Post going on strike 2 weeks before Black Friday devastates small businesses,” Finkelstein said in an X post on Nov. 15. “If small businesses are the backbone of our economy, the Canadian [government] needs to show that they have one and force this to end now.” 

Like many small businesses across the country, Shopify is heavily incentivized to see the strike end. Last year, the company set a $9.3-billion sales record over the BFCM weekend, a 24 percent increase from the same record-setting period in 2022. 

According to the CBC, Canada Post says it can’t afford strike demands since it has lost a total $3 billion CAD since 2018, with $490 million of that loss occurring in just the first half of 2024. Meanwhile, CUPW is saying that Canada Post executives are still accepting bonuses, and that it’s possible to earn more money by expanding its services to include postal banking, senior check-ins, and an e-commerce platform. In addition to a pay raise in line with inflation, the union is demanding 10 paid medical days, improved rights for temporary employees, and harassment protections. 

RELATED: Shopify merchants set $9.3-billion sales record over Black Friday, Cyber Monday

While the right to strike is recognized under the Charter of Rights and Freedoms, the federal government has the power to order disputing parties to binding arbitration under the Canada Labour Code. The federal government may be cautious to exercise this power again, as it has already disrupted the collective negotiations of Canadian air, rail, and port workers this year. 

The Teamsters Canada Rail Conference (TCRC) appealed the binding arbitration order imposed on Canadian National and Canada Pacific Rail workers in August, arguing that Charter rights were violated as a result of the federal government’s actions. 

“These decisions, if left unchallenged, set a dangerous precedent where a single politician can bust a union at will,” TCRC president Paul Boucher said in an August statement. “The right to collectively bargain is a constitutional guarantee. Without it, unions lose leverage to negotiate better wages and safer working conditions for all Canadians.” 

Following publication of the letter, MacKinnon told reporters that sending the Canada Post dispute to binding arbitration “is not in the cards,” according to The Canadian Press. MacKinnon added sending the matter to arbitration this time around is more complicated, given the “fundamental” issues on the table, referencing the disagreement the corporation and the union have on Canada Post’s business model.

“While I would never rule out any option in the future, what I would say right now and for the foreseeable future is if this agreement does not come together at the table, there will be no end to this labour conflict,” MacKinnon said, according to The Canadian Press. 

The Minister’s comments came after the special federal mediator appointed to the matter decided to temporarily suspend mediation between Canada Post and CUPW. They “remain too far apart on critical issues for mediation to be successful at this time,” MacKinnon announced in a post on X Wednesday morning. 

UPDATE (11/27/2024): This story has been updated with reporting from The Canadian Press and commentary from Minister Steven MacKinnon.

Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.

Feature image courtesy Shopify. 

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Two cryptocurrency firms have hit new milestones for client holdings in Canada.

Today, Toronto-based WonderFi revealed its Bitbuy and Coinsquare crypto trading platforms have achieved a new record in client assets under custody that surpasses the $2.1 billion CAD mark. San Francisco-based crypto exchange Kraken also announced last week that its Canadian operation has exceeded $2 billion CAD in combined assets under custody.

Assets under custody refer to the total value of digital assets that an entity holds on behalf of clients. This includes cryptocurrencies, tokens, and other digital assets stored in wallets managed by the custodian.

“Reaching the $2 billion milestone is testament to our ongoing effort to provide Canadians with a superior crypto trading experience.”

Alex Mehrdad, Kraken Canada

WonderFi, which trades on the Toronto Stock Exchange under the ticker WNDR, said its latest assets under custody figure marks an increase of over 65 percent since the end of Q3 2024 and a 110 percent increase compared to year-end 2023.

The company also reported that its customers’ cash balances have increased by 66 percent since the end of Q3 2024.

WonderFi owns two of Canada’s largest registered and regulated crypto exchanges, Bitbuy and Coinsquare, as well as crypto payments platform SmartPay and a stake in crypto custodian Tetra Trust. Earlier this year, WonderFi registered to provide crypto trading services in Australia, and has been eyeing a US expansion since October 2023.

In a statement, WonderFi said the total value of assets staked on Bitbuy and Coinsquare now exceeds $120 million, an increase of 165 percent year-to-date. The firm also reported that Bitbuy and Coinsquare have seen increases in revenue in recent weeks.

RELATED: WonderFi CEO Dean Skurka kidnapped, released after reportedly paying $1-million ransom

“We’re extremely pleased with the new market confidence demonstrated by investors,” WonderFi CEO Dean Skurka said in a statement. “Consumers have long been optimistic about the value in the industry and their confidence has now been bolstered through the recent moves by multiple global jurisdictions and institutional-level investors to treat digital assets as a viable long-term investment option.”

The new record comes three weeks after reports that Skurka was kidnapped and held for ransom in Toronto. The incident was part of a growing trend known as “$5 wrench attacks,” where individuals holding significant amounts of crypto are threatened or assaulted in an attempt to obtain their private keys. Skurka was fortunately unharmed in the ordeal.

Kraken is a San Francisco-headquartered cryptocurrency exchange that offers over 175 digital assets for trading, as well as tools like margin and futures trading, staking rewards, and non-fungible tokens marketplace, among others.

The company first entered the Canadian market in 2016 following its purchase of Halifax-based CaVirtEx. Kraken grew and expanded initially in Nova Scotia, and began building a dedicated Canadian team in the fall of 2022. 

“Reaching the $2 billion milestone is testament to our ongoing effort to provide Canadians with a superior crypto trading experience,” Kraken Canada’s general manager Alex Mehrdad said in a statement. “As we’ve doubled in size within Canada, we’ve also steadily invested in our product offering to ensure Canadians can explore the breadth of the crypto ecosystem through our range of innovative products.”

RELATED: Kraken appoints Alex Mehrdad as new leader of crypto exchange’s Canadian operations

In 2023, Kraken entered into a pre-registration undertaking with the Ontario Securities Commission (OSC), which granted it conditional approval to operate in the province while pursuing full registration. At the time, David Ripley, Kraken’s then-CEO, described Canada as “critical to our mission to empower people with new ways to connect and transact.”

“While we’re pleased with this progress, we’re aware that our mission is not complete and that most people have still not made their first crypto transaction,” Mehrdad added.

Feature image courtesy Unsplash. Photo by Dmitry Demidko.

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Costa Mesa, California-based, Canadian-founded FightCamp has launched its at-home boxing connected fitness platform in Canada. 

“Our team of former boxers and busy parents hope to add a fun, engaging and effective routine to many households.”

Khalil Zahar
FightCamp

FightCamp was founded by CEO Khalil Zahar, a Canadian entrepreneur who received mechanical engineering degrees from Laval University and the University of Toronto. Originally launched as Hykso in 2014 offering wrist sensors for competitive athletes, the company graduated from the spring 2015 cohort of Founder Institute’s Montréal pre-seed accelerator and was accepted into Y Combinator’s Winter 2016 cohort. In a statement, Zahar said he leveraged his time at Founder Institute to build FightCamp’s strike-tracking technology.

Utilizing a Peloton-style model, FightCamp aims to teach boxing and kickboxing fundamentals through more than 3000 video workouts that range from 5 to 60 minutes. A standard package costs $999 USD, currently on sale for $699, and includes a boxing bag, a heart rate monitor, and four trackers that go into the provided hand and ankle wraps. Additionally, users pay $39 USD per month for a membership that provides access to FightCamp’s video workouts, progress tracking, and workout plans. 

“With our proprietary strike tracking technology, people see their hard work reflected on screen in real-time while they workout, driving focus and motivation to push through their past records,” Zahar said in a statement. “With only roughly half of Canadians currently getting enough exercise, our team of former boxers and busy parents hope to add a fun, engaging and effective routine to many households.”

The company has since raised a total of $98 million in external funding according to TechCrunch, with the majority coming from a $90 million round in 2021 that included backing from investors such as Mike Tyson, Floyd Mayweather, and Georges St-Pierre. FightCamp’s Canadian investors include Montréal-based BCF Ventures, Panache Ventures, and 500 Canada. 

Feature image courtesy FightCamp. 

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Toronto-based Practice Better has closed a $13-million USD ($18-million CAD) debt facility from CIBC Innovation Banking. 

The credit facility, which closed in September, will help Practice Better explore new initiatives and growth opportunities, as well as double down on initiatives the startup believes are working, the company said. To date, it has raised $40 million USD.

Practice Better’s Nidal Haque said the new credit facility will give the startup “more optionality.”

Practice Better was founded in 2014 by CEO Nathalie Garcia as an all-in-one software for wellness providers to manage a range of services, including scheduling, telehealth, and payments. Garcia originally built Practice Better to serve her own needs as a holistic nutritionist.

In an interview with BetaKit, Practice Better chief growth officer Abigail Keeso said the platform, which is used by over 18,000 practitioners in over 70 countries, is predominantly targeted to nutritionists and holistic wellness practitioners, but noted it is being used by other healthcare providers, such as chiropractors, registered dieticians, and functional medicine practitioners.

This credit facility is Practice Better’s first capital injection since the startup secured a $37.7-million CAD growth investment from Kansas City, Mo.-based growth equity firm Five Elms Capital. At the time, and again this week while speaking with BetaKit, the startup declined to disclose whether that investment gave Five Elms a majority stake.

Since the closing of that financing in December 2023, Practice Better has been focused on expanding its artificial intelligence (AI) offerings and doubling down on embedded payments, according to Nidal Haque, Practice Better’s vice-president of finance and operations.

“We actually did not need the money at all,” Haque told BetaKit in an interview, claiming the firm has long been profitable.

“We were raising this credit facility purely opportunistically to have a stronger banking partner and have more optionality,” he added.

RELATED: Jane App co-founder reveals company’s centaur status at BetaKit Town Hall: Vancouver

Haque explained that one priority Practice Better has been focused on is unlocking payments as an additional revenue driver. He noted this has been a key focus area since August 2023, when the company launched an embedded payments solution with payments processing giant Stripe. 

Practice Better launched the solution to centralize and simplify the payments experience for users, according to Haque. By controlling the entire process within the platform, users no longer need external tools or systems to handle payments and can manage everything through an integrated payments dashboard. 

For Practice Better, owning the payments experience allows the startup to oversee the financial and commercial aspects of payments, Haque said, and allows the company to monetize the solution and set its own terms.

“Before that, we just had very simple payment integrations with some of the larger providers, where a customer would go and create their account [and] they would link it to Practice Better,” Haque said.

Since the feature launch in August, Practice Better has seen its payments revenue triple, Haque said. He also claimed that transaction processing volume has doubled on a monthly basis and continues to grow steadily month over month, calling embedded payments “a significant driver” of revenue retention and growth.

RELATED: Procurify launches new accounts payable product following growth capital from CIBC

Practice Better has also been focused on expanding its AI-enabled offerings to practitioners in the last year and a half. These include an AI charting assistant that the company says reduces time spent on note-taking, and an AI dictation tool that allows practitioners to dictate notes instead of typing. 

The platform also now automates Google review requests, addressing what Keeso described as a common challenge practitioners face in attracting clients and filling their practices.

“Practitioners are doing a lot of tedious tasks, and tasks they have to repeat over and over again,” Keeso added. “We really believe that AI can be helpful in saving them a lot of time and reducing that strain of burden … that’s leading to a lot of practitioner and healthcare burnout.”

Part of that also means remaining open to partnerships and acquisitive growth. In July 2023, the startup acquired That Clean Life (Keeso’s exited startup) to integrate nutrition planning and healthy eating into the workflows of customers and care plans for clients. It has also built a partnership with Ottawa-based Fullscript, which includes an integration that streamlines the process of recommending and managing supplements within Practice Better’s system.

Speaking about Practice Better’s future potential acquisitions, Haque said, “We’re not just going to gobble up companies just because it looks cool. I think we’re very, very intentional about it.”

RELATED: PointClickCare continues growth through acquisition with American HealthTech purchase

Practice Better’s growth strategy also includes expanding the team—Haque noted the startup’s team now sits just shy of 70 people, a number Practice Better expects to sit as high as 84 by the end of next year. “We want to run a very lean, profitable, sustainable enterprise by hiring top talent who can do really, really awesome work, and we don’t want to have headcount bloat,” he added.

Beyond offering the “best economics,” Haque said Practice Better sought a banking partner that was “heavily vested in the relationship and in our success.” He noted that CIBC’s role as “deeply entrenched” in the startup ecosystem would help create connections with more tech companies.

“Practice Better’s innovative platform is helping thousands of healthcare practitioners run more efficient practices, giving them more time to focus on their clients and scale their impact,” Josh Olawale, director at CIBC Innovation Banking, said in a statement. “We are excited to support their continued growth and help redefine what is possible in the health tech space.”

Keeso added that the new financing is also aimed to help Practice Better unlock new opportunities to help practitioners grow their businesses. 

“[Our customers] go to school to learn how to become practitioners and not to do business, and I think there’s a lot we can still do to help their businesses grow, not just help them with their day-to-day,” she added.

Feature image courtesy Practice Better.

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The start of 2024 looked like a turning point for Canadian small businesses. 

In the first three months of the year, small businesses were doing notably better across three core metrics—sales growth, late payments, and time to be paid. The Bank of Canada had decided to start cutting interest rates in June, and it wasn’t unreasonable to expect a potential boost to consumer spending. Expectations for an economic rebound were growing. 

“When more businesses adopt emerging technologies, the economic benefits multiply across the economy.”

But as we approach the end of the year, the latest data from Xero Small Business Insights (XSBI) shows disappointing metrics for Canada’s small business sector, defined as companies that have between one and 99 employees.

Those companies, which include many Canadian startups, experienced a 3.7 percent year-over-year sales decline in the first part of the year.

And despite the early optimism, Canadian small businesses have yet to feel the lift that they hoped lower inflation and rate cuts would deliver.

Rate cut impact—or lack thereof

It is not unusual for the impact of interest rate cuts to take up to 18 months to fully flow through the economy. 

However, what’s concerning is the lack of a short-term “announcement effect” that would have boosted consumer spending in small businesses. 

In fact, according to the new XSBI quarterly data, the opposite is happening. 

Consumer spending didn’t surge—it’s still lower than a year ago. The delayed effects of the rate cut, paired with consumer caution, mean the immediate benefits small businesses hoped for have yet to materialize at all.

September’s CFIB Monthly Business Barometer shows similar trends. The Small Business Confidence Index dropped from 56.6 points in May—before the rate cuts started—to 55.0 in September. The short-term optimism index also dropped almost two points. Small businesses still aren’t feeling the benefits of the rate cuts rolled out by Bank of Canada Governor Tiff Macklem. 

Canada as a global outlier

Is this soft sales performance unique to Canada?

Small businesses around the world are still addressing post-pandemic realities, but their challenges don’t seem as severe as the situation facing Canadian businesses. 

For instance, in the United States, the small business sector experienced a sales decline of only 0.9 percent in the same period (April to June) that Canadian sales dropped by 3.7 percent. Canada also underperformed other major economies, like the United Kingdom and Australia.

This is all despite some positive shifts in other metrics. For example, late payment times in Canada have continued to improve. Businesses are now waiting 6.3 days on average for overdue payments, compared to 7.6 days in the previous quarter.  

The disconnect may be, at least in part, due to Canada’s high unemployment rate. 

While other major economies have managed to avoid significant job losses, while controlling inflation with interest rate rises, Canada’s unemployment rate has risen to over six percent. Insecure job prospects discourage consumers from spending, which impacts small businesses that rely on local, consistent patronage. 

This factor, coupled with ongoing cost of living pressures, means Canadian consumers are holding back—creating challenges for the small business sector.

Small businesses have little control over macro-factors that negatively impact the broader economy (and have an outsized impact on their success). They need to be able to respond to them as best they can, building resilience into their systems and processes while they await higher spending trends.

Resilience through digitization

There’s no telling how long it will take for the impact of increasingly lower interest rates to flow through to consumer spending at small businesses. But waiting around isn’t an option. 

What small business leaders can do is improve their resilience by taking steps to increase productivity. This can include: 

• Choosing tools and technologies that introduce efficiencies into your systems.
• Reviewing your systems and adopting smarter methods and workflows.
• Investing in talent by hiring and upskilling team members.
• Harnessing your inner entrepreneur to scale your business, rethink supply chains, and foster a spirit of innovation in your business. 

Small business owners also need to strategically shift how they leverage and use technology. Technology use is a key driver of productivity growth. And improving productivity is a great way to secure the long term success of your business. 

Data from Xero’s 2023 state of the industry report shows that many accounting businesses (70 percent) are experiencing revenue growth. A notable 40 percent of these practices attribute this growth directly to their use of cloud-based software. This suggests that while macro conditions may pose barriers, individual businesses can still find paths to growth through operational innovation.

Policymakers, too, have a critical role to play in making the technology transition easier by crafting policies that prioritize the needs of small business owners. This will allow Canadian small businesses to accelerate their ability to bounce back faster, ensuring they’re ready for the next phase of economic recovery. 

Government policies can enable, rather than hinder, technology adoption among small businesses. For instance, initiatives like open banking—dubbed “consumer-driven banking” in Budget 2024—offer a promising path forward. By allowing small businesses to share their financial data more freely and shop around for better financial products, open banking could help improve cash flow and reduce operational stress.

A simple truth: When more businesses adopt emerging technologies, the economic benefits multiply across the economy. 

In other words, fostering a digital-first approach across industries may be the key to helping Canada’s small business sector finally rebound.

Ben Richmond is Managing Director, North America at Xero.

PRESENTED BY

View the latest data in the Xero Small Business Insights report.

Feature image courtesy Unsplash. Photo by Jason Goodman.

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Finnish founder networking extravaganza Slush will make its North American debut in Québec City next spring as Slush’D. 

The economic development agency Québec International (QI), which supports business development in the province’s capital region, is hosting the one-day conference on May 7, 2025, with an undisclosed amount of financial support from Québec’s tourism ministry. QI’s associated incubator, LE CAMP, will help organize the event along with the municipal tourism department Destination Québec cité, and Espace CDPQ, the venture capital (VC) hub of the Caisse du dépôt et de place du Québec (CDPQ).

“After experiencing Slush for the first time in 2023, I was amazed by how the event prioritizes creating genuine connections among its participants.”

Sébastien Tanguay
LE CAMP General Manager

Slush’D Québec City is set to be the very first North American satellite event of Slush, the popular Finnish startup and tech conference. Slush’D Québec City will feature a similar format, with speakers, activities, and pitch competitions designed to facilitate connections between founders, venture capital (VC) investors, and other ecosystem players. 

Sébastien Tanguay, general manager of LE CAMP, hopes that the event will inject new momentum into Québec City’s startup and tech ecosystem, in a similar way that Slush has for Helsinki. 

“After experiencing Slush for the first time in 2023, I was amazed by how the event prioritizes creating genuine connections among its participants,” Tanguay wrote in an email to Betakit. “It’s incredible how an event with 13,000 attendees can feel so personal and tailored.” 

Québec’s edition of the event, which is aiming to attract roughly 500 attendees, will focus on “bridging the gap” between local startups and large corporations. Mentorship opportunities and speaker stages will feature best practices and success stories for local founders to learn from.

In Finland, Slush is typically held in the depths of winter, when daylight hours are limited. When it ran last week on Nov. 21, the sun set at 3:36 pm local time. 

Though Québec’s edition will be held in May, Carl Viel, president and CEO of QI, said in a statement that Québec Slush’D will “stay true to this Finnish concept” by turning the city into a “vibrant hub.” Viel also hopes to strengthen the relationship between the Québec and Finnish capital cities.

The one-day conference coincides with another key meeting of VCs in the Québec ecosystem: the Annuel du Capital de risque, an “Investor-Day”-style event put on by Espace CDPQ on May 6. Tanguay said that he hopes it will attract VCs from across Canada, the US, and Europe. 

Espace CDPQ will also offer an exclusive Investor Lounge and networking application for founders to secure one-on-one time with investors during Slush’D. 

High-profile speakers at the 2024 edition of Slush, which was held earlier this week, included Nvidia founder Chris Malachowsky and Twitch co-founder Justin Kan. The conference also hosted several side events, including mini-conferences on deep tech, life sciences, and Roblox and Fortnite gaming tech, as well as a climate tech summit. 

Thirty-three satellite Slush’D events have been held outside of Helsinki, with 14 events so far in 2024 alone. The first edition of Slush was held in 2008, when local entrepreneurs envisioned a gathering for Finland’s small tech and startup scene, and has now grown to welcome over 13,000 attendees. Building on its local success, it expanded to global outpost events in 2015. 

While Slush in Helsinki is run by students and early-career entrepreneurs, who often move on to found their own companies, QI has experience hosting events and conferences in a number of sectors, including tech. The non-profit receives support from municipal, provincial, and federal governments to sustain economic development in the region. 

QI’s license agreement to host Slush’D was confirmed four weeks ago, Tanguay said, so the organization is still in the early stages of confirming a list of speakers and activities. 

Feature image courtesy QI.

The post Québec International to bring Finnish networking conference Slush’D to Québec City first appeared on BetaKit.

Toronto-based Halal-certified FinTech startup Manzil has launched its first wealth management solution through subsidiary Manzil Wealth following its acquisition of Winnipeg-based Canadian Islamic Wealth.

Canadian Islamic Wealth is a fellow Halal investment and financial services provider. The announcement of the deal, which closed in September, comes just weeks after Manzil announced it had acquired Aghaz Investments as part of the startup’s expansion to the United States. 

“This platform sets a new standard for Halal wealth management.”

Manzil CEO and co-founder Mohamad Sawwaf declined to disclose the value of the deal, but told BetaKit that Manzil has acquired all of Canadian Islamic Wealth’s 300 clients, as well as the team, which is moving to Manzil Wealth. 

Jesse Reitberger, founder of Canadian Islamic Wealth, is joining Manzil Wealth as senior wealth advisor as a result of the deal, and will lead Manzil Wealth’s strategy. 

“Being part of the Manzil Wealth platform is a game-changer for our clients and advisors,” Reitberger said in a statement. “This partnership allows us to offer a wider range of Sharia-compliant services while staying true to our mission of ethical investing.”

Launched in 2020 initially as a Halal mortgage platform, Manzil has expanded its FinTech offerings significantly in the last four years. Today, the startup offers a range of financial services tailored to the Muslim community, who prioritize ethical and interest-free banking solutions in line with Sharia, or Islamic law.

Each of Manzil’s products are reviewed by a Sharia supervisory board, internal and external Sharia auditors, and a third-party Sharia advisory firm. 

In a statement sent to BetaKit, Sawwaf claimed that Manzil has successfully financed over $75 million in Halal mortgages since inception.

Manzil Wealth is being offered to financial advisors in Canada. The software platform will offer Sharia-compliant financial products, such as Halal investments, mortgages, and financial planning training and support, as well as FinTech solutions aimed to simplify the client management process.

RELATED: Manzil launches “the Halal version of Wealthsimple” for Muslim Canadians

“The launch of the Manzil Wealth platform and the acquisition of Canadian Islamic Wealth represent a pivotal moment in Islamic finance in Canada,” Sawwaf said in a statement. “This platform sets a new standard for Halal wealth management, providing advisors and clients with the resources they need to achieve financial success while staying true to their values.”

Much of Manzil’s expansion to date has been fuelled by partnerships and acquisitions. In 2020, the startup partnered with FinTech firm Koho to provide a Halal prepaid Visa card, and in 2022, acquired Muslim Will to expand into the estate planning space. Earlier this month, Manzil announced it had acquired Aghaz Investments to make its investment platform offering available for US retail investors. 

Sawwaf told BetaKit he sees mergers and acquisitions (M&A) as “critical to ensure the long-term viability of the Islamic finance industry in North America,” noting that smaller players often require financial and non-financial resources to maintain their viability and long-term sustainability.

“M&A plays a pivotal role in this strategy by enabling Manzil to integrate complementary services, broaden its product portfolio, and enhance its market presence,” Sawwaf added.

Feature image courtesy Manzil via Facebook.

The post Manzil launches Halal wealth management solution following acquisition of Canadian Islamic Wealth first appeared on BetaKit.

Toronto-based investment software startup Boosted.ai has secured a $15-million USD ($20.9 million CAD) bridge round to grow its artificial intelligence (AI) platform, Alfa. 

Boosted.ai anticipates raising a much larger round in 2025. 

The all-equity round saw participation from existing investors Ten Coves Capital, Spark Capital, Portage Ventures, Royal Bank of Canada, and HarbourVest Partners, as well as “certain fund(s)” managed by Fidelity Investments Canada. When asked to clarify, a Boosted.ai spokesperson told BetaKit that the corporate entity of Fidelity did not invest, but a fund manager at Fidelity participated by investing out of a single Fidelity fund. 

Boosted.ai did not disclose who led the round but described them as “a strategic investor who is also a client.” 

Launched in 2017 by CEO Joshua Pantony, Jon Dorando, and Nicholas Abe, Boosted.ai uses AI for its proprietary web-based platform called Boosted Insights, which brings quantitative investing techniques to portfolio managers. 

Boosted.ai said its clients use the platform for analytics, research and decision making, consultancy, commentary creation, and portfolio risk monitoring. The company said its latest tool, Alfa, builds on those roots and allows users to automate their workflows. Boosted.ai described Alfa as “essentially an AI coworker that users can train to think like them.” 

RELATED: Boosted.ai raises $43.7 million CAD to scale AI platform for investment managers

In addition to investing in the AI offering, Boosted.ai will use the fresh capital to invest in “additional systems and team members” to handle onboarding and training new users due to increased product demand. Boosted.ai told BetaKit that it anticipates raising a much larger round in 2025. 

With this latest raise, Boosted.ai has raised $61 million USD ($86 million CAD) to date. This figure does not include $10 million in growth capital the startup secured from CIBC Innovation Banking this past August, which Boosted.ai said it would use to invest in product development and sales expansion across the Canadian and United States markets.

The startup raised a $11.2 million CAD ($8 million USD) Series A round led by Portage Ventures in May 2020 before going on to secure a $43.7 million CAD ($35 million USD) Series B round led by Ten Coves Capital and Spark Capital in January 2022. At the time, Boosted.ai said it served 40 clients and had around 30 employees. Now, the startup has around 65 employees and claims it serves over 300 active clients that manage more than $3 trillion in assets across the institutional and wealth management space. 

Feature image courtesy Jason Briscoe via Unsplash.

The post Boosted.ai raises $20.9 million CAD to grow AI investment manager platform first appeared on BetaKit.

Calgary-based healthtech startup OraQ AI has closed $2.6 million CAD in seed funding from dentists and others to commercialize its clinical decision support platform for dental practices.

Led by dentists-turned-tech entrepreneurs, OraQ has developed software that uses artificial intelligence (AI) to analyze dental and medical records and help other dentists assess patient risk, with the goal of helping them boost their businesses while also improving patient health and experience.

After securing Health Canada and United States Food and Drug Administration approval in 2023, OraQ launched its product and entered the market earlier this year. With its latest financing, the startup has set its sights on growing with mom-and-pop dental offices across North America.

“Too many patients leave today either confused or not trusting their dentist because they think the dentist is selling them on something they don’t need.”

Dr. Amreesh Khanna,
OraQ

The seed round, which was raised via simple agreement for future equity and closed in July, was led by Alberta-based angel physician group AngelMD. It also saw participation from the Centre for Aging + Brain Health Innovation, Startup TNT, and undisclosed dentists, physicians, family offices, and angel investors.

Dr. Amreesh Khanna, the co-founder and CEO of OraQ, bought his first dental practice in 2012 with his wife and brother, who are also both dentists. A year later, they lost it to the 100-year flood that hit Calgary in 2013. Khanna described the event as “a pivotal moment” for him. 

“It really shifted me from being a dentist who owned a business to really becoming an entrepreneur and business owner who practiced dentistry,” Khanna told BetaKit in an exclusive interview.

After having learned little about business during dental school, Khanna said that losing his practice in 2013 forced him to look at the business of dentistry differently as they rebuilt. Over the coming years, Khanna said he noticed the discrepancies in how different dentists treated different patients and how they led to missed care and business opportunities.

He began to wonder if there was a way to help ensure that clinicians evaluated patients consistently regardless of their professional training, expertise, and years of experience. He became interested in AI and machine learning (ML) as a means of doing this in a scalable fashion.

This led Khanna to return to his alma mater, the University of Alberta’s Faculty of Medicine and Dentistry, to publish research on applying ML to clinical data in the dental space and work with the Edmonton-based Alberta Machine Intelligence Institute (Amii) to conduct tech and market validation.

After those efforts proved fruitful, Khanna incorporated OraQ in 2021 and teamed up with fellow dentist Dr. Mike Parchewsky, co-founder and chief clinical officer, and tech leader Wayne Madhlangobe, co-founder and CTO, to build the startup.

RELATED: Started in a bar, now we’re here: Startup TNT completes first close of targeted $5-million VC fund

OraQ’s seed round brings the company’s total dilutive funding to $3.9 million, a figure that also includes $1.3 million in previously unannounced equity pre-seed funding from 2021 that was provided by Greyhill and undisclosed dentists, physicians, and other angels. Separately, OraQ has also secured $1.3 million to date in non-dilutive financing from Alberta Innovates, the National Research Council of Canada’s Industrial Research Assistance Program, and Mitacs.

“Too many patients leave today either confused or not trusting their dentist because they think the dentist is selling them on something they don’t need,” Khanna said. He noted that many patients also depart without booking their next appointment. 

OraQ hopes to change that with its software, which is designed to help dentists make better decisions and empower patients to understand the rationale behind dentists’ recommendations.

Fellow dentist Dr. John Tran, an angel investor in OraQ via Startup TNT’s investment summit, told BetaKit the company is “tackling a definite pain point in the dental industry.”

“How many times do patients go to different dentists and get wildly differing opinions and treatment plans?” Tran said. “OraQ is to be an industry science-based updated system that helps dentists with diagnosis, treatment planning, progress monitoring, and patient communication… all as an OBJECTIVE, scientifically-based system.”

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

According to Khanna, OraQ’s software aims to leverage “the mind and the wisdom of 1,000 dentists” in every patient interaction. As a clinical support system rather than a diagnostic tool, Khanna emphasized that OraQ is designed to help clinicians assess patient risk. “We’re not saying, ‘You have this and you need this done,’” he said.

In terms of data, Khanna said that OraQ analyzes patient medical and dental health histories, dental examination data collected and reported into OraQ as clinicians perform exams, and historical tooth charting and periodontal or gum pocket depth records.

The startup’s AI-powered platform indicates that a patient is at low, medium, or high risk in a given category based on data analysis, evidence and research-backed protocols. OraQ focuses on seven core areas: medical risk, sleep disorders, bite and jaw issues, cracks and teeth, cavity profile, gum health profile, and esthetics.

“We’re not saying, ‘You have this and you need this done.’”

Dr. Amreesh Khanna,
OraQ

“It’s up to the clinician to make the final judgment on the diagnosis and the treatment plan,” Khanna said.

“That risk-based approach, we found, has been very well-received because it still empowers the clinician to use their expertise and their judgment for the final decision,” he added.

OraQ has a team of medical doctors, dentists, and other specialists that has helped build, vet, and refine its tech. “Everything has to be grounded in research and evidence-backed protocols, first and foremost, and then our AI is constantly being tested by our clinical team to make sure that it’s giving the right outputs,” Khanna claimed.

“What resonates with us in particular is that the OraQ approach is to see the entire dental value chain, end-to-end, delivering at multiple points in a variety of ways,” AngelMD general partner Dr. Shamir Patel told BetaKit. “They focus systematically on all processes in an effort to build a platform, not a tool.”

Patel said AngelMD believes that OraQ could deliver “optimized and standardized evidence-based patient care, improved practice management and increased revenue generation.”

Feature image courtesy OraQ AI.

The post Dentists helping dentists: Clinician-founded OraQ secures $2.6 million to help assess patient risk with AI first appeared on BetaKit.

Globalive Capital’s Brice Scheschuk recently spoke at Highline Beta (where BetaKit shares an office) about owning your startup journey.

Brice is also the co-founder of MindFrame Connect, a non-profit focused on building entrepreneurial resilience. During the presentation, he posed the above question as a thought experiment.

Fully answering that great question is beyond the scope of this newsletter. I will deftly sidestep the role of media for a moment to note that founders are much more eager to talk about their success. In Canada at least, failure is a story they often don’t want to share.

Which makes Sampler founder Marie Chevrier Schwartz’s decision to share her story of failure stand out. On stage at SAAS NORTH, to a capacity crowd, no less.

You can read Alex Riehl’s excellent write-up of the conversation or listen to it in audio form. However, I want to highlight some things.

First is how “extremely nervous” Schwartz was during the proceeding, both understandable and underscoring how uncommon these conversations are in Canadian tech. Schwartz said one of her motivations for speaking publicly was to provide an example for others. If Canadian tech had more examples of those who survived failure, “perhaps we as a community of founders could rebound faster.”

Engaging with failure can be hard for founders whose businesses become their entire identity. Schwartz was known as ‘Marie from Sampler’ for a decade, and she noted losing that identity can be “really scary.” Holding on for too long might be worse.

Ex-Clearco CEO Michele Romanow told me once that building a business can be “like chewing glass,” and I wholeheartedly agree. But trying to chew with a smile on your face pretending everything is fine will kill you.

At the start of the COVID-19 pandemic, BetaKit took a lot of heat for reporting on company layoffs and shutdowns in a moment of great uncertainty and vulnerability. We did it anyway, because it was necessary and important. I’m not sure if dedicating the publication to stories of failure would have the effect Brice is after—again, resilience—but it’s an interesting thought experiment. 

Schwartz’s story has a silver lining, too: now the CEO of TechTO, she’s making acquisitions designed to support founders through the “extreme sport of building technology companies.” You can find that story below.

Douglas Soltys
Editor-in-chief

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TOP STORIES OF THE WEEK

Why Sampler failed, according to its founder

Could this happen to my company?

That was surely one of the questions running through the minds of the assembled tech leaders and founders attending the tell-all fireside chat between Sampler founder and former CEO Marie Chevrier Schwartz and BetaKit editor-in-chief Douglas Soltys at SAAS NORTH 2024 on Nov. 13.

(Read More)

CIFAR leader expects CAISI to inform AI policy in Canada and abroad

Launched earlier this month by Canada’s Liberal government, CAISI has been tasked with studying some of the risks associated with “advanced or nefarious” AI systems and how to mitigate them, in collaboration with other countries around the world.

CIFAR executive director Elissa Strome believes it is critical that CAISI is led by the federal government given the collaboration required between jurisdictions. “We really do very much need leadership from within the government, and policy expertise and diplomatic expertise at that table as well,” she said.

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Women VCs are now earning more at the highest levels (if they can reach them)

The compensation picture for women in VC may be reaching a tipping point in Canada—at least at the highest levels.

For the first time, women’s average salary in senior investment roles was higher than that of men, according to the 2024 Canadian Venture Compensation Report.

Though the findings provide a nugget of aspiration for women looking at VC leadership roles, data still indicates inadequate family leave policies and a drop-off of women in the highest ranks.

(Read More)

Alberta Innovates the second provincial innovation agency affected by cyberattack this year

Provincial Crown corporation Alberta Innovates experienced network issues following a cybersecurity incident that saw its network accessed by an unauthorized third party earlier this month. The provincial funding agency is now the second of its kind to be successfully breached this year.

An Invest Nova Scotia employee’s email was the subject of a phishing attack this past May, resulting in $573,000 being transferred to an imposter’s bank account in a breach that went undiscovered for two weeks.

(Read More)

It’s tech awards season in Alberta

Start Alberta spotlighted startup and venture capital leaders from across the province at the Start Alberta Tech Awards earlier this week. This year’s awards, held at Studio Bell in Calgary, celebrated leaders from firms including ZayZoon, Verano.AI, and Toast for standout deals and growth.

Meanwhile, Innovation Week YYC 2024 wrapped up with the annual Launch Party, where three of Calgary’s top 10 startups are recognized by alumni, the audience, and Alberta’s innovation minister. The Reporting Hub, Moovez, and ResVR each took home $3,000 for the Alex Raczenko Pitch Award, the Alumni’s Choice Award, and the People’s Choice Award, respectively.

DémultiplIA will connect AI startups with academic research (for a price)

DémultiplIA, a new government-funded program in Québec aims to help startups and small businesses integrate artificial intelligence into their operations. But unlike several of Québec’s other innovation-focused initiatives, this one comes with a price tag.

Applicants must be prepared to invest a minimum of $30,000 each year into these AI development projects, plus another $5,000 annually for an IVADO membership.

Additionally, five companies were chosen for the first edition of Québec Tech’s growth and scale-up initiative, Stage V, earlier this week. The service provides tailored support focused on boosting go-to-market efforts outside of Québec

(Read More)

BETAKIT’S WEEKLY ROUNDUP

VAN – FDA approves cancer-treating antibody developed by Zymeworks
CGY – Lightstrike raises $1.1M CAD pre-seed round
ON – Federal government renews Scale-Up Platform with $47.5M CAD
TOR – Noble secures $15M USD Series A round
TOR – TechTO acquires Peerscale
TOR – Intact Financial acquires home maintenance software Jiffy
OSH – NotaryPro partners with Staples Canada
OTT – More than $600,000 in prizes awarded at SAAS NORTH
MTL – BDC launches new community banking initiative

The BetaKit Podcast

The story of Sampler (live at SAAS NORTH 2024)

“In summary, Sampler lost product-market fit 10 years into running its business.”

Marie Chevrier Schwartz, founder and former CEO of Sampler, explains how her company lost product-market fit after a decade in business. Recorded live on the BetaKit Keynote Stage at SAAS NORTH 2024.

Take The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: Neuralink in Canada, Champagne in the Valley.

Take The BetaKit Quiz for Nov. 22, 2024.

Feature image courtesy Lisa Partridge of Highline Beta.

The post We need to talk about startup failure first appeared on BetaKit.

Globalive Capital’s Brice Scheschuk spoke at Highline Beta the other day (where BetaKit shares an office) about owning your startup journey.

During the presentation, he posed an interesting thought exercise: what if the tech press wrote 49 articles about company failure for every one article about fundraising success?

“In summary, Sampler lost product-market fit 10 years into running its business.”

Marie Chevrier Schwartz
Sampler founder

It’s a great question. We’re not going to dig into it fully today, but one part of the answer, at least in Canada, is that founders are much more eager to talk about their successes than their failures. They often don’t want to share that story.

This week on The BetaKit Podcast we have a story of failure. BetaKit broke news in August of Toronto-based Sampler filing for bankruptcy in June and shuttering. At the time, Sampler CEO Marie Chevrier Schwartz was not willing to talk to BetaKit—or really anyone—about what happened.

Until SAAS NORTH, where on The BetaKit Keynote Stage, she sat down with me to discuss in detail the death of Sampler: what went wrong and why it failed.

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

As Marie said on stage, she was “extremely nervous” to share this story—again, failure is not a common conversation in Canadian tech. But she also noted that if she could be an example of someone who survived that failure, “perhaps we as a community of founders could rebound faster.”

“I don’t want my legacy to be a failure without any lessons learned,” she said.

So, why did Sampler fail and what can we learn?

Let’s dig in.

PRESENTED BY

The BetaKit Podcast is presented by The BetaKit Quiz: testing your knowledge of Canadian tech.

Stay sharp on the latest news, industry insights, and key players in Canadian tech—and show off your expertise. Whether you’re a seasoned founder, a tech enthusiast, or just curious about the latest developments, The BetaKit Quiz is your weekly challenge to see how well you’re keeping up with Canada’s tech landscape.

Head over to BetaKit.com/quiz every Friday for the latest quiz, and see if you can beat your high score!

The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald. Feature image courtesy SAAS NORTH.

The post The story of Sampler (live at SAAS NORTH 2024) first appeared on BetaKit.

Could this happen to my company? 

That was surely one of the questions running through the minds of the assembled tech leaders and founders attending the tell-all fireside chat between Sampler founder and former CEO Marie Chevrier Schwartz and BetaKit editor-in-chief Douglas Soltys at SAAS NORTH 2024 on Nov. 13. 

“In hindsight, [the pandemic] made me, as a leader, ultimately ignore some of the fundamentals of the business that were very difficult.” 

Marie Chevrier Schwartz
Sampler founder

On The BetaKit Keynote Stage at SAAS NORTH, an “extremely nervous” Schwartz unpacked the factors that led to her decade-old business folding after filing for bankruptcy earlier this year. 

Schwartz, who had not spoken publicly on Sampler’s shuttering until after BetaKit’s story in August, told the SAAS NORTH audience she had decided to tackle the stigma surrounding failure. She hoped to let everyone in attendance know that they’ll likely fail at some point too—and that’s OK.

RELATED: Sampler files for bankruptcy

“In my reflection, I realized that if I was feeling lonely, and 80 to 90 percent of businesses fail, then there’s a lot of people who have felt lonely, and a lot of people who will feel lonely,” she said. “If I could be an example of someone who survived through that failure, perhaps we as a community of founders could rebound faster [in the future.]” 

“I’m using failure with intent today, because I don’t want to be ashamed of saying failure,” Schwartz added. “In many ways, it’s not a failure. But people might label it as that, and I think that’s OK.” 

Product-market fallout

Founded in 2014 and based in Toronto, Sampler created a digital platform for product samples of consumer packaged goods (CPGs). Working with clients like Unilever and L’Oreal, and retailers like Kroger, Sampler reached 4.5 million users across Canada and the United States, with 1,000 CPG brands and agencies as customers and $10 million in annual recurring revenue. At the date of its bankruptcy filing, Sampler had total liabilities of $12.9 million and total assets of more than $300,000. 

Addressing the attentive crowd, Schwartz detailed what went wrong at the company. From her perspective, Sampler suffered from a series of market shifts from which it could not recover. 

“In summary, Sampler lost product-market fit 10 years into running its business.”

Schwartz noted the COVID-19 pandemic “significantly accelerated” Sampler’s business initially as consumers moved away from brick-and-mortar stores and squarely into its domain of online retail. The former CEO said she took this as a signal to significantly invest in the business and gear up for international expansion, but acknowledged it likely wasn’t the right move. 

“In hindsight, [the pandemic] made me, as a leader, ultimately ignore some of the fundamentals of the business that were very difficult,” Schwartz said. She added that, while Sampler positioned itself as a Software-as-a-Service (SaaS) company for the sake of fundraising, the company was ultimately beholden to the constraints of the physical, not digital world—namely, shipping and logistics.  

“At the end of the day, we had something like a 35 to 40 percent margin. We had very difficult unit economics,” she confessed.

In the midst of a pandemic-fuelled surge in demand, the low margins didn’t matter as much. But when the global supply chain crisis impacted Sampler’s CPG customers, the reality was laid bare. As boats full of goods sat in ports, CPG brands were missing key ingredients for their products, Schwartz explained. If a potato chip manufacturer couldn’t stock shelves with product, they weren’t going to provide samples. 

Sampler continued to see growth until it was hit with the higher shipping costs that followed in the pandemic’s wake. The United States Postal Service increased Sampler’s delivery costs by 200 percent, according to Schwartz, eating further into the company’s margins. As the world began to open back up Sampler’s customers were then very eager to return to in-person shopping.

“All of us wanted to go pick our veggies again, so that was bad for the business,” Schwartz said. “In summary, Sampler lost product-market fit 10 years into running its business.” 

No runway

Amid these troubles, and one year before declaring bankruptcy, Sampler became a buyer to try and expand its business while courting a Series B funding round to extend its runway. 

Sampler acquired beauty industry digital sampling agency Abeo in April 2023 to strengthen its underperforming beauty category and accelerate its expansion into Europe and the United States. The company’s second acquisition, AdMass, came three months later. The artificial intelligence-powered software was meant to help brands and their agencies create data-driven, user-generated content promotions. Sampler hoped it could start leveraging its large dataset to monetize new features following a more conventional SaaS business model that Schwartz hoped would provide the company higher margins.  

“We were very confident that the strategy would hit traction fast enough for us to raise our next round,” Schwartz said before taking a short beat. “We were unable to raise the next round.” 

Schwartz said her investors were with her “in the trenches,” sending her meals and offering to hire a nanny as she tried to juggle her company’s woes while expecting a baby. The CEO also made clear to the audience that it was her responsibility to find new investors who would get her company to the Series B level. But the market demand wasn’t there, and Schwartz claimed she was fundraising while a “huge exit” of venture capital from the CPG space was taking place. Ultimately, all those factors together signalled that her business was no longer viable. 

“The next day there’s nothing.”

Toward the end of the conversation, Schwartz acknowledged that she wasn’t the only one affected by Sampler’s failure, noting its impact on investors, partners, and employees. She detailed how it felt to lose everything she built her professional identity around, while navigating the confusing process of bankruptcy.

“What happens in bankruptcy is that, one day, you have everybody working together, and then the next day there’s nothing,” she recalled. “Your email gets shut down. You have to return your laptop, it’s gone.” 

“You don’t have any funds left, right?” Schwartz later added. “So you can’t pay the lawyer, you can’t pay the accountant, your investors are in a conflict and so, frankly, there’s just nothing for you to find.”

Schwartz noted that being open about Sampler’s failure has helped create a support network as rediscovers her passions. Now the CEO of tech community organization TechTO, she’s dedicating her time to supporting those taking on “the extreme sport of building technology companies.”  

Schwartz currently has at least one person per week asking for her help navigating the unspoken parts of the bankruptcy process, reinforcing that Sampler’s struggles are not an isolated incident in Canadian tech. She is working with “a few folks” on a project to help make that process easier to understand, and made a pitch to accounting or law firms in attendance at SAAS NORTH for their support. 

Soltys concluded the conversation with one more prompt for introspection, asking Sampler’s former CEO what she would say to the Marie Chevrier Schwartz of 2013. 

“You are going to come out of this the wealthiest person ever,” Schwartz concluded, taking another beat. “In experience.”

Images courtesy SaaS North.

The post Why Sampler failed, according to its founder first appeared on BetaKit.

Last week when Power Corp. revealed it had marked up the valuation of its controlling stake in Wealthsimple, BetaKit reported that Power’s Q3 financial results indicated the Toronto FinTech giant was engaged in a third-party secondary transaction expected to close during the fourth quarter. At the time, Wealthsimple declined to share further details.

“We wanted to give [employees] the opportunity to sell some of the equity they’ve earned and gain additional financial flexibility.”

Diana McLachlan,
Wealthsimple 

Today, The Globe and Mail reported that this deal saw existing, San Francisco-based Wealthsimple investor Iconiq Capital purchase about $100 million in stock from the challenger bank’s current and former employees. Iconiq is a family office that caters to many of Silicon Valley’s elite, including Mark Zuckerberg, Sheryl Sandberg, and Chamath Palihapitiya.

A Wealthsimple spokesperson told BetaKit that current and former employees were the only selling shareholders in this transaction, but declined to confirm Iconiq’s involvement or the size of the deal. 

They did confirm, however, that the financing valued Wealthsimple at $5 billion, which makes it one of Canada’s most valuable private tech companies once again, alongside a group that includes fellow late-stage Canadian tech firm Clio, a British Columbia-based legaltech that recently conducted a sizeable secondary financing of its own.

“Our employees are the driving force behind Wealthsimple’s success,” Wealthsimple vice-president of people operations Diana McLachlan told BetaKit. “We wanted to give them the opportunity to sell some of the equity they’ve earned and gain additional financial flexibility. Our 10-year track record of success is due to the dedication of our employees and the trust we’ve earned from millions of Canadians.”

Iconiq appears to have increased its stake in the Canadian FinTech company shortly after one of its high-profile clients referred to Canada as “no longer a compelling place to invest” in a post on X (formerly Twitter) responding to a comment from Canadian Prime Minister Justin Trudeau about Canada’s competitiveness with the United States as an investment environment.

“Here is the harsh truth as someone who allocates capital in different parts of the world: Canada is no longer a compelling place to invest,” Social Capital founder and CEO Chamath Palihapitiya wrote. “Hasn’t been for a few years now. As a result, the economic prosperity of Canada will continue to shrink. This is despite an incredibly young, bright, capable and technical workforce that is second to none.”

Founded in 2014, Wealthsimple started as a robo-advisor but has since steadily expanded its investment capabilities and moved into other areas of money management, including spending and saving, crypto, taxes, and peer-to-peer payments. 

RELATED: Power marks up value of Wealthsimple beyond 2021 peak

This marks Wealthsimple’s first secondary since 2021, when it announced a $750-million funding round that included Iconiq, consisted of $250 million in primary and $500 million in secondary capital to Power and its affiliates, and came at a $5-billion valuation. With Power’s latest markup and this secondary deal, Wealthsimple has regained the value it had lost on paper when Power and its affiliates slashed their valuations of the company during the downturn.

Today, the 10-year-old company is profitable with three million users and $58 billion in total assets under administration. Wealthsimple co-founders, CPO Brett Huneycutt and CEO Michael Katchen, recently joined The BetaKit Podcast to discuss the company’s journey, its growth of late, and how they plan to build “the largest Canadian financial institution.”

Feature image courtesy Wealthsimple.

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The United States Food and Drug Administration (FDA) has approved the use of a cancer-treating antibody originally developed by Vancouver-based biotech company Zymeworks.

Dublin, Ireland-headquartered Jazz Pharmaceuticals announced this week that the FDA had approved use of Zihera, an antibody that treats adults living with a form of biliary-tract cancer, in the US. In 2022, Jazz Pharmaceuticals secured the commercialization rights to Ziihera for use in North America, Europe, and Japan in a deal worth $375 million USD upfront, with additional royalties based on net sales.

Zihera (generic name zanidatamab) is a non-chemotherapy treatment for patients with metastatic HER2-positive biliary tract cancer, a form of cancer that originates in the bile ducts, gallbladder, or nearby structures and has spread to other parts of the body.

In Western countries, including Canada, the incidence of this rare and deadly cancer is approximately two per 100,000 individuals. In a statement, Jazz Pharmaceuticals executive vice president, global head of research and development, and chief medical officer Rob Iannone said the metastatic form of the disease has a five-year survival rate of under five percent.

In a statement, Jazz Pharmaceuticals said the FDA approval was granted based on results from a Phase 2b trial, in which 52 percent of participants experienced significant tumour shrinkage, with benefits lasting an average of 15 months.

Ali Tehrani, co-founder and former president and CEO of Zymeworks, shared his elation over the FDA approval in a LinkedIn post this week. “Back in 2003, when I co-founded the company, this was the dream that many said was not possible,” Tehrani wrote. “Today it became reality—most importantly for patients who will benefit from it.”

RELATED: AbCellera’s antibody treatment becomes first to receive emergency FDA approval for kids under 12

Tehrani co-founded and led Zymeworks for over 18 years, taking the company through clinical validation and an $80-million CAD New York Stock Exchange debut. 

A report in The Globe and Mail this week noted that Zymeworks hit a rough patch in 2022 following disappointing results from one of its flagship drugs. That same year, Tehrani departed the company and joined life sciences venture firm Amplitude Ventures, where he remains a partner.

Under subsequent CEO Kenneth Galbraith, Zymeworks thwarted a hostile takeover attempt from All Blue Capital in June 2022 by adopting a poison-pill strategy and relocating its headquarters to Delaware, as reported by Reuters. 

Zymeworks’ stock, which hit a low of $4.87 USD in April 2022, has since rebounded to $14.22 USD as of press time.

Feature image courtesy Unsplash. Photo by National Cancer Institute.

The post FDA clears drug for rare and deadly GI cancer developed by Canadian firm Zymeworks first appeared on BetaKit.

It’s tech awards season in Alberta as Innovation Week YYC 2024 wrapped up on Thursday with the annual Launch Party, where three of Calgary’s top 10 startups are recognized by alumni, the audience, and Alberta’s innovation minister. 

Coming on the heels of the 2024 Start Alberta Tech Awards earlier this week, Launch Party is meant to showcase the region’s best new tech companies for investors, entrepreneurs, government, and the technology sector. The event is produced by local incubator Platform Calgary. 

The Reporting Hub, Moovez, and ResVR each took home $3,000 for the Alex Raczenko Pitch Award, the Alumni’s Choice Award, and the People’s Choice Award, respectively.

The Reporting Hub is a no-code white label business intelligence platform that claims to have over 50,000 daily active users. Its dashboard displays financial reporting, operations summaries, and key performance indicators. The Reporting Hub was selected for this award by a panel of judges that included Government of Alberta Technology and Innovation Minister Nate Glubish, Alberta Innovates, Cumberland Wealth, and Launch Party Top 10 alumni. The award commemorates the memory of its namesake, Alex Raczenko, a beloved mentor and pitch coach in Calgary’s startup community who died in 2017. 

Moovez (pronounced “Move-Easy”) is a gig-economy app similar to Uber, but  for moving and delivery services. With the Moovez mobile app, users select how many movers they require for a job, the required type of vehicle, and the load size. Movers then show up at a scheduled time and users can track the delivery as it’s happening. As its name suggests, The Alumni Choice Award goes to “an innovative and quickly-growing Calgary startup” as selected by Launch Party alumni and an investor. 

RELATED: Leaders from ZayZoon, Verano.ai, Toast recognized at 2024 Start Alberta Tech Awards

Finally, People’s Choice Award recipient ResVR offers software for homebuilders to showcase and personalize homes before they are constructed. ResVR allows homebuilders to depict and quickly modify a house rendering, changing the finish of flooring, countertops, and other variable elements within a home to a customer’s liking. ResVR was selected for this award by attendees voting at Launch Party.

The three award winners are part of the Launch Party Top 10 Startups list as chosen by Launch Party alumni. This year’s selection committee consisted of Calgary Innovation Coalition director Haley Jabusch, MedEssist co-founder and CEO Joella Almeida, and Communal co-founder Matt Elliott. 

The remaining top 10 companies include: geospatial intelligence platform BigGeo; AI document reviewer Binoloop; AI job search and resume assistant Job Autopilot; scholarship matchmaker platform Scholarships Cafe; construction management tool SitePhotos; identity authentication solution TechJutsu; and landlord-focused revenue management platform TraceRent. 

Feature image courtesy Launch Party. Photo by Rad Creative.

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A new government-funded program in Québec aims to help startups and small businesses integrate artificial intelligence (AI) into their operations. But unlike several of Québec’s other innovation-focused initiatives, this one comes with a price tag.

DémultiplIA, offered through the Institute for Data Valorization (IVADO), will select 15 startups and small-to-medium enterprises (SMEs) every year and support them in integrating AI into their business models. IVADO, a joint venture between the three postsecondary institutions HEC Montréal, Polytechnique Montréal, and the Université de Montréal, acts as a bridge organization between industry and academia with a focus on data science and AI. 

“The ultimate goal is to help growing SMEs and startups strategically integrate R&D into their development through our academic AI research ecosystem, one of the best in the world,” Gabrielle Langlois, head of the DémultiplIA program, wrote in an email to BetaKit.

With its network of over 2,000 AI researchers, IVADO hopes to help startups tap into the province’s AI expertise. The organization will connect chosen startups and SMEs with research groups and AI labs to complete R&D projects that may seem like too large of an investment for startups looking to commercialize. 

Applicants must be prepared to invest a minimum of $30,000 each year into these AI development projects, plus another $5,000 annually for an IVADO membership.

However, the program comes at a cost: applicants must be prepared to invest a minimum of $30,000 each year into these AI development projects, plus another $5,000 annually for an IVADO membership.

Through the support of IVADO, the $90,000 invested may be matched or added to by the myriad other financing programs available in Québec. For example, Mitacs and Partenar-IA are available funding partners for startups selected for DémultiplIA.

The $5,000 annual membership to IVADO includes access to a pool of mentoring hours with entrepreneurs at Montréal-based incubator Centech, as well as $8,500 in scholarship money to collaborate with MBA students at HEC Montréal for advisory projects. It also includes customized training and scientific mentoring hours through IVADO’s academic network.

DémultiplIA is targeted towards AI startups in the commercialization stage, Langlois explained, as well as SMEs hoping to create new products that integrate AI. The program is open to AI startups as well as non-AI startups, but the latter must have adequate quality data to advance a project. 

In a LinkedIn post, co-founder and director of Canadian Investors / Venture Impact Coalition (CIVIC), Sylvain Carle, said that the program is a “nice additional option” in the market. However, he pointed out that investing at least $105,000 over three years may not be an attractive prospect for early-stage entrepreneurs. 

“It’s clearly not an offer for early-stage startups,” Carle wrote in French. 

The DémultiplIA program, for example, lists “between $200,000-$500,000” as the middle annual income band on its application form. Séraphin Hochart, co-founder and CTO of FrancoFlex, says this reflects the lack of accessibility among many of Québec’s government-funded innovation programs, particularly for early-stage companies. 

“It’s a chicken and egg problem where you need research to grow but you need to grow to get research,” Hochart told BetaKit. 

Seed-stage companies in Québec had a particularly difficult time raising money in Q3, according to a joint CVCA and Réseau Capital report. 

RELATED: Report: Québec VC  funding continues downward spiral in Q3 2024 but shows early-stage promise 

The provincial Ministère de l’Économie, de l’Innovation et de l’Énergie (MEIE) granted IVADO $8 million in funding over three years in May for the development of AI innovation programs, some of which will be put towards DémultiplIA. 

Unveiled in early November, the program’s goals of connecting academics in AI research with startups in their commercialization stages align with the MEIE’s goals. Minister Christopher Skeete, who is responsible for the innovation portion of MEIE’s portfolio, recently told BetaKit that a disconnect between academia and industry is part of Québec’s innovation problem. 

AI adoption also often comes with a significant environmental cost. However, when asked whether IVADO will ensure that AI-related carbon emissions are mitigated, Langlois said this is one of the “key topics” IVADO plans to address through their customized training program for the chosen entrepreneurs. 

“We encourage companies to consider the environmental impact of their AI initiatives and provide guidance on how to optimize AI-related processes to minimize carbon emissions,” Langlois wrote.

Applications for the program close on Dec. 8, and winners will be announced by Dec. 16. 

Feature image courtesy IVADO.

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Tech moves fast, and keeping up means constantly upskilling. Over the past two years, roles in automation, artificial intelligence, and machine learning have skyrocketed in demand.

According to the 2024 Annual Work Trend Index from Microsoft and LinkedIn, which surveyed 31,000 people in 31 countries, two-thirds of leaders said they wouldn’t hire someone without AI skills 

Five roles across Canada to apply for today

• Remote Senior Full Stack Engineer, SyncWith, Canada
• Unicorn Leadership Trainer, Unicorn Labs, Ottawa
• Network Administrator, City of Yellowknife, Yellowknife
• Product Manager (Canada), TCL North America, Markham
• Fullstack Developer Consultant, Webisoft, Canada 

Meanwhile, the World Economic Forum’s ‘Future of Jobs’ report estimated that while automation may displace 85 million jobs, it will create a staggering 97 million new positions.

No matter what industry you work in,automation and machine learning are reshaping processes, workflows, and overall workplaces. Success in today’s job market comes down to learning the skills that employers can’t afford to ignore.

Here are three ways you can thrive in the current and future job market. 

Adopt a growth mindset 

Resisting change for the change’s sake will stagnate your career. While the term ‘growth mindset’ may give you the ick, a closer look at its meaning cuts past the bluster of business influencers on LinkedIn, and passive income advocates selling low-quality, AI-generated PDF guides on Instagram. 

American psychologist Carol Dweck popularized the idea of a growth mindset, and argues that people are more likely to succeed if they think they can improve their skills by work, education, and persistence.

This could be as simple as reframing challenges as opportunities, and being more fluid when it comes to learning opportunities. 

You don’t need to complete formal education in a topic to be proficient in it, and you certainly shouldn’t wait for company-mandated AI training. 

Professionals with a growth mindset learn by doing, by collaborating with others, and by really listening in the company’s all-hands and town halls. They also subscribe and listen to industry podcasts, actually attend the online webinars they sign up to, and travel to industry conferences. 

Pick one to do this week, and then make expanding your horizons a weekly to-do. 

Learn at your own pace

You don’t need to drop everything and start an MBA to upskill meaningfully. 

Depending on your area of focus, sites and companies like Datacamp, Coursera, LinkedIn Learning, edX, Udemy, Google, and Hubspot all offer courses you can complete at your own pace.

Some of these modules and courses can be completed in a relatively short time, but give valuable and niche insights into leveraging AI for your particular needs. 

Many of these platforms are gamified or split into bite-sized modules, allowing workers to stay current with emerging trends without disrupting their current work schedules.

Time to network

As well as being a place to glean industry-specific insights, conferences are also a place to network. 

We know, we know, no one likes networking. But as AI and automation change the types of jobs that are available, soft skills like relationship building and collaboration are set to become all the more important.

AI is also moving so fast that leaders and builders often step up to help each other by sharing what’s worked, and more crucially, what hasn’t. This makes networking in AI a little less cringeworthy than general networking.

If you’re not in a location where in-person networking is possible, don’t forget you can meet people online, through courses, webinars, and workshops. 

Many organizers of these events encourage interactions outside the set event hours, and attendees frequently share links to GitHub READMEs, projects, and portfolios so attendees can continue the conversation afterwards.

And perhaps the biggest perk of networking? Hearing about job opportunities that haven’t been posted—or might never be.

Another great place to look is BetaKit’s Job Board, which is tailored for Canadian tech professionals and features roles from the country’s leading tech firms. 

Ready to find your next tech challenge? Visit the BetaKit Job Board today

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Oshawa, Ont.-based legaltech software startup NotaryPro has partnered with Staples Canada to bring its notarization services to the office supply retail company’s website and stores.

The partnership will allow Canadian individuals and businesses to complete online notarization using NotaryPro’s software. On Nov. 18, Staples stores across Canada began introducing online terminals where customers can connect with a notary on demand. Users can also get documents notarized directly from the Staples Canada website.

NotaryPro’s partnership with Staples Canada follows the legaltech startup’s expansion to Québec.

“By partnering with NotaryPro, we’re making notarization services faster, more accessible, and convenient,” Ryan Mair, chief services officer at Staples Canada, said in a statement. “This collaboration allows Canadians to handle their important legal and business documents with ease, saving them valuable time and providing the trusted service they deserve.”

Notarization refers to the process of verifying the authenticity of a document, such as a legal name change application, statutory declaration, insurance claim, or residency document. This process, which requires a notary public—an individual who can act as an official witness—and is typically conducted at a notary office, is aimed at preventing fraud and ensuring a document’s validity for legal purposes. 

Founded in 2016 by CEO and general counsel Robert Onley, NotaryPro offers online and in-person notary public and commissioner of oath services. The startup operates a network of notaries, and has partnerships with companies like Willful, LegalWills, and Epilogue that help customers create and notarize wills.

The startup’s software is aimed at making the notarization process more accessible and convenient by allowing customers to notarize documents from home, avoiding travel and wait times.

NotaryPro’s software offering includes a legal document creator, live document drafting, and “virtual wet ink” will and power of attorney signings. Using NotaryPro’s online service, individuals and businesses can upload a document to the platform by either uploading, or scanning and digitizing documents with a QR code. 

RELATED: Legaltech startup Alexi looks to ramp up hires with $15 million CAD in new funding

They can then join a virtual appointment with a notary, sign the document in front of a notary using a digital e-signature, and receive the notarized document immediately after the appointment. The startup claims the entire process can take roughly seven minutes.

NotaryPro’s online notarization services cost users $38.95, while in-person notary services cost $40.95, and online will and power of attorney notarization cost $174.95. The startup claims it has served over 350,000 customers across Canada to date, which includes over 1,000 corporate clients.

NotaryPro’s recent partnership follows the startup’s expansion into Québec. According to the service area page on NotaryPro’s website, its service is also available in Ontario, British Columbia, Alberta, Nova Scotia, Saskatchewan, and Manitoba.

As part of the Québec expansion, NotaryPro also launched its in-person notary services at multiple locations across the province through a partnership with notary firm Réseau Notaires. In a statement issued earlier this month on the launch, NotaryPro’s chief revenue officer Charles Segal noted that the firm has intentions to expand its service beyond Canada.

“Our partnership with Réseau is the next step in our mission to make these services simpler, faster, and more accessible across Canada—and soon, globally,” Segal said.

Feature image courtesy Unsplash. Photo by Sollange Brenis.

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The Business Development Bank of Canada (BDC) has launched a new community banking initiative it says will help grow the number of small business owners that can access financing. 

Through BDC Community Banking, the Crown corporation is looking to partner with more than 80 community-based lending organizations to provide new financing and advisory capabilities to entrepreneurs who need more support. These include business owners that live in rural or remote areas, have little credit history, are from younger age groups, or have “unconventional business models.” 

“They get the best of both worlds, the community groups that know and support them best and the financial weight of BDC behind them.” 

Adil Hassam
BDC

BDC will back the selected partners with co-lending, indirect lending, loan guarantees, and advisory services. BDC currently has less than ten Community Banking partners, which include Futurpreneur, the Federation of African Canadian Economics, and Québec City-based Evol. 

By combining the know-how of local organizations and its expertise in financing and advice, BDC claims it is aiming to help up to 100,000 small business owners access new financing in the next 10 years. 

BDC said the community banking initiative is part of an effort to reverse a decades-long decline in entrepreneurship.  According to a 2023 BDC report, there are 100,000 fewer Canadian entrepreneurs in the country now compared to the year 2000, despite a population increase of more than 10 million in the same timeframe.

“What we’ve seen so far from working with organizations such as Futurpreneur, Evol, and [the National Aboriginal Capital Corporations Association] is that by working together, it creates an exponential impact for entrepreneurs,” BDC’s vice-president of Community Banking, Adil Hassam, said in a statement. “They get the best of both worlds, the community groups that know and support them best and the financial weight of BDC behind them.” 

RELATED: Why are there 100,000 fewer Canadian entrepreneurs?

The Government of Canada’s last legislative review of BDC—which covered between 2010 and 2022—called for the bank to take more risks to finance underserved entrepreneurs. Since then, BDC has launched big new funds for women and Black and Indigenous entrepreneurs.

While BDC has previously leaned on partner organizations to source investments, such as its Thrive Lab initiative, the difference with community banking lies in its indirect approach, Miguel Barrieras, BDC’s chief community banking and impact officer, told BetaKit in an email statement. While programs like Thrive Lab have partners source and recommend businesses for BDC to directly invest in, the spokesperson said Community Banking will support small businesses indirectly through a network of partners. 

“Canada’s economy needs more support, now more than ever, and there’s not a minute to waste,” Barrieras said. “By working with our 80 partners, we can do it faster and better.” 

Feature image courtesy BDC.

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For the seventh year, Start Alberta spotlighted startup and venture capital leaders from across the province’s tech ecosystem at the 2024 Start Alberta Tech Awards.

 Since 2018, the awards have been given out across 11 categories, including women in tech, deals, service, and impact. This year’s awards, held at Studio Bell in Calgary, celebrated standout deals and fastest growing companies from this year, while also highlighting the province’s early-stage ventures.

The A100’s One to Watch award recognizes an early-stage company that is “most likely to succeed” by the Alberta tech community. It is chosen by A100 charter members. This year, Calgary-based Verano.AI won the coveted title.

Founded by president Clay Swerdelian and product manager Hugo Kiqumoto, Verano.AI develops artificial intelligence (AI)-powered compliance software for regulated industries. The company has inked partnerships with firms like Deloitte and ServiceNow, and recently completed the Creative Destruction Lab’s Rockies accelerator. Swerdelian, a five-time founder, was also granted the Most Promising Founder award by Start Alberta.

“Winning the A100 One to Watch award means that people are noticing what we’re doing,” Swerdelian said in a statement. “We’ve done a very good job in the last 12 to 14 months, trying to be anywhere and everywhere we can. We’re on a pretty quick trajectory.”

Scaleup of the Year, which goes to a later-stage company deemed to have a positive impact on the Alberta tech ecosystem, went to Calgary-based FinTech firm ZayZoon. The startup offers a platform that allows workers to receive a percentage of their wages before their employer’s weekly, bi-weekly, or monthly payday.

RELATED: Earned wage startup ZayZoon returns its services to Canada

In a statement, Start Alberta said the startup’s founders, CEO Darcy Tuer, president Tate Hackert, and CFO Jamie Ha, have made “significant contributions” to the local tech sector through both mentorship and speaking engagements. Tuer noted that the founders were inspired by this award’s previous winners, which include Benevity and Solium.

“They inspired us to take a risk,” Tuer said in a statement. “So by way of winning this award, we hope that we’re inspiring future entrepreneurs to do the same.”

Start Alberta’s Deal of the Year award goes to the company that raised the largest funding round between Oct. 1, 2023 and Sept. 30, 2024. That deal went to cleantech company ClearSky Global, which closed $168 million USD in June. ClearSky’s nine-figure funding round has since been topped by previous Start Alberta awardee Neo Financial, which this month closed $360 million CAD in Series D financing.

The Impact Award, reserved for the company that demonstrates their commitment to Environment, Social and Governance standards, went to Christa Hill, co-founder of coaching platform Tacit Edge. In a statement, Start Alberta said Hill takes “an active role in helping shape a more linear and inclusive pathway to product management careers for women and visible minorities.” 

RELATED: George Damian named new executive director of the Venture Capital Association of Alberta

Jana Rieger, CEO and co-founder of medtech startup True Angle, won the Women in Tech award, which recognizes women’s entrepreneurial success. Rieger’s startup focuses on wearable solutions to enhance health and wellness through biofeedback technology. Its first product, which aims to support those living with swallowing disorders, has been implemented in over 50 clinics in the United States.

The Digital Talent Champion award, which recognizes companies or people that are developing the talent ecosystem, went to Toast’s co-founder and chief growth officer April Hicke and co-founder and CEO Marissa McNeelands. Toast offers a professional development platform that serves 1,500 women in the tech sector.

RELATED: The gender pay gap in Canadian tech has tripled

Also at the award show, Pierre Lemire, CEO of Kent Imaging, was named Leader of the Year, while Jacques LaPointe, founding director of Metiquity Ventures, picked up Investor of the Year. Pierre Doyon, who runs the Venture Mentoring Service of Alberta, took home the VCAA’s Rod Charko Service Award.

Ha Nguyen, partner at McRock Capital and co-founder of recently launched Migr8, was named Ecosystem Supporter of the Year at the event. Nguyen launched Migrat8 to provide venture funding and resources to support immigrant entrepreneurs in the province’s tech sector.

“I wanted to create a system to welcome brilliant entrepreneurs from all over the world, making them feel valued and supported, just as I have felt since coming here,” Nguyen said. “In Alberta, diversity may not be the first thing people see, but it’s here and it’s powerful.”

Feature image courtesy Start Alberta via LinkedIn.

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Health Canada has given the all-clear for Neuralink, the Elon Musk-owned brain implant technology company, to launch a clinical trial in the country. 

The trial is currently seeking individuals with limited or no ability to use both hands.

Neuralink first opened a Canadian patient registry in anticipation of approval this past March. The investigational medical device trial, dubbed the Canadian Precise Robotically Implanted Brain-Computer Interface (CAN-PRIME), is the first for the company outside of the United States. 

In a statement, The University Health Network (UHN) said the implantation procedure for CAN-PRIME would be exclusively performed at the Toronto Western Hospital by a multidisciplinary team of neurosurgeons, neuroscientists, and medical experts. 

Neuralink’s wireless brain-computer interface (BCI) is implanted into the part of a patient’s brain that is responsible for movement, which the company claims can interpret brain signals so that patients can control a computer or smartphone just by thinking. 

The four-year long study is currently evaluating the safety and effectiveness of the implant as well as the associated surgical robot and software. The trial is currently seeking individuals with limited or no ability to use both hands due to a cervical spinal cord injury or amyotrophic lateral sclerosis (ALS). 

RELATED: H|T: The Healthtech Times – Neuralink encounters its first problem in a human patient

“This landmark surgery has the potential to transform and improve outcomes for patients who previously had limited options,” UHN’s CAN-PRIME study lead Dr. Andres Lozano said in a statement. 

Neuralink has been actively sharing updates of its trial in the United States, which currently has two participants. Noland Arbaugh, the first-ever Neuralink patient, has been public about his positive experience with the BCI, granting him the ability to play games such as chess and Sid Meier’ Civilization VI on his computer. 

Arbaugh did experience a setback earlier this year when the device’s wires retracted unexpectedly leading to data loss, which Neuralink said it remedied by recalibrating the BCI’s sensitivity. Neuralink said it took measures to avoid the wire retraction issue in its second patient. 

Feature image courtesy Neuralink.

The post Elon Musk-owned Neuralink receives permission to recruit for Canadian medical trial first appeared on BetaKit.

Provincial Crown corporation Alberta Innovates experienced network issues following a cybersecurity incident earlier this month. 

“As our investigation unfolds, we’ll know more.”

Dwayne Brunner
Alberta Innovates

As first reported by The Canadian Press, Alberta Innovates spokesperson Dwayne Brunner told BetaKit in an email statement that the network issues were quickly resolved and are being investigated with help from cybersecurity experts. He added that the incident involved unauthorized access to the Alberta Innovates network by a third party. 

“The privacy and security of the information we hold are our top priority, and we are working closely with cybersecurity experts, our employees, and our customers,” Brunner said, declining to share more information. “As our investigation unfolds, we’ll know more.”  

Alberta Innovates is tasked with supporting innovation in the province through funding programs. As of October 2023, the organization said it managed nearly 1,300 projects in a portfolio valued at $1.33 billion. 

The provincial funding agency is now the second of its kind to be successfully breached this year. 

An Invest Nova Scotia employee’s email was the subject of a phishing attack this past May, resulting in $573,000 being transferred to an imposter’s bank account in a breach that went undiscovered for two weeks. 

RELATED: Invest Nova Scotia has recovered most of stolen funds following summer scam

In response, the agency worked with the Department of Justice to recoup the funds from a frozen RBC account associated with the breach. Last month, Invest NS told BetaKit it had recovered the majority of the stolen funds barring an “outstanding gap” of $2,500. 

Jonathan Gauthier, press secretary for Alberta Technology and Innovation Minister Nate Glubish, told The Canadian Press that the ministry is aware of the Alberta Innovates incident and that its cyber team is providing assistance as needed. BetaKit reached out to Gauthier for comment but did not hear back by press time. 

Alberta Innovates has also gone through some executive changes this year. Board chair Tony Williams announced in June that Laura Kilcrease was no longer CEO, effective immediately. A few days later, Williams appointed Michael Mahon as interim CEO on a one-year term. Williams said the leadership change came as the agency was “charting a new course,” adding that new skills and perspectives would be integral to developing a new strategic plan. 

Feature image courtesy Alberta Innovates.

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Toronto-based digital asset issuance platform Noble has secured $15 million USD in Series A financing led by San Francisco-based cryptocurrency investment firm Paradigm.

The blockchain startup’s round also saw participation from a slew of other Web3 investors, including Polychain, Foresight Ventures, Wintermute Ventures,​ Toronto’s Informal Systems, and undisclosed angels from Celestia, Skip Protocol, Succinct, and Conduit. It brings Noble’s total funding to $18.3 million.

The collapse of Terra and its Luna stablecoin in 2022 spurred the launch of Noble.

Stablecoins are cryptocurrencies whose value is pegged to a commodity or fiat currency such as the United States dollar. Noble helps stablecoin issuers go directly to blockchain builders and application developers and distribute their products more efficiently across the Cosmos ecosystem.

Noble said it plans to use this funding to develop products that encourage stablecoin adoption and launch its own stablecoin, the Noble Dollar.

The startup was founded in 2023 by CEO Jelena Djuric, COO and CFO Stefan Coolican, and CTO John Letey. Djuric, who previously worked at Informal Systems, is also the co-founder of crypto advocacy group the Canadian Web3 Council, while Coolican previously served as president and CFO of Toronto-based Ether Capital and director of investment banking at Toronto’s Cormark Securities.

In a blog post, Djuric wrote that the collapse of Cosmos-based Terra and its Luna stablecoin in 2022 spurred the launch of Noble. Terra’s fall shocked the crypto world, helped trigger a prolonged bear market in the sector, and caused a liquidity crisis in Cosmos that hindered its ability to compete with other blockchain ecosystems like Ethereum. “I saw the carnage first hand,” Djuric wrote.

In the aftermath, Djuric wrote that application-specific blockchain (appchain) developers have faced difficulty building scalable businesses given “dried-up stablecoin liquidity, a lack of on and off ramps, and the complexity, cost, and fragmentation of competing custodial bridging solutions.”

“It became clear the status quo for stablecoin routing wouldn’t work in a highly fragmented crypto economy driven by many appchains,” Djuric added. “So … we set out to create a stable, secure and durable asset issuance platform that would make blue chip stablecoin issuers comfortable with the appchain ecosystem.”

Over the past year, Noble claims that it has facilitated over $5 billion in volume and attracted more than $450 million in assets issued by players like Circle, Ondo Finance, Hashnote, and Monerium. Today, the company claims that its platform connects over 50 applications through a single-click workflow.

Feature image courtesy Noble.

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Calgary-based Lightstrike, which provides an artificial intelligence (AI)-powered tool to map the connections between enterprise applications, has raised $1.1 million CAD in pre-seed funding as it looks to expand its North American presence. 

The all-equity round closed on Halloween and was led by Edmonton-based Sprout Fund with participation from Connecticut-based The Binnacle Group, Weave VC, and two Alberta-based family offices. A number of angel investors also participated, including founding team members from RobinHood, EY Comply, and ACT Airlines CEO and chairman Daglar Çizmeci. 

“They helped us nail a truly differentiated product market fit in a very complex and competitive market.” 

Vernon Briggs
Lightstrike

Lightstrike was founded earlier this year by CTO James Cuff and CEO Vernon Briggs, both leaders of Calgary-based IT services company Fliwheel.

Briggs told BetaKit in an email statement that Fliwheel created the opportunity for Lightstrike, and as the co-founders take its product “out into the world in earnest,” the startup will be acquiring the duo’s former company and incorporating its tech team into Lightstrike.  

Lightstrike “ingests” the source code of corporate applications, labels inter-app interactions, and then maps them. Briggs explained that this map displays the dependencies between applications to help prevent cascading application and system failures. 

“Application and Platform failures are increasing in size, magnitude, complexity, and economic impact on customers and (in the case of CrowdStrikes failures) economies,” Briggs said in an email statement. 

Users can also prompt Lightstrike’s large language model, which leverages AWS and Azure, in plain English to find or modify certain parts of the application code.

Briggs said that Lightstrike is already generating revenue with a Software-as-a-Service (SaaS) model and has customers that include “some of the largest supply chain and financial services companies in North America,” but said confidentiality agreements prevent him from disclosing who those customers are. He added that, while Lightstrike has seen “remarkable results,” the company has high expectations from a market and revenue perspective and needs to execute within the next 12 to 18 months. 

RELATED: BDC among those to experience interruptions as part of CrowdStrike outage

Sprout Fund invested from its second seed-stage venture capital fund, which completed an initial $10 million CAD close in 2022. Sprout partner Kristina Milke, who coached Lightstrike’s founders through the Alberta Innovates GrowthX Revenue Accelerator, led the investment effort.  

According to Briggs, Milke and Sprout partner Shaheel Hooda’s mentorship helped the founders “mature at a breakneck pace” by refining their customer approach, value proposition, and challenging them to better share insights with customers and prospects.

“They helped us nail a truly differentiated product market fit in a very complex and competitive market,” Briggs said in the email statement. “Once this happened, they decided to lead this investment round and gave us the confidence and stamp of approval to close our round in 70 days.” 

“This happened in a VERY challenging Capital-raising environment,” Briggs added. “How often do you get the chance to work with great investors who take the time to cultivate your business and invest in you and your idea?”

Feature image courtesy Ilya Pavlov via Unsplash.

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Toronto-based tech community engagement organization TechTO has acquired Toronto-based network Peerscale as it looks to broaden its programming to later-stage entrepreneurs.

TechTO’s recently minted CEO Marie Chevrier Schwartz declined to disclose the value of the deal, which closed last week, but told BetaKit the acquisition includes Peerscale’s team, members, and programming. The brand will continue to operate under the TechTO umbrella, led by Lori D’Agostino, who spearheaded Peerscale prior to the deal.

“In the roughest of times and in the best of times, my peer network is who I went to.”

Marie Chevrier Schwartz, TechTO

Peerscale was founded in 2004. Initially known as AceTech Ontario, the organization offers a peer-to-peer network exclusively for tech CEOs, COOs and CTOs. Members are matched based on factors including company stage to participate in monthly roundtable discussions held at restaurants in the Toronto area to share challenges, problem solve, and get strategic advice.

TechTO, which was founded 10 years later, holds events in tech events in Toronto, Vancouver, and Montréal. Claiming a membership of over 60,000, in addition to offering a newsletter, a Slack community, podcasts, and other resources.

Schwartz said while TechTO’s events regularly engage late-stage entrepreneurs and executives from companies like Shopify, Wealthsimple, and Lightspeed, among others, the organization’s audience has mostly consisted of younger, early-stage entrepreneurs to date.

RELATED: Nancy Peterson shares the ups and downs of launching HomeStars at #TechTO

“Oftentimes, the later-stage companies will be on our stage and ultimately inspiring the community, but perhaps not sitting in the seats at the events,” Schwartz told BetaKit in an interview.

Peerscale members make up a unique niche within the tech industry. TechTO claimed members’ companies averaged revenues of around $30 million. Since 2011, 45 member CEOs have sold their businesses, many of which were bootstrapped, according to Peerscale’s website. The organization’s network consists of over 100 members from companies like ACTO, Humi, LumiQ, and Manifest Climate.

“We see Peerscale as the graduating class of the TechTO ecosystem,” Schwartz said, adding that many members have taken non-traditional paths to growth, which adds to their value and experience.

In a statement, Leah Carr, board chair of Peerscale, said she expects the deal to provide more valuable programming to Peerscale’s members while expanding the program’s reach.

“For two decades, Peerscale has been a vital support network for CEOs, COOs, and CTOs, helping make this journey less isolating. I’ve witnessed Peerscale members come together to save businesses in tough times, negotiate stronger term sheets, and support each other through major deals—it’s truly inspiring,” Carr added.

Originally founded in Toronto, TechTO has recently focused on expanding its reach by hosting events in Vancouver and Montréal. Celebrating its 10th birthday this year, Schwartz is advocating for a shift in the pronunciation of its name to “Tech-to,” in order to better reflect the organization’s newly national scope.

Peerscale’s peer roundtables remain active exclusively in Toronto, though Schwartz shared plans to make them accessible to “as many people as possible.”

Schwartz took on the role of TechTO CEO in September, but her connection to the organization goes back to 2018 when she co-hosted the organization’s retail-focused events. She joined just months after her decade-long tenure as CEO and co-founder of the digital product sampling startup Sampler ended, following the company’s bankruptcy in June.

Schwartz has been candid about her experience with Sampler, recently reflecting on the lessons learned from failure during a tell-all fireside chat with BetaKit editor-in-chief Douglas Soltys at SAAS NORTH last week. Drawing from her journey, she told BetaKit this week she’s developed a deep compassion for those taking on “the extreme sport of building technology companies.”

“Entrepreneurship is such an amazing opportunity, not just for people, but also for the economy, but it’s also extremely taxing, and any level of support that we can give to these amazing founders is something I felt really passionate about,” she added.

After Sampler’s end became public, Schwartz said TechTO’s co-founders Jason Goldlist and Alex Norman reached out to her. “They asked me to come in as CEO. I did not expect that, but it was actually perfectly timed,” she added.

Now at the helm, Schwartz is focused on making TechTO’s community events feel cohesive. “A lot of the initiatives that are going on in our ecosystem feel disjointed,” she said, noting she wants to find ways to “support builders in a way that’s more directly connected to the big issues.”

Another big part of her vision is around supporting entrepreneurs through initiatives like Peerscale. 

“We fundamentally believe that peer communities are so important,” she added. “In the roughest of times and in the best of times, my peer network is who I went to, and I think that bringing that magic and making it more accessible broadly across our communities is going to be really, really powerful.”

Feature image courtesy Marie Chevrier Schwartz via LinkedIn.

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The first group of Québec companies selected as high-potential exports to participate in Québec Tech’s growth and scale-up initiative were unveiled today. 

Five companies were chosen for the first edition of Stage V, which provides tailored support focused on boosting go-to-market efforts outside of Québec: industrial biotech company BioIntelligence Technologies, hardtech sports equipment company Ferreol Technologies, FinTech company flovver, AI design company Maket, and healthtech software-as-a-service company Lime Santé.

“The goal is to fast-track the best of the best,” Richard Chénier, general manager of Québec Tech, told BetaKit. 

“We have to step up here in Québec. One of the challenges is we don’t have enough involvement from the private sector.”

The service is part of the non-profit organization Québec Tech’s new mission to bring Québec innovation to the international market by creating more “hyper-growth scaleups.” The mandate was unveiled in July at Startupfest, along with a name change from the organization’s former brand, Startup Montréal. Its focus on early-stage Montréal startups shifted to the scaleup pipeline in Québec more broadly.

The selected companies are in for customized support through Stage V, where Québec Tech will leverage its international connections to help the five startups with sales, marketing, and scaling (the program bears an uncanny but coincidental resemblance to Investissement Québec’s new funding program, Grand V, Chénier said). 

Each company will receive a dedicated budget for their growth, but Chénier declined to say how much. However, he clarified that it would not take the form of equity financing. 

Québec’s Ministry of Economy, Innovation and Energy committed $7 million CAD in funding over three years through to Québec Tech through the Stratégie québécoise de recherche et d’investissement en innovation (SQRI2) program. The federal government and the City of Montréal also provide financial support.

“We have to step up here in Québec,” Chénier said, echoing a common refrain from other key players in the Québec ecosystem. “One of the challenges is we don’t have enough involvement from the private sector.”

RELATED: Meet Christopher Skeete, Québec’s new minister responsible for finishing Fitzgibbon’s work

Chénier explained that Stage V is meant to provide tools, networking, and resources to help companies reach the goal of $10 million ARR within 36 to 50 months. He noted Québec Tech chose that revenue milestone because it is a common benchmark for companies applying for certain support programs through Investissement Québec or Export Development Canada.

Though the service is focused on go-to-market efforts and scaling revenue through sales, Chénier said that once growth is there, then investment will follow. 

Joel Sirois, the president and CEO of BioIntelligence Technologies, is looking forward to accelerating sales in the US and Europe while landing new clients and partnerships through Québec Tech’s network. 

Sirois told BetaKit that he’s looking forward to connecting with entrepreneurs who have been in his shoes before, “who will be able to tell us where the trees are and where the trails are.”

Québec Tech will pick a new crop of startups three times per year, but Chénier emphasized that it would be a quality-over-quantity approach. “People sometimes don’t like to hear it, but it’s an elite program,” he said, noting that 27 judges were involved in the selection process.

Chénier’s team is also planning to roll out V0, for early-stage startups supported by an incubator or accelerator and VMAX, for young scaleups ready for an accelerated international growth phase. These phases will likely launch in 2025.

Feature image courtesy Québec Tech.

CORRECTION (11/20/24): This story has been updated to reflect that 37 judges evaluated the submissions, not 27. Betakit regrets the error.

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The compensation picture for women in VC may be reaching a tipping point in Canada—at least at the highest levels. 

For the first time, women’s average salary in senior investment roles was higher than that of men, according to the 2024 Canadian Venture Compensation Report. 

The average minimum compensation for four roles—senior associate, vice president, principal, and partner—now sits above $100,000. The median salaries and median bonuses across all positions were the highest in Ontario. 

Though the findings provide a nugget of aspiration for women looking at VC leadership roles, data still indicates inadequate family leave policies and a drop-off of women in the highest ranks.

31 percent of firms have no women in firm or investment leadership, and 50 percent do not count a woman among senior investors.

Women investors on average received lower bonuses, despite salaries remaining mostly even for entry-level positions. Meanwhile, people of colour saw lower salaries across the board in Canada, just as a recent Business Development Bank of Canada (BDC) report noted that fewer firms have diversity targets for the companies they invest in compared to last year. The report did not provide data on how women of colour fared overall. 

Glass ceiling, leaky pipes

Across Canada, women are increasingly present at venture capital (VC) firms, but not among the senior ranks where big investment decisions are made. 

And as companies grow wary of Diversity, Equity, and Inclusion (DEI) commitments, the gap is reaching a tipping point. Only about 25 percent of  Canadian venture firms are hitting gender parity at senior levels—leaving male-dominated investment committees as the norm nationwide. 

Women now comprise over half of the staff at 37 percent of VC firms. However, the further up the leadership ladder, the fewer women are present: 31 percent of firms have no women in firm or investment leadership, and 50 percent do not count a woman among senior investors.

VC firms in Canada seem to follow the pattern of a leaky pipeline, a phenomenon that has been well-documented in science, technology, engineering, and mathematics (STEM) fields. It’s also been called broken scaffolding, an indicator of the poor structural support for women in the workplace. 

With representation at the top lacking, women are walking out: half of departures were women at 59 percent of GPs in 2022. Two-thirds of GPs saw more women leaving than men.

The exodus is having an impact on returns, as well. Just a 10-percent increase in the share of women partners is associated with higher annual returns and more profitable exits, according to a 2019 Harvard study. More homogeneous venture firms are less successful in general, a Toronto Metropolitan University study found.

Building stronger supports

Increasing the number of women in leadership and entrepreneurship is a stated goal of both BDC and the Canadian government, as evidenced by funding and coaching available through the Women’s Entrepreneurship Strategy. 

Paula Cruikshank, senior vice president of fund investments at BDC Capital, said in an email to BetaKit that the improved gender balance at the junior level will translate, over time, into a better balance at the senior level. 

“I’m convinced that increasing visibility of women and visible minorities in the industry, especially in senior roles, will not only inspire others to enter the field but also foster a more inclusive environment that attracts diverse talent,” Cruikshank said.

But time and again, research has shown that increased visibility does not change cultural bias or retain women at higher levels. Workplace policies that acknowledge domestic responsibilities, such as family leave, are best practices to promote retention among women employees, according to a report from the federal ministry, Employment and Social Development Canada.  

Cruikshank also noted that commitments to human resources and DEI policies among VCs represent a “positive mindset shift” that she believes will create change over time. 

RELATED: Lack of inclusion, unclear parental leave still hamper retention of women in Canadian VC 

The CWVC report found that firms offering parental leave increased by 16 percent compared to last year and were more transparent about the benefits available. Still, over half of those surveyed said the parental leave program did not fit their needs or were unsure if it did. 

Even in provinces where social policies have promoted expansive parental leave, such as Québec, women are still underrepresented in venture firms. A recent Réseau Capital survey found that women make up only 23 percent of surveyed VC firms in the province, representing a microcosm of the national issue. 

However, the report noted an encouraging number: 55 percent of all venture capital raised in Québec since 2016 has gone to companies with at least one woman co-founder or leader. 

To address systemic challenges and retention gaps, women-led organizations have emerged, such as Victoria-based Women’s Equity Lab (WEL), as well as venture firms like The51 and Sandpiper.

WEL uses a pooled fund system to facilitate investing for women early in their VC careers with little experience by offering minimal risk opportunities. WEL members write smaller cheques, typically for pre-Series A rounds, with a preference for women-led companies that “do no harm.” 

Ariel Siller, the new managing director of the women’s network and investment fund said that true equity includes policies such as “fair pay and mentorship,” as well as an inclusive culture where diverse perspectives are valued.

The goal is to reduce barriers that have pushed women out of the field and blocked them from entering altogether—to drive better representation now and ensure it trickles up. 

CORRECTION (11/21/2024): A previous version of this article stated that 59 percent of GP departures in 2023 were women. In fact, at least half of departures were women at 59 percent of GPs in 2022. BetaKit regrets the error.

Feature image courtesy Unsplash.

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Canadian insurance giant Intact Financial Corporation has acquired Toronto-based home maintenance software startup Jiffy for an undisclosed amount.

According to a statement issued by Intact, the deal, which closed Oct. 1, is aimed at expanding Jiiffy’s service to more Canadian jurisdictions. 

Intact claimed that Jiffy’s pros have maintained a median response time of less than five minutes to date.

Imen Zitouni, senior vice president and chief marketing officer at Intact, declined to disclose the value of the deal to BetaKit, but noted it was executed by Intact Ventures, the insurance firm’s investment arm.

She said this is the first time that the Intact Ventures team has extended its mandate to mergers and acquisitions on behalf of the firm.

Intact said all of Jiffy’s team members, including co-founders Ryan Shupak and Paul Arlin, have joined Intact Financial Corporation and will continue to operate under the Jiffy brand. Shupak’s current titles are vice president at Intact, and president of Jiffy, while Arlin is now vice president at Intact and head of marketplace and operations at Jiffy.

Founded in 2015, Jiffy offers a gig-work platform that connects homeowners with pre-vetted home service professionals in over 20 categories, such as plumbing, electrical work, and roofing. The app acts as a marketplace that streamlines sourcing and scheduling. In a statement, Intact claimed that Jiffy’s professionals have completed over 450,000 jobs to date.

While several home maintenance apps exist in Canada, most notably Edmonton-based Jobber, part of Jiffy’s value proposition is speed. Intact claimed that Jiffy’s workers have maintained a median response time of less than five minutes to date.

Speaking with The Globe and Mail in 2015, Arlin attributed this efficiency to the fact that the platform notifies “dozens” of providers in a specific category when a service request is placed, allowing those with schedule gaps to take the job quickly.

Zitouni explained that the company’s research indicated that finding home service professionals was the top pain point among homeowners, adding the acquisition is aimed at strengthening Intact’s presence in the home maintenance market.

“It’s a natural partnership that will help customers keep their homes in the best condition possible,” Zitouni added.

RELATED: Jobber closes $100 million USD Series D amid strong demand for home services

Over the last 10 years, Jiffy has secured several rounds of funding, including $500,000 in seed financing in 2015, which was shortly followed by an additional $1 million. The startup closed $3 million in follow-on financing 2018, which was led by Golden Venture Partners. Its other investors include Hedgewood and Two Small Fish Ventures.

Intact said the acquisition will expand Jiffy’s service to more customers and more Canadian jurisdictions, with Zitouni noting that the teams are currently exploring where those next markets will be. Since its founding, the startup has expanded to serve the Greater Toronto Area, Ottawa, and Calgary, with the latter city joining earlier this year.

“Intact is the perfect partner to help Jiffy deliver the most accessible and reliable home maintenance solutions for homeowners, as well as providing the best tools for home service providers to expand their businesses to more Canadians,” co-founder Arlin said in a statement.

In its statement, Intact also claimed the acquisition has a climate-conscious angle, noting that Jiffy’s focus on essential home maintenance, such as cleaning eavestroughs, installing sump pumps, and repairing roofs, helps homeowners address issues that could be exacerbated by extreme weather.

Feature image courtesy Unsplash. Photo by Theme Photos.

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SAAS NORTH wrapped its ninth year in Ottawa last week, and as in years past, the 2024 conference showcased a lineup packed with prize money for Canadian software startups.

This year, the conference gathered thousands of members of Canada’s software-as-a-service (SaaS) ecosystem for two days of keynotes, panels, and networking in Ottawa’s Shaw Centre. 

Headliners from this year included Sampler’s Marie Chevrier Schwartz, who joined BetaKit’s editor-in-chief Douglas Soltys on The BetaKit Keynote Stage (BetaKit is a SAAS NORTH media partner), as well as Certn’s Andrew McLeod, and Passage’s Martin Basiri, among others. This year’s conference awarded more than $600,000 in funding and in-kind prizes. 

SAAS NORTH’s PitchFest featured eight finalists selected from nearly 100 applicants, who competed in front of an audience of SaaS investors and entrepreneurs. Two winners were chosen on days one and two of SAAS NORTH, with both advancing to a winner-takes-all pitch-off finale at the end of day two.

Bruce Ford, president and CEO of Ottawa-based Celestra Health Systems, took home first place, winning a $10,000 cash prize and a 90-second animated explainer video from Phantom Productions, valued at $10,000. Celestra’s platform helps patients living with multiple sclerosis and their clinicians monitor key disease indicators such as gait and balance, cognition, and manual dexterity.

PitchFest’s runner-up this year was Ryan Kaufman, co-owner of 1Price, a startup that helps SaaS companies unlock optimal price points. According to a LinkedIn post from SAAS NORTH, Kaufman, 24, is one of the youngest finalists in PitchFest history.

RELATED: Nunafab, SnapWrite, Aruna Revolution among startups to score prize money at Elevate

The fifth-annual SheBoot pitch competition brought together 14 women-led startups from across Canada. It awarded a total of $400,000 in investments at a grand finale celebration.

Montréal-based Sonaro claimed first place with $150,000 for its artificial intelligence (AI)-driven stroke risk diagnosis software. Vancouver-based Flutter Care snagged the second-place prize of $100,000 for its product that helps expectant parents manage pregnancy complications. Flutter Care received an additional $100,000 matching investment from BDC’s Thrive Lab at SAAS NORTH. 

The third prize went to PragmaClin Research from St. John’s, Nfld., which received $50,000 for its digital assessment tool that supports neurologists in evaluating Parkinson’s disease. 

“We’re so thankful for the support we’ve received from SheBoot and can’t wait to see the future success of all the other amazing founders,”  Hope Cahill, operations manager at PragmaClin said in a LinkedIn post following the win.

The crowd favourite award went to Aruna Revolution for its compostable menstrual health products. Aruna also recently won first place at Elevate’s Sustainable Changemaker Challenge.

The Firehood, which aims to encourage women-led innovation, provided over $200,000 in funding to two startups at SAAS NORTH. One was Montréal-based Oasis Learning AI, led by co-founder and CEO Karine Bah Tahé, which uses AI to deliver personalized training programs for employees. Oasis Learning, which recently won an in-kind prize of Amazon Web Services credits from Elevate’s Women+ program earlier this fall, took home $125,000 from The Firehood.

Also at SAAS NORTH, The Firehood provided $75,000 to Delta, BC-based Instagrooms, led by founder and CEO Danielle Burgess, which offers a professional grooming platform tailored to the equestrian community.

Feature image courtesy of SAAS NORTH.

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The federal government is renewing support for its Scale-Up Platform program with a commitment of $47.5 million announced earlier this month. 

All three innovation hubs responsible for the Scale-Up Platform saw leadership changes this year. 

The funding will be dispersed across the three regional innovation hubs responsible for the program; Communitech, MaRS Discovery District, and Invest Ottawa. Through the Scale-Up Platform, innovation hubs help entrepreneurs in high-growth sectors access capital, talent, markets, and mentorship services.

According to the federal government, the goal of the platform is to accelerate businesses’ growth and create new Canadian “anchor firms,” defined as those that generate $100 million in annual revenue or more, and attract billions in investment. 

“This renewed investment enables us to extend critical resources to even more entrepreneurs, empowering them to drive impact and build the next generation of Canadian anchor companies,” MaRS Discovery District CEO Alison Nankivell said in a statement. 

The funding renewal is a few million dollars shy of the federal government’s initial commitment of $52.4 million when it launched the program in 2019. The program also doesn’t have a publicly stated goal this time around; in 2019 the federal government said Scale-Up Platform would support 30 companies in southern Ontario achieve $100 million or more in revenue by 2024.

RELATED: Chris Albinson departs as Communitech CEO but keeps reins of True North Fund

As of June 30, 2024, Invest Ottawa claims it had 82 scaling firms in its ScaleUp program that had raised a combined $1.39 billion in capital. One of those scaling companies is compliance software company Assent, which celebrated hitting $100 million USD in annual recurring revenue earlier this year. MaRS claims its Scale-Up Platform supported ventures have generated over $9.8 billion in revenue and attracted $16 billion in capital.

All three innovation hubs responsible for the Scale-Up platform saw leadership changes this year. 

After announcing the leadership change last December, former BDC Capital senior vice president Nankivell took the reins of MaRS this past March. Since then, Nankivell has presided over multiple rounds of layoffs as the innovation hub looks to “rethink its business model.”  

Invest Ottawa officially named Sonya Shorey as its president and CEO in June, who had held the role in an interim capacity following the departure of Michael Tremblay in November 2023. 

Most recently, Communitech announced CEO Chris Albinson was departing his role after three and a half years of service. In the meantime, Communitech CFO Jennifer Gruber is serving as interim CEO while the organization’s board begins the search for a new permanent leader. 

Feature image courtesy FedDev Ontario via LinkedIn.

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Artificial intelligence (AI) leaders believe that Canada’s new AI safety institute could help strengthen AI policy, adoption, and the country’s role on the global stage.

Elissa Strome, executive director of the Pan-Canadian AI Strategy at the Canadian Institute for Advanced Research (CIFAR), said she sees room for the Canadian Artificial Intelligence Safety Institute (CAISI) to inform not just our knowledge of AI, but how to use and regulate it, both domestically and abroad.

Lawyer Carole Piovesan, who specializes in AI, credited the federal government for drawing on Canada’s existing strengths and infrastructure and focusing on understanding and mitigating some of the bigger risks associated with AI through CAISI.

“Global co-operation is going to be essential.”

Elissa Strome, CIFAR

Launched last week by Canada’s Liberal government, CAISI has been tasked with studying some of the risks associated with “advanced or nefarious” AI systems and how to mitigate them, in collaboration with other countries around the world.

The feds committed $50 million CAD over five years to CAISI in Budget 2024 as part of a larger $2.4-billion AI package containing funding for AI computing and startups. The feds have also allocated $27 million to CIFAR, which already leads the Pan-Canadian AI Strategy, to administer CAISI’s research stream.

With CAISI’s launch, Canada has joined countries such as the United States and the United Kingdom, which have established similar AI safety institutes.

CAISI, which will be housed within Innovation, Science, and Economic Development Canada (ISED), will help connect the country’s existing AI research infrastructure through CIFAR, the National Research Council of Canada, and its three AI research hubs—Edmonton’s Amii, the Toronto-based Vector Institute, and Montréal’s Mila.

Piovesan, co-founder and managing partner at INQ Law, highlighted in an interview with BetaKit that “The institute is leveraging a lot of what we already have in place.”

Piovesan, who focuses on AI risk management at INQ Law, is an adjunct professor on AI regulation at the University of Toronto, and has previously worked with the federal government on AI, noted that CAISI appears to be taking what Canada is already strong at and aligning those capabilities with a policy agenda around AI safety.

“I do think it makes sense that we are launching this and that we’re doubling down on how we can better understand and mitigate some of the more profound risks around [AI],” she added.

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

In an interview with BetaKit, Strome noted that there has been growing concern over the increasing capabilities of advanced AI systems, particularly so-called frontier models. 

Strome noted that the launch of OpenAI’s generative AI chatbotChatGPT in late 2022 left many technologists, governments, and industry players surprised by how powerful large language models were and triggered “a robust global conversation” about the risks of AI with capabilities beyond our understanding and existing regulatory frameworks.

“There’s quite a lot of research that we still need to do to understand how and where and when and why these AI systems are making the decisions that they make, how are they developing the capabilities that they have, [and] when and where and why do they hallucinate,” Strome said.

CAISI will assess AI risks and test AI systems. It will also develop guidance around the detection of AI-generated content, the evaluation of advanced AI models, and ensuring privacy in AI systems.

Strome indicated that CAISI will focus on the larger, systemic risks associated with advanced AI as it becomes increasingly sophisticated, including how advanced AI can destabilize institutions and impact democracy through misleading AI-generated media and disinformation. 

RELATED: Federal government commits $2.4 billion to AI compute, startups, and safety through Budget 2024

CAISI will take guidance from last year’s International Scientific Report on the Safety of Advanced AI, CAISI’s international partners, and Canada’s own AI research community, she said. Leaders from around the world, including a Canadian delegation, are convening next week in San Francisco to discuss AI safety.

While Canada is widely viewed as a global leader in AI research, reports indicate that domestic AI adoption is lagging. Piovesan highlighted that CAISI’s launch comes as the majority of Canadian companies do not plan to adopt AI, many of which have identified it as a tool that is not relevant to their operations. She cited a Sept. 2024 survey and analysis from Statistics Canada.  

“That’s a risk to Canada in terms of its ongoing competitiveness,” she added.

Through its research, Strome anticipates that CAISI will help lay the foundation for downstream adoption of AI across Canadian businesses and other organizations.

Strome believes it is critical that CAISI is led by the federal government given the collaboration required between jurisdictions. “We really do very much need leadership from within the government, and policy expertise and diplomatic expertise at that table as well,” she said.

RELATED: Vector Institute leaders chart AI hub’s progress and remaining challenges

“AI is a technology that doesn’t know any borders and is truly global in its scope, and global co-operation is going to be essential,” she added.

CAISI is the latest in a number of AI initiatives rolled out by Canada’s Liberal government, joining the Pan-Canadian AI Strategy, the Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems, and the proposed Artificial Intelligence and Data Act, which remains stalled at committee.

Piovesan hopes that CAISI will help continue to foster Canada’s leadership in AI safety and provide evidence to serve as the basis for AI regulation. Strome expects CAISI’s research to do that, and sees room for it to help Canada play an important role globally on the AI safety front.

“Because we have such a long history in research, because we have such a strong, concentrated AI research ecosystem, and investments that we can leverage to contribute to this global effort now, I think we have the opportunity to have an outsized impact,” Strome said. “And I think that Canadian research on AI safety will contribute significantly to addressing some of the problems associated with AI risks.”

Feature image courtesy CAISI. Photo by Jean Lemieux.

The post CIFAR leader expects CAISI to help inform AI policy in Canada and abroad first appeared on BetaKit.

The above chart lists a selection of Canadian tech companies that have secured financing rounds of $100 million or more since 2005. That time period represents approximately $48 billion invested across more than 3,000 deals.

BetaKit deals in data daily, and it’s necessary to harden oneself lest you become buffeted by the highs and lows. But there’s something about that chart I find strangely calming.

It comes via Inovia Capital, which put together an exclusive early snapshot of its State of Canadian Software report for BetaKit so Rob Kenedi and I could discuss it onstage with Inovia CEO Chris Arsenault at SAAS NORTH. You can find a podcast of that conversation, along with the report snapshot, below.

Inovia has been around since 2007, and Arsenault brought an optimistic perspective to our conversation grounded in progress over time.

“Before 2015, you could barely count the number of hundred million dollar valued companies until Shopify’s IPO,” he said. “The top 10 largest exits were under a billion dollars in tech and when we sold Luxury Retreats for $400 million, that was the 11th-largest exit.”

“Fast forward to 2024, only in our portfolio: we have over 12 companies doing between $105 and $900 million in revenue, not in valuation. This is the Canadian landscape that has changed.”

As always, there are caveats: as we’ve discussed before, data collection between 2000-2010 was pretty bad so we might be missing a few pre-Shopify Canadian Tech Heritage Moments; Isabelle Kirkwood and Madison McLauchlan have reporting below showing some major holes in the country’s early and growth-stage investments; Arsenault himself is concerned about Canada’s emerging manager VCs tapping out after struggling to secure new funds. Highs and lows.

Still, the above chart is a reminder that sometimes a positive perspective comes from setting a long enough time horizon to realize that things are moving up and to the right.

Douglas Soltys

Editor-in-chief

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TOP STORIES OF THE WEEK

Neo Financial’s $360-million Series D features big names, unanswered questions

Neo Financial’s Series D round, which closed last month, consists of $112 million CAD in equity and $250 million CAD in debt. The all-primary equity component, backed by a number of notable tech leaders like Shopify’s Tobi Lütke, Slack’s Stewart Butterfield, and Roblox’s David Baszucki, was smaller and came at a lower valuation than Neo’s unicorn-minting 2022 Series C round.

Unanswered questions still surround the round as the lead investor and revised valuation remain undisclosed.

(Read More)

Clio boosted Canadian VC investment in Q3 2024, but early-stage funding reaches “worrisome” low

Despite an uptick in Canadian venture capital investment in Q3 2024, pre-seed and seed investments have sharply declined throughout the year, which the CVCA says could spell trouble for Canada’s early-stage pipeline.

While there was a six percent increase quarter-over-quarter, and a 51 percent increase year-over-year, of venture capital investment in Q3 2024, deal volume declined by 17 percent. Vancouver-based legaltech firm Clio’s $1.24-billion CAD Series F round, which was financed entirely by American investors, accounted for 47 percent of all dollars raised in Canada during Q3 2024, according to the report.

A separate joint report from CVCA and Réseau Capital found that Québec saw a significant dip in VC in Q3 2024, continuing a multi-year trend and ranking the quarter in the bottom five of the past 10 years. On top of struggles to raise, frustration brewed in Québec this week when one of the province’s few government-run pre-seed and seed-stage investment programs was paused, seemingly overnight.

(Read More)

1Password alters leadership with David Faugno appointed co-CEO alongside Jeff Shiner

Toronto-based 1Password has shifted president and chief operating officer, David Faugno, to serve as co-CEO alongside longtime leader Jeff Shiner.

After serving in an advisory capacity for six years, Faugno was tapped to serve as the company’s first-ever president and COO last year to oversee scaling the company to new markets and product offerings. After securing multiple global partnerships and the launch of its Extended Access Management offering, Faugno will take on the new role with similar expectations.

(Read More)

As Google and Cohere expand multilingual AI offerings, experts warn of “plausible BS”

AI-powered language translation is an attractive option for companies that want to access international markets more easily. But experts say it’s unwise, and even dangerous, to rely on machine translation without professional review.

Isaac Caswell, a senior software engineer at Google Translate, told BetaKit that AI translation tools should not be used “without checking in any professional, high-stakes situations.” AI models are great at spitting out “very plausible BS,” he added.

(Read More)

4AG Robotics, Daanaa return to Foresight’s 50 “most investible” cleantech ventures list in 2024

Foresight Canada has highlighted the 50 cleantech ventures it dubs Canada’s “most investible” in the fourth rendition of its annual Foresight 50 list.

Foresight, a Port Coquitlam, BC-based cleantech accelerator, said that companies on the list are selected by a panel of cleantech investors who evaluate the investability, potential economic impact, leadership team, environmental impact, and probability of success. The list featured multiple returnees from years past, including 4AG Robotics, Daanaa, and Brickeye.

(Read More)

Scaling infrastructure for a market that never sleeps

The crypto market has faced accelerating momentum this year. Regulators are providing clearer guidelines, traditional financial institutions are entering the space with urgency, and the demand for digital assets shows no signs of slowing.

But behind the scenes, FinTech startups and financial services companies offering crypto need robust systems that can handle the speed, scale, and security of a market that never sleeps.

That’s where Aquanow comes in.

(Read More)

Mastercard and VoPay help empower a cross-border economy

Technology has dramatically changed how and where people work, creating a global economy and workforce. From gig workers to remote offices, companies are increasingly faced with payment challenges that span across borders, requiring them to provide quick and seamless money transfers to a variety of locations and banking environments.

The shift prompted Hamed Arbabi to found VoPay, an API-driven fintech-as-a-service platform launched in 2016 to simplify the complexity of offering local payment methods globally.

“We understand the challenge of how money moves,” Arbabi said.

Through its partnership with Mastercard, VoPay now offers its customers a one-stop source for cross-border and domestic transactions, making global money transfers easier.

(Read More)

Toronto’s rising tech stars have one big thing in common: they worked at Uber

Some of Toronto tech’s most ambitious leaders share a common trait in their LinkedIn profiles: working experience at Uber Canada.

Uber’s Canadian outpost has spun out the likes of Rob Khazzam, co-founder of Float; Kelly Kwan, general counsel at GoBolt; Andrew Tiffin, chief of staff to the CRO of Shopify; and Rachel Wong, co-founder of Monday Girl.

There, they learned in an environment of rapid growth, constant product development and complex realities, all while keeping pace with a rapidly changing market that required a rare blend of savvy and stamina.

Today, Uber Canada’s veterans are channelling those skills into the local ventures that are shaping the city’s tech ecosystem.

(Read More)

BETAKIT’S WEEKLY ROUNDUP

RCH – UniUni secures $42.2M CAD in Series C financing
VAN – Pender Ventures closes over $100M CAD for second fund
MB – Manitoba launches department focused on innovation and technology
KW – RunQL secures $1.6M CAD pre-seed round
KW – University of Waterloo-linked incubator Velocity moves into new hub
TOR – Richa Mehta joins Radical Ventures as San Francisco partner
TOR – Wealthsimple gets valuation bump from Power Corporation
OTT – Shopify posts strong Q3 earnings
MTL – Nuvei posts revenue growth in final earnings
MTL – Trolley closes $32M CAD Series B round
QCY – GPHY raises $5M CAD seed round

The BetaKit Podcast

The state of Canadian software in 2024

“Canada is hitting above its weight. It doesn’t always feel like that.”

Inovia Capital CEO Chris Arsenault joins to share data and a long-term perspective on the state of the Canadian software industry in 2024, recorded live on the BetaKit Keynote State at SAAS NORTH.

Take The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: Neo’s backers, Wealthsimple’s value, and Shopify’s concerns. 

Take The BetaKit Quiz for Nov. 15, 2024.

The post One chart that will make you feel good about Canadian tech first appeared on BetaKit.

A live recording of The BetaKit Podcast is starting to become an annual tradition at SAAS NORTH. 

Recorded each year on The BetaKit Keynote Stage, the live pods are often about data: last year, it was about a BDC report on the decline in Canadian entrepreneurs; this year, it’s about the state of Canadian software.

“Canada is hitting above its weight. It doesn’t always feel like that.”

Chris Arsenault
Inovia

Inovia started releasing an annual report on the state of Canadian software to kick off the new year (see this year’s version from February). Unwilling to wait until 2025 to learn about 2024, we cajoled Inovia CEO Chris Arsenault into providing a thin data slice in time for SAAS NORTH to discuss on stage. You can read along to the podcast with those early findings here, because BetaKit loves you.

The early report is broken out into five different sections and a fair amount of optimism. As Arsenault notes on the podcast, Canada is punching above its weight, even when it doesn’t feel that way.

Some of that positivity comes from setting a long enough time horizon to watch the chart steadily rise up and to the right. But the long-term view also notes interesting points of inflection. Inovia notes that the Canadian venture and growth stages are so far apart, they’re two different worlds, while the rise of secondaries and go-privates sit on either side of an IPO window that remains firmly closed.

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Underlying it all is the AI supercycle, which has seen $35.1 billion USD in global venture funding to date in 2024, a 3.6x increase since 2022. Arsenault told us it is not just valuations rising, as Inovia has AI companies in its portfolio hitting $50 million in revenue over the same time period. But pay attention to his comments on how AI adoption and development is changing customer, pricing, and go-to-market strategies, just like the shift to cloud 15 years prior. 

So, what is the state of Canadian software? Read Inovia’s State of Canadian Software 2024 early report, press play on the podcast, and let’s dig in!

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The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald. Feature image courtesy SAAS NORTH.

The post The state of Canadian software in 2024 first appeared on BetaKit.

Velocity has a new home at the University of Waterloo’s Innovation Arena in downtown Kitchener. The university-linked incubator will take half of the 90,000-square-foot Innovation Arena, which includes 20,000 square feet of purpose-built lab space for hardware and healthtech equipment. 

The Innovation Arena was announced in November 2020 as part of a collaboration between the City of Kitchener and the University of Waterloo to expand the university’s Health Sciences Campus. The City of Kitchener contributed $8.5 million CAD towards the building’s renovations, with additional funding from the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), the Government of Ontario, and philanthropic partners, including local entrepreneur and angel investor Mike Stork. 

The Innovation Arena is the latest addition to Kitchener’s growing healthtech scene. McMaster University’s Waterloo Regional Campus and ​​MACcelerate lab, the University of Waterloo School of Pharmacy, and the Communitech MedTech Accelerator are on the same block as the Innovation Arena and the Medical Innovation Xchange (MIX) is a short drive from the space. According to the university, over 100 healthtech companies are operating in the region.

Moving on up

Velocity began as an on-campus startup incubator and expanded into the Velocity Garage inside the Lang Tannery Building in 2012. The Velocity Garage opened with 8,000 square feet of space for startups and expanded to 37,000 square feet in 2016. The Velocity Garage space was previously home to Google’s Waterloo office and was located in the same building as the Communitech Hub. 

While the previous space served its founders and their teams, the Tannery Building space was not designed to support the university’s growing number of health and medtech startups. Adrien Côté, Velocity’s executive director, said the university began looking towards a purpose-built space in 2018, but the real momentum picked up in 2021.

“The City of Kitchener wanted to launch its Make It Kitchener 2.0 plan. Part of that was the city asking how they can support the life science, deep tech, and healthtech startups coming out of Velocity,” Côté said. “Then, in 2021, the university asked our team to design it, which was a really remarkable opportunity.”

RELATED: Velocity to move to new home as part of University of Waterloo, City of Kitchener deal 

Côté and the Velocity team started the design process by looking at 400 Velocity companies over the incubator’s history and asking what the new facility would need to help similar companies move further and faster. The result was a two-part design philosophy that framed the Innovation Arena’s design.

“The first is that the space should support Velocity’s origin story to foster a learning community around entrepreneurship and business. The second was that we needed to create resources that help people turn prototypes into products,” Côté said. “In this region, people can make a prototype, no problem. There are maker spaces. There’s everything on campus. But converting a prototype into a thing someone sells needs a different set of resources.”

Côté noted that about 50 percent of startups in the Innovation Arena are business productivity or software-enabled technology companies, with the others being a mixture of healthtech, biotech, electronics, and robotics. 

“Our goal is that at any one time, the cumulative value of the startups working out of this space, as we ramp up over the next year, is valued over a billion dollars,”  Côté said.

From prototype to product

Velocity will occupy the second floor of the Innovation Arena at 280 Joseph St. on the University of Waterloo Health Sciences campus. In addition to the dedicated hardware and healthtech lab space, it includes a multi-use kitchen, meeting area, and office space for Velocity startups. The space’s main corridor, Velocity Main Street, runs the length of the Innovation Arena from front to back and divides the office space from the lab space.

“The space across the street, I loved it because it was scrappy. But the evolution of it was that we felt like we were bursting at the seams. Having something purpose-built would help a lot,” Côté said.

One advantage of the new lab space is having the space and equipment to turn a prototype into a market-ready product. The other is the validation and trust that come from being associated with the university. Côté gave the example of building a wearable device that connects to a hospital’s electronic medical records (EMR) system.

“If you’re building a medical device that could go into a preclinical trial, you need to assemble that under a Quality Management System. We have rooms that support this. So now, if a hospital asks if it was made under a QMS, the startup can say they built it under a QMS at Velocity at the University of Waterloo, and the hospital will say, ‘Oh, OK, let’s go.’ That’s huge,” said Côté. 

RELATED: Kitchener-Waterloo tech leaders launch new community-building platform Waterloo Inc.

One of the startups taking advantage of the Innovation Arena’s dedicated hardware lab space is Finite Farms. The company designs solutions for regenerative organic growing practices focusing on tree health and nutrition. Its first product is an autonomous robot that can perform “thinning” in commercial orchards. Thinning is selectively removing fruits, flowers, or young buds from trees to ensure the remaining fruit can grow larger for consumer sale.

Matt Stevens, founder of Finite Farms, is no stranger to the Waterloo Region startup community. Stevens founded FleetCarma, an electric vehicle telematics startup acquired by GeoTab in 2018. After exiting GeoTab, Stevens wanted to work on solutions to address climate change-related water shortages and reduce the cost of natural, organically grown food. Finite Farms has a two-and-a-half-acre farm in Waterloo with 200 varieties of fruit and nut trees and a 60-acre farm in Simcoe, Ontario.

Stevens and Finite Farm’s head of robotics, Michael Giannikouris, work on the production robot in the Innovation Arena’s hardware space and use the farm for testing. 

“We were really lucky to get into Velocity back in March. I’ve seen all the benefits of being part of Velocity. The awesome things with the community, the coaching, and then having the space is awesome for us through the offseason,” Stevens said.

Working in the Innovation Arena is also an opportunity for Stevens and Giannikouris to give back to the next generation of founders and learn about new approaches and technologies.

“The team next to us is building agricultural robots. It’s in a different scenario than us, but they have a team with a bunch of robotics experience. We’re sharing potential suppliers and technical expertise, which is valuable. It’s been a few years since I’ve been doing this kind of thing, and things change,” Giannikouris said.

On the more recent grad side of the spectrum, Christy Lee and Ethan Alvizo are working on their startup, PatientCompanion. The platform streamlines communication between patients and nurses in hospitals and elder care centres. Instead of buzzing for a nurse and waiting to make a request, patients can use a tablet to request assistance.

“We allow patients to specify exactly what they need, whether it’s water or they’re in pain or need to go to the washroom. So nurses will know ahead of time before going into the room exactly what they need. We want to help to reduce the stress on both sides,” said co-founder Christy Lee.

PatientCompanion recently completed a pilot at a hospital in Fergus, Ontario, and will soon roll out to three additional hospitals. 

Real Life Robotics, which recently deployed its autonomous robot platform at the Toronto Zoo, is another startup taking advantage of the Innovation Arena’s space and programming. Head of growth Sharif Virani said the companies selected to be part of Velocity and the Innovation Arena are the type Canada needs now.

“The time right now in our country is a perfect storm. We’re sending all of our dollars out. We’re sending all of our talents out. It’s really important that we start to circle the wagons and redefine what it means to be a made-in-Canada brand,” Virani said. “If you look around the companies at Velocity, they all have answered this call. It’s an opportunity for us to be at the cutting edge of all these technologies—Blockchain, quantum computing, LLM and AI—all the spaces we need to be in. It’s a great ecosystem. Being here is part of that journey for us.”

Feature image courtesy University of Waterloo.

The post University of Waterloo’s Velocity moves out of the Garage & into the Arena first appeared on BetaKit.

The post Neo’s backers, Wealthsimple’s value, and Shopify’s concerns first appeared on BetaKit.

Richmond, BC-based last-mile logistics tech startup UniUni has closed $30 million USD ($42.2 million CAD) in Series C financing to deepen its push into the United States (US).

The all-equity, all-primary round, classified as “Series C2,” was led by Bessemer Venture Partners, with participation from LFX Venture Partners, Lanchi Ventures, Joy Capital, and Celtic House Venture Partners. It brings the startup’s total funding to roughly $120 million USD ($169 million CAD). A spokesperson for the company told BetaKit that the round closed roughly one month ago.

UniUni claimed its monthly US revenues have increased fourfold in the last year. 

The financing comes just six months after UniUni secured $50 million USD ($69 million CAD), led by DCM with participation from Celtic House Venture Partners. UniUni declined to say whether its latest financing constituted an up round.

Founded in 2019, UniUni initially began as a small restaurant delivery startup called Uni Express. Today, the company offers a gig worker-powered e-commerce logistics platform and last-mile delivery service that uses passenger vehicles to deliver goods to consumers. The platform features a variable-cost model for driver recruitment, dispatch, and routing, as well as software that optimizes driver routes for efficient delivery.

UniUni says it now delivers tens of millions of parcels in Canada alone. The startup expanded to the US in 2022, and today, it operates sorting centres in major cities like Los Angeles, New York, San Francisco, and Miami.

“UniUni now has more than 60 warehouses across North America, and these funds will help to further boost our growth and expand our service areas to more of the United States,” UniUni CEO Peter Lu said in a statement. “Automated sortation lines will be deployed in more cities, which will enhance parcel-handling capacity, efficiency and accuracy, while speeding up delivery times.”

In a statement announcing its latest fundraise, UniUni claimed it has doubled its total number of warehouses in the past six months. Its parcel volume has also increased 425 percent in the past year, and 44 percent in the past six months, the company claimed, while its network of registered drivers sits at more than 40,000. 

Earlier this month, UniUni recently ranked in fourth place on Deloitte’s Technology Fast 50 after posting 12,854 percent revenue growth in the last three years. In a statement, the startup said its monthly US revenues have increased fourfold in the last year. 

RELATED: Shopify rises on 26 percent revenue growth in Q3, strong holiday forecast

“Logistics is a massive market undergoing structural change due to the accelerating demands of the e-commerce era, with a new class of carriers emerging,” Bryan Wu, partner at Bessemer Venture Partners, said in a statement. “UniUni brings a new model of delivery that addresses the pressing demands for e-commerce platforms and online retailers.

UniUni plans to use its latest financing to deepen its push into the US market, where the startup plans to add warehouses and robotic sorting centres. It also plans to up its investments in software improvements, and plans to integrate artificial intelligence into the customer service and driver route optimization processes.

Partner uncertainties

UniUni was at one point known to be a delivery partner for two of the world’s largest discount retail brands, but its current position on both the home front and in the US is now unclear. 

According to its website, UniUni’s customers include firms like Shopify, ProShop, and Machool. A 2023 report in Richmond News said UniUni was named the exclusive delivery partner in Canada for the major Chinese discount retailer Shein roughly four years ago, and later won a contract to be a Canadian delivery partner with another Chinese discount retailer, Temu, alongside Canada Post.

UniUni’s spokesperson declined to say whether the company is currently a delivery partner for Shein or Temu in Canada, the US, or anywhere else. However, BetaKit has identified comments online that indicate Canadians are receiving Temu orders from different delivery partners, and is also directly in contact with one Shein customer who said they recently received their products through Canada Post, whose workers began a national strike today.

This week, Amazon announced a new service expected to rival both Shein and Temu. Amazon Haul, currently available in beta in the US, is a mobile discount shopping service covering fashion, home, lifestyle, and electronics goods, with many products priced at $10 USD or less.

BetaKit asked UniUni whether it believes the rollout of Amazon Haul will impact the company’s US expansion plans, but did not receive a response.

Feature image courtesy UniUni.

The post UniUni secures additional $42.2 million CAD to strengthen US expansion first appeared on BetaKit.

Silicon Valley-based Medeloop has closed $15.5 million USD ($21 million CAD) in Series A financing to support its platform aimed at speeding up clinical research with artificial intelligence (AI).

The all-equity round, which closed in late October, was led by Canadian venture firm Inovia Capital, with participation from Icon Ventures, General Catalyst, Maven Ventures, Healthier Capital, Up2 Opportunity Fund, and CFO Advisors. To date, Medeloop has raised a total of $25.5 million USD ($35.8 million CAD). 

“Rene’s dual expertise as a surgeon and tech entrepreneur uniquely positions him to understand the complexities of this field.”

Magaly Charbonneau, Inovia Capital

“We’re excited to partner with Medeloop as they tackle one of the most pressing challenges in clinical research,” Inovia partner Magaly Charbonneau told BetaKit. “Rene’s dual expertise as a surgeon and tech entrepreneur uniquely positions him to understand the complexities of this field.”

Founded in 2021, Medeloop has developed a platform aimed at accelerating clinical research by deploying autonomous, AI agents that the company claims can handle tasks such as ingesting data, running analytics, producing manuscripts, and finding and writing grants.

“I founded Medeloop driven by the personal mission of finding a cure for my daughter’s Complex Regional Pain Syndrome—a condition still eluding effective treatment,” Medeloop founder and CEO Rene Caissie said in a statement. “This experience revealed the inefficiencies in current medical research and the critical need for innovative solutions.”

Caissie has strong roots in the Canadian tech and healthcare sectors. Originally from Saint-Louis de Kent, New Brunswick, he is a former surgeon, researcher, and exited tech founder.

In 2011, he founded and led Montréal-based Medesync, which offered a web-based electronic medical records system that connected practitioners to hospitals, labs, pharmacies, and patients. He led Medesync’s operations and strategic direction to its eventual sale to Telus for an undisclosed sum.

RELATED: MedEssist offers pharmacists medication delivery through new partnership with Uber Direct

According to his LinkedIn page, Caissie also led a group of surgery specialty centres while based in Montréal. Today, he is based in Stanford, Calif. and currently serves as an adjunct professor at the Stanford University School of Medicine. 

Caissie’s résumé also includes work with Montréal-based Dorma Filtration, which manufactures personal protective equipment including N99 masks. Caissie specifically helped develop the N-99 Dorma mask, which was used in several Canadian provinces during the COVID-19 pandemic.

Medeloop’s founding team includes Caissie, CTO Raghav Samavedam, and chief scientific officer Josh Walonoski. Walonoski is also Canadian, and according to his LinkedIn page, is based in Montréal.

The startup has several partnerships in place with universities and other tech companies, including McGill University and Fitbit. Earlier this year, the startup partnered with Montréal AI institute Mila to give researchers tools to analyze health data and expedite the clinical research process.

Medeloop plans to use the new capital to increase the speed and accuracy of its platform.

Feature image courtesy Medeloop.

The post Canadian-led Medeloop closes $15.5 million USD in Inovia-led Series A round first appeared on BetaKit.

Many community members were surprised to learn that one of Québec’s few government-run pre-seed and seed-stage investment programs had been paused, seemingly overnight. 

As first reported by Les Affaires, the Investissement Québec (IQ) website displayed new messages as of Nov. 12 stating that Impulsion PME, an investment-matching program for early-stage companies, has been suspended until further notice. No additional statement has been released as of publication time. 

“It’s a drop of water in the ocean, but we’re in a drought.”

Louis-Félix Binette, executive director of MAIN

Two other support programs for small businesses were also put on hold without explanation: Programme développement économique pour l’aide à la redynamisation des territoires (DÉPART), which serves businesses in remote regions, and Biomed Propulsion, a program for life sciences companies. Both of these programs provide government grants.

Variations of the same statement are visible on each of the program’s websites. In English, the Impulsion PME statement reads: “The Ministry of Economy, Innovation and Energy (MEIE) is suspending the Impulsion PME program as of November 12, 2024. As the program issuer, Investissement Québec must suspend the receipt of new applications until further notice.”

Neither the updated statement nor the information pages of the three programs are posted in English. 

In a joint statement to BetaKit, MEIE and IQ confirmed that the Impulsion PME suspension is “temporary” and said that applications submitted before Nov. 12 would still be considered.

RELATED: Québec VC funding continues downward spiral in Q3 2024, but shows early-stage promise

Louis-Félix Binette, executive director of Mouvement des accélérateurs d’innovation du Québec (MAIN), said he received no formal notice of the program’s suspension, despite MAIN having helped consult on the program in its infancy. 

The opportunity to have private funding matched through Impulsion PME, he said, could make or break a startup’s success. 

“Direct help to startups is a key ingredient in the toolbox of government intervention, especially at the very early stage,” Binette said in an interview with BetaKit. 

The Impulsion PME program “aims to help young innovative companies with high growth potential gain access to investment capital at the seed stage.” Launched in 2021 under former Minister Pierre Fitzgibbon, the program was given an additional $120 million from the province in 2023 as part of the MEIE’s five-year innovation strategy. 

Binette explained that the program was launched to entice investors to jump to make riskier bets at the seed stage, before a company has had the chance to prove itself on the market. The opportunity to have the government match this money incentivizes investment, he said.

Impulsion PME is one of the few public programs targeted at pre-seed and seed-stage funding in the province. It accepted applications from startups looking to raise seed capital and provided direct funding to match private investment.

“You’re talking about real young people with real lives. They went in playing a game based on the rules, and then they changed the rules.” 

The program was created and financially supported by the MEIE, but Investissement Quebec employees managed and delivered the program. The disconnect between these entities was made apparent today as Les Affaires reported that a team of representatives from IQ gave an informative presentation on the now-suspended program to a room of young entrepreneurs at Université Laval on Tuesday—the very day the program was cut.  

The program suspension comes on the heels of a joint Réseau Capital and Canadian Venture Capital Association report marking Q3 2024 as a particularly poor quarter for seed investing in the province.

“It’s a drop of water in the ocean, but we’re in a drought,” Binette said of Impulsion PME.

Incubator programs and coaching for entrepreneurs are important, Binette explained, “but they need money to hire people to travel, to go and sell. And that money is non-existent.” 

David Dufresne, a partner at Montréal-based CMD Capital, which focuses on early-stage investment, told BetaKit that he doesn’t believe programs like Impulsion PME should have to exist in a healthy VC ecosystem. 

“Having pre-seed rounds filled by a government program is convenient, but it would be better if the investment came from a value-adding investor who can be hands-on, help, advise, coach, and contribute to the governance of a young startup.” 

Nicholas Routhier, co-founder and CEO of Technologies CubicSpace, also based in Montréal, is a mentor and coach to early-career entrepreneurs. He explained in an interview with BetaKit that while the other two programs are grant-based, the suspension of Impulsion PME is especially shocking because it was investment-based.

“For startups, it’s life or death,” Routhier said. “This is like creating or killing a company.” 

He said that as a coach to young entrepreneurs, some of whom were in the process of putting together application materials, it was frustrating to see the program shut down with no heads-up. 

“You’re playing with people’s lives. It’s not a joke,” Routhier said. “You’re talking about real young people with real lives. They went in playing a game based on the rules, and then they changed the rules.” 

Neither MEIE nor IQ has clarified whether the funds allocated to the Impulsion PME program have been used up or redirected.

MEIE and IQ wrote in a statement to BetaKit that these suspensions were necessary due to the strong level of interest and to “ensure fund availability for ongoing and future commitments.”

UPDATE (11/15/24): This story has been updated to include commentary from MEIE and IQ.

Feature image courtesy Investissement Québec.

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Montréal-based Power Corporation of Canada (Power) has marked up the valuation of its controlling stake in Toronto FinTech company Wealthsimple once again.

Power now considers its stake in Wealthsimple more valuable than the $2.1 billion it was worth at its prior, 2021 peak.

This represents Power’s fourth consecutive quarterly markup in the value of its Wealthsimple holdings. Power revealed the latest hike in its Q3 2024 earnings report, noting that as of Sept. 30, the Desmarais family’s financial services conglomerate considers the fair value of its stake in Wealthsimple to be $2.2 billion CAD, up from $1.5 billion following Q2 and $1.1 billion at the end of 2023.

This amounts to a 100-percent rise over the first nine months of 2024, and more than double the $0.9 billion that Power reported its Wealthsimple holdings were worth a year ago.

“The increase in fair value in the nine-month period of 2024 reflects an increase in public market peer valuations, Wealthsimple’s business performance and revised revenue expectations, as well as a third-party secondary transaction expected to close in the fourth quarter,” Power’s Q3 earnings report stated.

A Wealthsimple spokesperson confirmed to BetaKit that Wealthsimple is currently engaged in a secondary transaction that is expected to close in Q4, but declined to share further details.

With these markups, which have come amid a bull market for stocks and cryptocurrency, Wealthsimple has regained the value it had lost on paper when Power and its affiliates slashed their valuations of the company and their other FinTech holdings during the downturn amid broader technology and FinTech writedowns. 

RELATED: Can Wealthsimple build Canada’s largest financial institution?

Today, Power considers its stake in Wealthsimple more valuable than the $2.1 billion it was worth at its previous peak in May 2021. At that time, Wealthsimple announced a $750-million funding round that included $250 million in primary and $500 million in secondary capital to Power and its affiliates. That financing came at a $5-billion valuation, making Wealthsimple one of Canada’s most valuable private tech companies.

According to Power’s latest quarterly report, through a range of entities it controls, including Power Financial, Portage Ventures, and IGM, the firm currently holds an undiluted equity interest in Wealthsimple of 55.1 percent (down from 56.6 percent at the end of 2023). This represents a voting interest of 59.4 percent and a fully diluted equity interest of 43.6 percent.

While other shareholders may value the firm differently, as Wealthsimple’s largest shareholder, Power’s reporting offers a framework to evaluate where Wealthsimple’s valuation may sit now relative to its 2021 high of $5 billion. With Power’s fully diluted 43.6 percent equity stake valued at $2.2 billion, Wealthsimple may be worth a total of over $5 billion today, based on Power’s latest assessment.

Founded in 2014, Wealthsimple started as a robo-advisor but has steadily expanded its investment capabilities and moved into other areas of money management since then, including spending and saving, crypto, taxes, and peer-to-peer payments. The 10-year-old company is now profitable with three million users and $50 billion in assets under administration (AUA). 

RELATED: Neo Financial’s $360-million Series D features big names, unanswered questions

As of Sept. 30, Power reported that Wealthsimple had $52.1 billion in AUA and 2.6 million Canadian customers, excluding tax clients, but it did not disclose any other details concerning the company’s financial performance or revenue projections.

Wealthsimple co-founders, CPO Brett Huneycutt and CEO Michael Katchen recently joined the BetaKit Podcast to discuss the company’s journey, its recent growth, and how they plan to build “the largest Canadian financial institution.”

To help it get there, Wealthsimple announced plans to triple its headcount in Alberta to 105 by the end of next year as it recruits for engineering, product, client experience, sales, and operations roles in the province.

“We’re excited about Alberta because there is a strong entrepreneurial culture and a young and talented workforce,” the Wealthsimple spokesperson told BetaKit.

Feature image courtesy Wealthsimple.

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The government of Manitoba has launched a new department focused on innovation and technology as part of a cabinet shuffle announced this week.

According to a statement issued by the provincial government Nov. 13, the new division will focus on growing Manitoba’s tech industry, as well as supporting businesses and innovation in the province. The department will also look to modernize government services.

The department will be led by Manitoba Legislative Assembly (MLA) member Mike Moroz in the role of minister of innovation and new technology. Moroz represents the district of River Heights as a member of the governing Manitoba New Democratic Party (NDP).

“After years of cuts to health care and a rising cost of living, our government is working to give Manitobans a reason to hope for a better future,” Manitoba Premier Wab Kinew said in a statement announcing the cabinet changes. “Today, we renew our commitment to deliver a good life for families, with refreshed and focused government departments and dedicated new ministers ready to serve you.”

The creation of the new department comes one year after the NDP defeated the incumbent Progressive Conservative Party in Manitoba’s general election. That victory made Kinew the first First Nations premier in Canada’s history.

As part of this week’s refresh, several new members were added to the cabinet, while some existing members had their roles adjusted. Jamie Moses, who previously oversaw natural resources within the economic development ministry, will now serve as the minister of business, mining, trade, and job creation. Mintu Sandhu was also added to the cabinet to serve as minister of public service delivery.

RELATED: Neo Financial’s $360-million Series D features big names, unanswered questions

Manitoba’s tech industry, while small compared to others in Canada, is still home to a number of anchor companies and growing startups. According to a report from industry association Tech Manitoba, the province’s information and communication technology sector contributed roughly $1.8 billion in gross domestic product to the provincial economy and employed 9,300 workers in 2021.

Capital city Winnipeg plays host to Canadian challenger bank Neo Financial, which launched an innovation hub in the city in 2021. This week, Neo announced $362 million CAD in Series D financing shortly after topping Deloitte’s Technology Fast 50 list, tracking over 150,000 percent in three-year revenue growth. Neo was founded by the creators of food delivery app SkipTheDishes, which was founded in Winnipeg and acquired by Just Eat in 2016 for $110 million.

The province is also home to companies like Cerebra, which won a sleep study contract with the Manitoba government last year, software startup RocketRez, which closed $20 million CAD in Series B financing last year, and Farmer’s Edge, which debuted on the Toronto Stock Exchange in 2021 but went private earlier this year.

Feature image courtesy Unsplash. Photo by Mahesh Gupta.

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Québec saw a significant dip in venture capital (VC) in Q3 2024, continuing a multi-year trend and ranking the quarter in the bottom five of the past 10 years, according to a new joint report from Réseau Capital and the Canadian Venture Capital Association (CVCA). 

Twenty-five VC deals in Québec closed this past quarter with a total of  $239 million invested, representing a steep 63-percent drop in funding volume compared to last quarter. In terms of deal size, this quarter ranks 42 of 47 since 2013.

However, this Q3’s deal volume spelled an improvement on Q3 2023, which itself marked a low point for venture deals.

“The lack of exits is actually very concerning. It limits returns to LPs and therefore the recycling of those returns in the ecosystem.”

Olivier Quenneville, Réseau

In 2024 so far, Québec recorded 85 VC deals totalling $1.47 billion. That’s a 24-percent decline in deal count, but a 14-percent increase in total funding compared to the same period in 2023. 

Elsewhere in Canada, the lack of pre-seed and seed funding was “worrisome,” according to CVCA CEO Kim Furlong. The quarter was marked by a strong showing in the cleantech sector and a large later-stage boost from Vancouver-based legaltech firm Clio’s $1.24-billion Series F round.

But Québec still ranked as Canada’s second-largest market after Ontario, with 85 deals worth $1.5 billion. British Columbia had a lower deal count, but Clio’s Series F helped propel the province to second place in terms of deal volume, at $2.1 billion. 

The numbers are not all discouraging, however. Comparing year-over-year figures, Quebec has already passed its 2023 investment total—a goal that Ontario has yet to beat this year. 

Some of the largest rounds bolstering Québec’s performance this year include enGene Inc.’s private placement at $271 million, FLO’s $136-million Series E, and cleantech startup Sofiac’s $60-million euro ($88-million) French-led round of fundraising. 

No exits, no growth

In Québec, whose ecosystem was not graced by the largest Series F fund in Canadian history this past quarter, the later-stage and growth landscape is lagging. No growth-stage investment has been recorded in the province since Q2 2022. 

In addition to the lack of growth-stage investments, the new report reinforces the notion that Québec companies are stuck in what CDPQ’s Tom Birch called the Land of the Living Dead: lingering in the ecosystem for too long when exiting is the best option. 

Not a single exit has been publicly reported in Québec this year, which spells trouble for the ecosystem, according to Réseau Capital CEO Olivier Quenneville.

“The lack of exits is actually very concerning,” Quenneville wrote in an email to BetaKit. “It limits returns to LPs and therefore the recycling of those returns in the ecosystem.” 

Other pain points, according to Quenneville, include the “lack of speed in closing funding rounds.”

Early-stage activity shows promise

A bird’s-eye view of 2024 so far demonstrates a boost in early-stage deals in Québec. The latest report notes a mixed bag, with a promising 42-percent increase in deal count for 2024 so far compared to the same period last year, but a six-percent decrease in dollar value. Réseau Capital differentiates early-stage investment from pre-seed and seed investment. 

Zeroing in on the seed-stage picture is less encouraging, with only eight deals totalling $28 million. Deal count dropped by a third compared to Q3 2023. The issue isn’t confined to Québec’s borders, however, with Q3 representing the worst quarter in 2024 for both early-stage funding and deal volume nationally. The national CVCA report attributed the poor performance to the changes in the capital gains tax.

The information and communications (ICT) sector continued its dominant streak provincially, with 45 deals totalling $630 million, representing 53 percent of the total deal count and 43 percent of total funding this quarter.

A previous Réseau Capital report on the early-stage ecosystem in Québec noted immaturity in the life sciences sector and recommended establishing a working group to boost opportunities.  

However, funding for both cleantech and life sciences has seen an overall resurgence this year, both growing by more than 23 percent compared to the same period in 2023.

Québec-based firms show strong national presence

Québec funds are making their mark at the national level, the report notes, with five out of the 10 most active investors nationwide based in Québec: the federally funded BDC Capital, provincial Investissement Québec, Desjardins Capital, Fonds de solidarité FTQ, and Anges Québec. 

A previous Réseau Capital report found that the Québec VC ecosystem is still “highly reliant” on public or quasi-public funds. In Q3, that trend continued, with at least half of the most active Québec investors receiving public money. 

Québec bucked a national trend by remaining dominant in private equity: The province represented 60 percent of all private equity deals in Canada and 79 percent of total investments. 

RELATED: Québec venture ecosystem still “highly dependent” on public and para-public funding

Total funding grew by 174 percent compared to Q3 2023, with $8.11 billion invested across 283 deals. 

The average transaction size for 2024 was at $28.65 million per deal—larger than the national average of $21.85 million and “driven largely by substantial buyout investments,” the report notes. This quarter’s average of $17.56 million pulled down the year’s average. 

Quenneville found Québec’s private-equity performance encouraging, noting that businesses backed by private investments tend to see better results in revenue and productivity.

Feature image courtesy Unsplash. Photo by Grant Van Cleemput.

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BetaKit is proud to present Changemakers, an AWS Startups series spotlighting Canadian tech companies solving complex global challenges. Read part one here.

It only takes the hit of a button to buy crypto, but it takes much more to make the transaction happen.

The crypto market has faced accelerating momentum this year. Regulators are providing clearer guidelines, traditional financial institutions are entering the space with urgency, and the demand for digital assets shows no signs of slowing.

“Our team would have to be twice the size without AWS. They really help us scale without adding unnecessary complexity.”

But behind the scenes, FinTech startups and financial services companies offering crypto need robust systems that can handle the speed, scale, and security of a market that never sleeps.

That’s where Aquanow comes in. The Vancouver-based firm provides digital assets infrastructure for more than 300 global companies, from startups to established financial players.

“If you’re a FinTech platform and you’re offering stock trading on your platform today, we want to make it as easy as possible to offer crypto trading,” said Phil Sham, CEO of Aquanow. “Think of us as the backend engine that is being used to onboard the next 100-million users into crypto.”

In order to be that engine, Aquanow needs to maintain a scalable, reliable infrastructure capable of handling more than $100 billion in transaction volumes, all while keeping pace with the security and regulatory demands of the financial sector.

Growing crypto across borders

Aquanow was founded in 2018 by Sham, CTO Andy Leung and COO Jae Moon, who passed away last year. The group recognized that a growing crypto sector would need strong infrastructure to serve as its backbone. 

With their combined expertise in capital markets and technology, the founders set out to build infrastructure that gives businesses access to global markets and helps them source crypto at the best prices.

Today, Aquanow has more than 100 team members and ranked amongst the fastest growing Canadian companies with a four-year revenue growth rate of 3,022 percent, according to the Deloitte Technology Fast 50 list.

The company works with banks, brokerage firms, and payment companies across 55 countries to provide enterprise-ready solutions to help them access the global cryptocurrency market.

According to an April survey from KPMG Canada and the Canadian Association of Alternative Assets and Strategies, 22 percent more financial service organizations offered crypto asset products and services in 2023 compared to 2021.

As regulatory clarity improves and institutional adoption accelerates for crypto, Aquanow wants to power the infrastructure that businesses depend on for secure, scalable transactions.

Serving these global clients means seamlessly navigating local regulations. For that, the startup relies on AWS.

By hosting its infrastructure on AWS’s global network of data centres, Sham said Aquanow can easily manage its operations in different regions and stay compliant with local laws, all while keeping its services running smoothly.

“AWS really allowed us to expand globally,” Sham said. “We use their local setups to scale, fulfill regional requirements, and offer better products to local markets.”

Hitting a moving target

Handling sensitive financial data, particularly in the crypto sector, puts Aquanow under constant pressure to keep its systems airtight, and with the rise of institutional interest in crypto, the bar for the security has only increased.

Regulations in the space are also a moving target, with different markets enforcing various levels of scrutiny regarding how financial data is stored, encrypted, and monitored. 

“Security was always the most important part of our business from the beginning,” Leung said, adding that the company continually looks at its exposure and potential risks.

To manage those risks, Aquanow also relies on AWS’s cloud security services, which includes encryption, threat detection, and real-time monitoring.

“Monitoring and threat detection are critical for us,” Leung added. “Our security team works closely with AWS’s security solution architects to ensure we’re following best practices. They are our go-to experts whenever we have questions about optimizing our monitoring processes within the AWS environment.”

Leung said these features allow Aquanow to meet the security demands of financial institutions while keeping its operations smooth and reliable across its global footprint.

Growth without growing pains

As Aquanow expands its operations, it becomes increasingly challenging to manage infrastructure and services across multiple regions. Sham said bridging traditional centralized systems with decentralized blockchain technology requires infrastructure that can help the startup quickly adapt and grow without causing bottlenecks.

“We’re dealing with financial transactions, we’re dealing with money, there’s a lot of requirements that go beyond just having a button, and AWS really helps us with that,” Sham added.

For Aquanow to stay competitive, it has to be able to quickly deploy infrastructure, manage resources well, and minimize downtime, the startup can meet market demand while keeping its costs low. 

Sham explained that using AWS frees the company to focus on growth rather than getting overwhelmed. He said AWS provides containerized services and cloud tools that make it easier for the company to deploy, manage, and grow their infrastructure. 

“AWS saves a lot of headaches on the infrastructure and the system side, because there are a lot of the out-of-the-box solutions that give us very high scalability to begin with,” Leung added.

“Our team would have to be twice the size without AWS. They really help us scale without adding unnecessary complexity.”

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Learn more about how to join AWS Activate, the leading startup program backed by the most trusted cloud platform.

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Vancouver-based venture capital (VC) firm Pender Ventures has closed its second fund with over $100 million CAD in total commitments to invest in early-stage Canadian business-to-business (B2B) software and healthtech startups. 

Pender Ventures, which is the VC arm of Vancouver investment firm PenderFund Capital Management, announced the first close of the Pender Technology Inflection Fund II in January 2023 after securing $50 million towards its $100-million target. The firm held the final close of Fund II in late September. 

Though it took Pender Ventures longer than initially anticipated to close Fund II, the firm was ultimately able to hit its mark despite tough VC fundraising market conditions, which have led to missed goals and longer timelines for many of Canada’s VC firms. This final close brings Pender’s total assets under management to approximately $150 million across its two funds.

Pender Ventures’ Fund II limited partners (LPs) include returning institutional investors Export Development Canada (EDC)—which anchored the fund—and credit union Vancity. The firm also garnered the support of numerous new backers, including Bank of Montréal Capital Partners, the Business Development Bank of Canada, the federal government’s Venture Capital Catalyst Initiative (through its inclusive growth and life sciences streams), the Alberta Enterprise Corporation, CIBC, provincial strategic investment fund InBC, Kinsted Wealth, affiliate the Pender Growth Fund, Co-operators, and undisclosed family offices and high-net-worth individuals.

“In the boom times, if you didn’t show that you were smart enough to take some money off the table, that will really work against you.”

Maria Pacella, Pender Ventures

In an exclusive interview with BetaKit, Pender Ventures managing partner Maria Pacella attributed the VC firm’s success in meeting its target to three factors: its distributed to paid-in capital (DPI), EDC’s support, and its consistency.

“We had DPI—real DPI—to show, we had a very large, committed anchor [in EDC] in the first close; and then we stuck to our investment thesis and scope for Fund II,” she claimed.

The focus for Pender Ventures’ second fund remains the same as its first but with bigger cheques, a slightly larger portfolio, and a pan-Canadian approach. Pacella said that Pender Ventures secured its first close of Fund II within “a reasonable time period,” but noted that as market conditions deteriorated, it took the VC firm longer than expected to close the remainder.

The Pender Ventures managing partner noted that lots of LPs in Canada are “feeling tapped out” lately amid cool initial public offering (IPO) and mergers and acquisitions markets. While money still exists for great Canadian VC funds and tech companies, there is “just a higher bar to get it,” she said.

One thing that helped Pender Ventures get to this point was warehousing three investments before securing its first close of Fund II with the help of some supportive Fund I investors. Pender Ventures also exited Copperleaf Technologies earlier this year and sold partial positions in two other undisclosed portfolio companies earlier this year. She noted that a lot of VC funds held on—and in some cases, doubled down—hoping for higher rather than selling when the market was hot.

“If we hadn’t had some return of capital on Fund I, I’m not sure we would have hit our target,” Pacella said. “We really needed to demonstrate that … in the boom times, if you didn’t show that you were smart enough to take some money off the table, that will really work against you.”

RELATED: Pender Ventures closes first half of $100-million target for second VC fund

EDC was attracted to Pender Ventures’ investment thesis, the diversity of its team and portfolio, and its performance, EDC vice president of investments and mid-market lending Lissa Bjerkelund told BetaKit. “Pender [Ventures] has a successful track record of scaling Canadian companies in high-growth sectors,” Bjerkelund said.

Through its first, $25-million fund, with a few exceptions, Pender Ventures focused primarily on British Columbia (BC) and Western Canada. For its much larger second fund, the firm has expanded its investment team and geographic presence to capture some of the deal flow it sees across Canada and provide more on-the-ground support to portfolio companies.

Pender Ventures’ biggest standouts to date have been BC tech stars Jane App, which offers a practice management platform for health and wellness practitioners, and Copperleaf, which sells enterprise decision analytics software to companies managing critical infrastructure. 

Prior to joining Pender Ventures, Pacella led one of the earliest investments into Copperleaf during her time with GrowthWorks Capital and later bought into the company in 2019 through Pender Ventures ahead of its 2021 IPO. Pender Ventures also became an early investor in Jane in 2019.

RELATED: Jane App co-founder reveals company’s centaur status at BetaKit Town Hall: Vancouver

Jane, which has raised less than $10 million in primary capital to date, recently became a centaur after hitting $100 million in annual recurring revenue, while Copperleaf went public in 2021 at a more than $1-billion valuation before returning to private markets earlier this year in a $1-billion deal.

“Maria and her team have a strong track record of supporting companies from inception to exit through the ups and downs of several economic cycles,” CIBC Innovation Banking managing director Joe Timlin told BetaKit. “We believe experience and the proven ability to succeed in any financial environment will continue to serve them, their investors and portfolio companies well.”

Pender Ventures plans to build a concentrated Fund II portfolio of 12 to 14 companies, writing first cheques of between $2 million and $5 million into B2B software and healthtech startups across Canada that have reached “the inflection stage.” Pacella defined this as companies that have achieved product-market fit with “enough critical revenue” to indicate this, noting the firm considers quality of revenue and if a startup has a repeatable sales or go-to-market strategy.

The VC firm typically comes in at or around the Series A stage and prefers to lead rounds when possible, though will also support. Pacella said the firm also invests a lot through secondaries, particularly for startups that have taken a while to reach this point or have seen founders depart and require some “cap table realignment,” noting that at least half of Pender Ventures’ investments have involved some form of secondary.

RELATED: GPS and LPs at Startupfest expect gradual recovery with 2024 on pace for worst year for Canadian VC

Pender Ventures has allocated half of its latest fund to new investments and half to follow-on support, with an equivalent breakdown going towards B2B healthtech versus software in other verticals.

Pacella said that there are lots of big problems to solve when it comes to healthcare. “We believe Canada punches above our weight in terms of innovation in [healthtech], and not a lot of funds that focus [on] that area,” she added. In addition to Jane, Pender Ventures’ healthtech investments include Edmonton-based DrugBank and Toronto’s Swift Medical.

“Maria and her team have a strong track record of supporting companies from inception to exit through the ups and downs of several economic cycles.”

Joe Timlin, CIBC

Through Fund II, Pender Ventures has already made four investments, backing Burnaby, BC-based Traction on Demand spinouts Traction Rec and Traction Complete, Kanata, Ont.’s DistillerSR, and one other undisclosed startup.

Pacella claimed that Pender Ventures’ net internal rate of return (IRR) to date through Fund I is between 20 and 30 percent, but declined to share the exact figure or other performance metrics. “Even in the heydays of 2018 to 2021, we were disciplined about the price we’re paying on the way in … and then we’ve always been very conservative on our valuations,” Pacella claimed.

Amid the tech downturn, many Canadian VCs, including two of Canada’s largest investors in the space, BDC Capital and Georgian Partners, have been forced to mark down some of their investments.

Pacella noted that Pender Ventures has done the same with some of its Fund I investments. She claimed that the VC firm has been marking to market as much as possible, and “slow on writing stuff up because it’s just paper,” a process Pacella said Pender Ventures plans to continue for Fund II.

Over the past year or so, Pender Ventures has added three venture partners to its team, including Judi Hess, the former CEO of Pender Ventures-backed Copperleaf. With its final close complete, Pender Ventures plans to hire in Alberta and fill out its analyst and associate ranks to support the deployment of Fund II.

Feature image courtesy Pender Ventures.

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When Hamed Arbabi ran a Vancouver-based telecom venture, his company was working with thousands of operators and retailers across five different continents. 

Money movement was the hardest part.

“Our finance team was growing at the same pace as our engineering and sales teams,” Arbabi recalls. “At some point, we had 60 people constantly trying to track transactions and manually reconcile them.”

“We understand the challenge of how money moves.”

Hamed Arbabi, VoPay CEO

Technology has dramatically changed how and where people work, creating a global economy and workforce. From gig workers to remote offices, companies are increasingly faced with payment challenges that span across borders, requiring them to provide quick and seamless money transfers to a variety of locations and banking environments.

The shift prompted Arbabi to found VoPay, an API-driven fintech-as-a-service platform launched in 2016 to simplify the complexity of offering local payment methods globally.

“We understand the challenge of how money moves,” Arbabi said. 

VoPay also understands the benefits of having partnered with Mastercard, a company with deep expertise in global money movement.

Through their partnership, Mastercard and VoPay now offer their customers a one-stop source for cross-border and domestic transactions, making global money transfers easier.

“Every type of company is dealing with some sort of technical debt,” said Darrell MacMullin, SVP of Commercial and New Payment Flows, Mastercard, Canada. “As businesses modernize and the demands for cross-border and real-time payments increase, our integrations with merchants, governments, and banks, can enable companies to transact in a more real-time fashion around the world.”

Global cross-border payments have grown at approximately 5% annually since 2019, according to the Bank of England.

By 2027, the value of cross-border payments is projected to exceed $250 trillion, with business-to-business transactions accounting for $159 trillion.

But paying people across borders or outside regular payroll systems can be slow and complex, often leaving people on both sides of the transaction in the dark about when payments will arrive.

“If you’re expecting someone to send you a wire or payment as a business, or when you’re sending a wire or payment, you don’t have any visibility into when it’s going to land,” said Arbabi. “But this partnership allows us to deliver that and make that accessible to our target audience.”

Mastercard has been investing in payment experiences that make payments easier and more secure under its Mastercard Move banner. Today, its solutions help people send and receive money between nearly 10 billion bank accounts, mobile wallets, cards, and cash pick-up locations, representing 95% of the world’s banked population across 180 countries.

To Arbabi, Mastercard’s greatest value is its commitment to inclusion and innovation. 

VoPay’s global clients employ gig workers who rely on quick payments to ensure their financial security, as well as workers in Africa and South Asia who still rely on cash pick-up.

“Ensuring this workforce is paid quickly, transparently, and safely will help build economic security for parts of the world that desperately need it,” he said.

With both companies focused on driving Canadian-built innovation at home and abroad, this partnership reinforces Mastercard’s commitment to working with the FinTech community to simplify and speed up money movement. 

“Ultimately, people and businesses want money to move quickly and seamlessly,” added MacMullin. “We’re extremely proud of this partnership with VoPay to help funds travel across Canada’s border in a manner that continues to prioritize innovation with security baked in.” 

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Learn how Mastercard is playing a key role in modernizing cross-border payments through Mastercard Move and their cross-border services solutions.

Feature image provided by Mastercard.

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Montréal-based payments company Nuvei reported yet another quarter of growth in revenue and transaction volume in what may be its last-ever quarterly earnings in its current form as a publicly traded company.

Nuvei is looking to add more than 300 roles across its product, technology, and commercial teams. 

In its Q3 earnings report following market close on Tuesday, Nuvei reported that it generated $357.6 million in revenue for the three months ending Sept. 30, 2024, an increase of 17 percent year-over-year. Additionally, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by two percent, from $110.7 million to $108.8 million, and its net income increased to $17.2 million, compared to a net loss of $18.1 million at the same time last year. Nuvei also grew its transaction volume by 27 percent; from $48.2 billion to $61.3 billion. 

“As we look to finalize our pending take-private, we are already executing on a highly compelling value creation plan, and we have initiated the process of adding 300-plus new roles across our product, technology, and commercial teams,” Nuvei founder and CEO Philip Fayer said in a statement.

While the company also carved out a dividend of approximately $14 million, it looks like public markets investors won’t be seeing it. The FinTech company announced this morning that it had received all required regulatory approvals for its $6.3-billion USD go-private deal with American private equity firm Advent International. Nuvei said that, subject to the remaining closing conditions, it expects the deal to be completed on Friday. The dividend was going to be dispersed to investors if the transaction did not close before Nov. 26, 2024. 

UPDATE (11/18/2024): On Friday, Nov. 15, 2024, Nuvei was officially acquired and taken private by Advent International.

With the transaction completed, Nuvei shares were delisted from the Toronto Stock Exchange on Nov. 18, with plans to delist from the Nasdaq on Nov. 25, as the company ceases to be a reporting issuer under Canadian securities laws. 

As part of this deal, which Advent and Nuvei agreed to in April, Nuvei will remain headquartered in Montréal and its founder, Philip Fayer, will continue leading the company as chair and CEO alongside its existing leadership team. 

RELATED: Nuvei posts 30% revenue growth in second quarter

Other existing Nuvei shareholders, private equity firm Novacap and pension fund Caisse de dépôt et placement du Québec (CDPQ) are also rolling over some of their existing equity. According to the earnings report, Fayer, Novacap, and CDPQ will respectively own or control approximately 24 percent, 18 percent, and 12 percent of the equity in the post-transaction private company.

The deal will make Nuvei the latest publicly traded Canadian tech business to return to private ownership, just over four years after it first went public in September 2020. Some other companies that went down this path include BBTV Holdings, Dialogue Health Technologies, Magnet Forensics, MDF Commerce, Q4 Inc, and TrueContext. 

Fellow Montréal-based company Lightspeed Commerce is currently entertaining a similar move, and even announced the postponement of its Capital Markets Day last week in light of an ongoing strategic review of the business that includes exploring the potential of a sale. 

Feature image courtesy Nuvei.

The post Nuvei posts revenue growth in final earnings as go-private deal gets green light first appeared on BetaKit.

Toronto-based artificial intelligence (AI)-focused venture capital (VC) firm Radical Ventures has tapped Richa Mehta as its newest partner. 

Mehta will help lead Radical’s growth strategy, taking on typical partner responsibilities like leading investments, taking board seats, interfacing with limited partners, and helping grow Radical’s team, Radical partner Aaron Brindle told BetaKit in an email statement.

“Static software will soon be replaced by AI-powered software.”

Aaron Brindle
Radical Ventures

Before joining Radical, Mehta worked out of New York City as the youngest-ever Principal at investment firm ICONIQ Capital, according to the Brindle. While there, she sourced investments in Drata, Hightouch, and IncidentIQ, and worked on investments in companies such as 1Password, CrowdStrike, and Virtru. Prior to that, she worked on the technology investing team at growth equity firm General Atlantic. 

Brindle said Mehta will be based out of Radical’s San Francisco Bay area office, adding that Mehta’s experience in growth-stage tech investing across cybersecurity, vertical SaaS, infrastructure, and horizontal application software “resonated deeply” with Radical as it launched its latest growth fund. 

“Traditional software is undergoing a massive replacement cycle – static software will soon be replaced by AI-powered software,” Brindle said. “Richa has seen this transformation up close and will be an incredibly valuable addition to our growing team.”

Founded in 2017, Radical invests primarily in Canadian and international startups that leverage AI. The firm is led by managing partner Jordan Jacobs, also the co-founder of AI research hub Vector Institute and AI startup Layer 6, which was acquired by TD in 2018. 

RELATED: Radical Ventures launches $800-million USD AI growth fund

Radical’s portfolio includes many of Canada’s buzziest AI startups, including Toronto-based large language model developer Cohere, autonomous driving company Waabi, AI chip startup Untether AI, and quantum computing firm Xanadu.

The firm launched its fifth and largest fund to date back in August; an $800-million USD growth fund that will focus exclusively on growth-stage AI startups. The new fund brought the firm’s assets under management up to $1.8 billion. 

The addition of Mehta follows a leadership expansion at Radical back in 2021, where it added its first San Francisco-based partner in Rob Toews as part of an initiative to expand its presence in Silicon Valley and tackle the expanding market for AI investment. Yesterday, San Francisco-based AI startup Writer announced that Radical co-led its $200 million USD Series C round at a $1.9 billion valuation, and that Toews would consequentially be joining its board. 

With files from Josh Scott. 

Feature image courtesy Radical Ventures. 

The post Richa Mehta joins Radical Ventures as San Francisco-based partner first appeared on BetaKit.

Montréal-based payout platform Trolley has raised $32 million CAD ($23 million USD) in Series B growth equity financing to expand the global reach of its payout management software. 

New investor and Boston-based B2B SaaS firm Wavecrest Growth Partners led the round, with follow-on support from New York-based Pace Capital. 

“Raising investment from US backers while maintaining a strong Canadian presence is a significant point of pride for Trolley and our place in Canada’s tech ecosystem.”

Tim Nixon

The all-equity round, which closed in early October, consisted of “vastly primary capital with some secondary,” Trolley CEO and founder Tim Nixon told BetaKit. Trolley declined to disclose how much of the transaction was secondary capital or the company’s post-money valuation. 

Trolley’s payout management platform and application programming interface (API) provide businesses with an automated payout system and tools to mitigate the risk of fraud and non-compliance. Its services now include generating automatic signed tax slips and support for over 36 languages. 

Nixon said they will use the new capital to improve upon payout platform features that facilitate quicker and safer transactions and further grow their global footprint via their sales and marketing teams. The investment includes a “significant focus” on Trolley’s Trust product, which automates ID and phone number authentication to onboard new payees. 

“We’re continually building out new banking networks and payment capabilities, including instant payments, to offer even greater speed and flexibility,” Nixon said. 

As Trolley has expanded its reach to different markets, the regulatory picture for its products has grown more complex. But the platform offers risk management solutions to vet payment recipients and ensure compliance with local financial regulations, including those set out by regulatory agencies such as FINTRAC.

Though most of the team is based in Montréal, Trolley considers themselves more broadly Canadian, just like 83 percent of their staff. 

The latest funding round, which is entirely American-backed, marks a departure from Trolley’s Canadian roots—but Nixon sees this as a positive.

RELATED: FINTRAC fines crypto giant Binance $6 million for flouting anti-money laundering laws

“Our story is a testament to the world-class tech talent and potential within Canada, so strong that we’re attracting global attention and investment,” Nixon said. “Raising investment from US backers while maintaining a strong Canadian presence is a significant point of pride for Trolley and our place in Canada’s tech ecosystem.”

Chris Paik, a partner at returning investor Pace Capital, said that Trolley’s “ability to expand the product footprint and meet changing customer needs reaffirms our confidence in their vision and execution.”

Trolley was formerly known as Payment Rails and was founded in Montréal in 2015. It rebranded to Trolley in 2021 when it secured a $7 million CAD Series A, led by Pace Capital. 

After Trolley rolled out its global payout API in December 2017, adding former PayPal President Scott Thompson as a board advisor, the company closed a series of bridge rounds worth $1.9 million CAD supported by Toronto-based GreenSky Capital and angel investors.

Trolley raised a previously unannounced $12 million CAD in simple agreements for future equity (SAFEs) largely from existing investors Pace Capital and GreenSky Capital between 2022 and 2023, bringing their total funding raised to $54 million CAD, the company said. 

Though Nixon confirmed that GreenSky did not participate in this latest round, he said that the Toronto-based venture firm “remains a significant investor in Trolley, having made investments across four GreenSky funds since 2018.”

The growth equity financing stands out amid a slow year for later-stage fundraising. The number of later-stage deals in the first half of 2024 hit a record low, despite funding volume staying consistent year-over-year. 

The FinTech company now has offices in Montréal, Toronto, Halifax, Miami, Singapore, and London, UK, and wants to expand its customer base in the 36 countries it currently serves. Their client list includes notable startups in the creative and entertainment space, including creative platforms Soundcloud, Bandcamp, Canva, and Wattpad.

Since the pandemic, Trolley’s services have remained in high demand as the Canadian and international gig economies have continued to grow. A 2024 World Bank study estimated that 12 percent of the world’s working population participates in some form of gig work, with demand growing more rapidly in developing countries. 

As the internet economy has expanded internationally, Trolley has kept pace, the company said. Trolley operates in 36 countries but facilitates payments to over 4 million recipients across over 210 countries and territories. Cross-border transactions are steadily growing, according to 2023 Statista data, which estimated the value of B2B cross-border payments at $39.3 trillion USD. The number is expected to reach $56.1 trillion USD by 2033. 

RELATED: While US moves forward on open banking, Canadian FinTechs met with more “zombie” discourse

“What truly sets Trolley apart is their consistent execution around top-line growth and their focus on B2B payments with a differentiated set of high ROI value-added offerings for payers,” Vaibhav Nalwaya, managing partner at Wavecrest Growth Partners, said in a statement. “We’re excited to support Trolley in scaling their go-to-market team and optimizing their product roadmap to capture the significant market opportunity ahead.”

Nalwaya is joining Trolley’s board as an observer, while Wavecrest Growth Partners itself will have a director’s seat through principal Anthony Giannobile.  

The FinTech company, which was again featured on this year’s Deloitte Technology Fast 50 ranking, claims it has raked in a 484-percent increase in revenue over the past three years. 

“Trolley’s ethos is centred around building responsibly and sustainably,” Nixon said. “We prioritize our customers’ needs over unchecked growth, ensuring that we meet expanding regulatory and compliance standards where others may fall short.” 

In 2021, Nixon told BetaKit that he aimed to grow Trolley’s headcount from 40 employees to more than 100 by 2022. The company’s headcount is currently 68, short of that 2021 goal, which Trolley attributed to layoffs last October that occurred as part of a “push towards profitability.”

The CEO added that he envisions Trolley reaching profitability by the end of 2025.

Feature image courtesy Trolley.

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Despite an uptick in Canadian venture capital investment in Q3 2024, pre-seed and seed investments have sharply declined throughout the year, which the Canadian Venture Capital and Private Equity Association (CVCA) says could spell trouble for Canada’s early-stage pipeline.

According to a new CVCA report for Q3 2024, Canadian venture capital investment reached $2.65 billion (all figures in Canadian dollars) during the quarter. This marks a six percent increase quarter-over-quarter and a 51 percent increase year-over-year. 

Clio’s Series F round accounted for 47 percent of all dollars raised in Canada during Q3 2024.

Deal volume declined, however, with the CVCA tracking 130 deals during the quarter, down 17 percent compared to Q2 2024 and 14 percent compared to Q3 2023. As of the end of Q3, venture capital investment in Canada has reached $6.5 billion across 426 deals this year.

Investment in Q3 2024 received a major boost from a single funding round—the largest in Canadian tech history. Vancouver-based legaltech firm Clio’s $1.24-billion CAD Series F round, which was financed entirely by American investors, accounted for 47 percent of all dollars raised in Canada during Q3 2024, according to the report. 

Without Clio’s investment, Q3 2024’s total venture capital investment would drop to $1.4 billion CAD. Removing that funding from the tally, Q3 2024 investment would still surpass the same quarters in 2022 and 2023 in terms of dollars raised.

In its report, the CVCA characterized Q3 2024 as having “a mix of highs and lows” for Canadian venture capital. “While it’s exciting to see later-stage companies like Clio thrive, a decline in seed and pre-seed investments is worrisome,” CVCA CEO Kim Furlong wrote in a forward to the report.

CVCA links capital gains to early-stage slump

Early-stage investments, especially at the seed and pre-seed levels, have lagged all year, and Q3 was no exception. 

In Q3 2024, the CVCA tracked $19 million raised across 27 deals at the pre-seed stage and $104 million across 32 deals at the seed stage. The third quarter represents the lowest in 2024 for both early-stage funding and deal volume in what has already been a slow year for pre-seed and seed investments.

In the first nine months of 2024, pre-seed investments have dropped to $64 million across 77 deals, reaching only 40 percent of the $160 million raised in 2023. Similarly, seed investments have totalled $386 million over 141 deals, just 41 percent of the $952 million raised in all of 2023.

The CVCA said these declines in pre-seed and seed funding reflect a shift back to 2020 levels, continuing a trend seen throughout 2024. The report linked this downturn to recent changes to Canada’s capital gains tax. 

Earlier this year, the federal government increased the inclusion rate for individuals on annual capital gains exceeding $250,000 CAD, which many in the tech sector have argued will reduce the after-tax returns for investors and disincentivize investments in Canadian companies.

RELATED: Capital gains tax changes strike a nerve with Canadian tech ecosystem

“While the full impacts of recent capital gains reforms remain to be seen, these declines may indicate early signs of heightened investor caution, particularly as early funding rounds rely on participation from angel and high-net-worth individual investors—capital sources highly sensitive to tax increases,” the report stated.

It is worth noting that Furlong has been outspoken in her opposition to the tax changes this year. In an op-ed for the National Post in April, she called it the “single most damaging policy change for Canadian entrepreneurs.”

In comparison, funding for Series A and B rounds demonstrated resilience throughout the quarter, according to the report. Year-to-date, Canada recorded $2.5 billion invested across 134 deals across these stages, with an average deal size of $18.8 million CAD. This segment has contributed 39 percent of the total venture capital investment in Canada, closely mirroring 2023 levels.

However, the CVCA warned that if the current trend in pre-seed and seed funding continues, the Series A and B pipeline may face issues in the coming years.

“You can’t grow what you don’t seed, and we’re at risk of losing momentum in developing the next wave of high-growth startups,” Furlong wrote in the report.

A new low for late-stage funding

Later-stage venture capital investments in Canada continued to decline this year, with $1.3 billion invested across 36 deals year-to-date. Later-stage funding accounted for just 21 percent of total venture capital investment dollars in Canada by Q3 2024, a new record low.

The average deal size for later-stage funding also fell by 15 percent compared to the five-year average, reaching $37.1 million. However, the average disclosed deal size across all stages rose by 14 percent to $15 million in the first nine months of 2024.

Growth equity investments have risen in 2024, with $1.5 billion invested across only seven deals, marking the second-highest level on record for this category. This increase, however, was largely driven by Clio’s funding round.

Clio pushes BC ahead of Québec in investment

In the third quarter of 2024, Ontario, Québec, and British Columbia collectively represented 90 percent of the total venture investment in Canada and 75 percent of all deals. Ontario led in activity, accounting for 40 percent of all deals and 36 percent of the total invested amount, with three of the top ten largest deals contributing to a total of $1 billion CAD.

British Columbia had a strong third quarter following a slow start to 2024, driven largely by three major deals. By the end of Q3, BC had surpassed Québec in total investment dollars for the first time since 2021, reaching $2.1 billion across 64 deals year-to-date, with a substantial boost from Clio’s recent funding round. This positioned BC as responsible for 32 percent of Canada’s venture capital investment so far in 2024.

RELATED: “Intensely patriotic” Jack Newton shares practical approach to scaling Clio at BetaKit Town Hall: Vancouver

This year, Québec has seen $1.5 billion across 85 deals, representing 20 percent of Canada’s total deals. Comparing year-over-year figures, both Québec and BC have already exceeded their 2023 investment totals, while Ontario is on track to match 2023 in terms of dollars raised.

In Atlantic Canada, investment activity has held steady in the first nine months 2024. Newfoundland and Labrador led the region with $69 million raised across seven deals, followed by Nova Scotia with $59 million across 15 deals, and New Brunswick with $14 million from 12 deals. Alberta raised $478 million year-to-date through 61 deals.

Cleantech funding poised to top 2022 record

In the first nine months of 2024, the information and communication technology (ICT) sector led Canadian venture capital investments, securing approximately $3.8 billion across 201 deals. This increase was largely driven by four mega-deals totalling $2.2 billion.

Following ICT, the life sciences sector attracted $939 million across 98 deals during this same period. Although the number of life sciences deals was slightly lower than in previous years, total investment dollars remained steady due to a few large transactions.

Cleantech investment appears set to exceed the record levels from 2022, with $980 million raised year-to-date. The average deal size in cleantech also rose to $21.8 million, even as deal volume saw a slight decrease, with 45 deals so far in 2024.

RELATED: Despite strong 2022 for cleantech, EDC report finds Canada lags peers on R&D spending, funding, converting startups to scaleups

As of the end of the third quarter of 2024, exit activity reached $4.6 billion across 30 deals, though Q3 saw a slowdown. Mergers and acquisitions dominated, representing 90 percent of exits and contributing $4.3 billion in total value. The largest transaction remains AstraZeneca’s $3.3-billion acquisition of Fusion Pharmaceuticals, which was announced in the first quarter.

The CVCA has tracked zero venture capital-backed initial public offerings this year.

“This continued lack of liquidity is making capital harder to access,” Furlong noted in the report. “Without a more active exit market, the strain on seed and pre-seed funding could deepen, further impacting the flow of capital essential to nurturing Canada’s next generation of high-growth startups.”

Feature image courtesy Eric Ennis from Renovo Agency for BetaKit.

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Québec City-based GPHY has raised a $5-million CAD seed round to bring its workplace management app to clients outside of its home province.

GPHY (pronounced jee-fye) offers a combination of hardware and software products that allow companies to track physical office usage. Its flagship product, Elia, offers a real-time dashboard for managers to monitor statistics on office occupancy, including individual desk monitoring, and meeting room headcounts. 

“Without precise occupancy data, [managers] cannot make good decisions.”

Myrik Hervieux-Gaudreau
GPHY

The all-equity, all-primary round, which closed in early September, was led by Vincent Thibault, co-founder of Québec City-based QScale. Several other Québec entrepreneurs supported the round, including Martin Bouchard, also a QScale founder, Alex Wojcik and Ismael Meskin from Kimoby, Ugo Cloutier from CFO+CO, Jason Dacosta from MSP Corp, and Pierre-Olivier DeSerres and Guillaume Falardeau from Leviat Legal. All of these investors participated individually with no involvement from their respective companies. 

Québec investors Artopex, ACET Capital, and telecommunications giant Quebecor—through its venture capital arm asterX Capital—also made follow-on investments after supporting GPHY’s $2-million CAD pre-seed round, which closed in October 2022. This brings GPHY’s total funding to over $7 million CAD to date.

“One of the things our customers really like is the simplicity of the platform,” Myrik Hervieux-Gaudreau, GPHY co-founder and CFO, told BetaKit. “It’s really interesting for them to get real data from the occupancy of their workspace because after the pandemic, a lot of companies switched to hybrid work.” 

Though the share of Canadians working fully remotely has declined since 2022, Statistics Canada reported that the proportion of hybrid workers more than tripled in 2023. Roughly thirty percent of parents with a child five or under had a remote or hybrid arrangement. 

GPHY is pitching its Elia platform as a way to optimize office space for companies with hybrid arrangements through a comprehensive dashboard that extracts insights about how much square footage a business truly needs. 

“Managers have to decide if they can reduce square footage,” Hervieux-Gaudreau said. “But without precise occupancy data, they cannot make good decisions.” 

Lead investor Thibault believes competing products “fail to address the reality of hybrid workplaces,” because they do not capture whether office space is being over or under-booked relative to the size of a team. 

“Elia solves both problems through an innovative fusion of hardware and software that dynamically tracks occupancy and utilization in real time,” Thibault said. 

Elia’s revenue model relies on an annual subscription fee, plus recurring fees for hardware products, which include individual desk sensors, meeting room sensors, and interactive screens to display room booking schedules. 

The sensors are anonymized, or in “ghost mode,” so they are not automatically associated with a person’s identity, the company claims.

“We cannot use the data we collect to decide how many hours a person must be paid,” Hervieux-Gaudreau clarified. “We measure the occupancy of the desks and the meeting rooms and that’s it.” 

GPHY was founded in 2018 by four Laval University students: Anthony Blais, Hubert Audet, Pier-Etienne Lehoux and Hervieux-Gaudreau. The company name refers to the French translation of the physical engineering program its founders completed.  

Most of its customers are based in Québec, including investors Quebecor and Artopex. In addition to refining their product, Hervieux-Gaudreau said the company wants to scale their sales into the rest of Canada and into the United States. He said they plan to fill three to five new roles on their sales and marketing team over the next three months, to expand their team of 16.

Other GPHY clients include some Québec public agencies, such as its public health agency, as well as the law firm Fasken and the accounting firm Groupe RDL, the company said. 

According to the CFO, GPHY’s ultimate goal is “to become a unique solution for organizations to manage all their workplace needs, from access control to asset management.” 

Despite an increasing share of companies offering a hybrid work model, some large tech companies, such as Amazon and Tesla, recently mandated that employees work in the office five days a week.

Hervieux-Gaudreau said he isn’t worried about the possibility of more full-time RTO mandates, and that he is confident GPHY’s services will be needed as hybrid work becomes the norm. 

Feature image by Arlington Research via Unsplash.

The post Office management startup GPHY plans to grow sales outside of Québec with $5-million CAD seed round first appeared on BetaKit.

Toronto-based 1Password has shifted president and chief operating officer, David Faugno, to serve as co-CEO alongside longtime leader Jeff Shiner. 

“[Faugno’s] expertise in scaling high-growth tech companies perfectly complements my focus on product innovation.”

Jeff Shiner
1Password

Faugno’s involvement with 1Password dates back approximately six years. He initially acted in an advisory capacity following 1Password’s 2019 Series A round, where he served as a partner for lead investor Accel. In September 2023, Faugno was tapped to serve as the company’s first-ever president and COO where he was asked to oversee scaling 1Password to new markets and product offerings. 

Now, after securing multiple global partnerships and the launch of its Extended Access Management (XAM) offering, Faugno will take on the new role with similar expectations. In a statement, Shiner called Faugno’s impact over the past few years “extraordinary.”

“[Faugno’s] expertise in scaling high-growth tech companies perfectly complements my focus on product innovation, and I’m thrilled that he agreed when I asked him to help lead 1Password into this next chapter,” Shiner said. “Together, we’re ready to seize the incredible opportunity in front of us to define Extended Access Management as a new cybersecurity category and drive sustainable growth for 1Password.”

RELATED: David Faugno latest addition to 1Password as first-ever president and chief operating officer 

Faugno said in a statement that combining his focus on operational strategy with Shiner’s product expertise will help drive sustained growth for 1Password, adding that the co-CEO model allows them to “strategically align” all facets of the business. 

1Password noted that Shiner’s solo leadership over the past 13 years has grown the company from under a dozen employees to over 1,300 across five countries, and drawn in millions of customers including more than 150,000 businesses with highlights such as Canva, the Golden State Warriors, Salesforce, Slack, and Stripe.

The company also broke down the duo’s responsibilities, noting that Shiner will continue to guide 1Password’s vision as chair of the board while overseeing the business segments “deeply rooted” in his technical background such as engineering and security. Meanwhile, Faugno will look to “strengthen 1Password’s foundation for scalable growth” by driving 1Password’s business strategy including growth initiatives, customer experience, and financial strategy. 

RELATED: 1Password looks to help businesses secure unmanaged devices with a new offering

The company also pointed to Faugno’s experience as the former executive vice president and CFO at Qualtrics, where he led preparations for an initial public offering (IPO) and its $8-billion USD sale to SAP, as well as his CFO tenure at Barracuda Networks, where he oversaw 11 acquisitions and an IPO.

Earlier this year, 1Password acquired contextual access management firm Kolide and turned it into a component of its new XAM offering meant to help businesses secure connections from unmanaged applications and devices. According to 1Password, XAM has “experienced strong demand” since its May launch which has been bolstered by a number of partner integrations including with Google Workspace, CrowdStrike, and Microsoft, which was also announced today. As co-CEO, Faugno will continue his responsibilities in building out 1Password’s XAM ecosystem through strategic partnerships and integrations, the company said in a statement. 

In September 2023, Shiner revealed on The BetaKit Podcast that 1Password had achieved $250 million in annual recurring revenue as it grew its business-to-business (B2B) sales. When BetaKit spoke with Shiner at the last-ever Collision conference in June, he declined to provide updated revenue numbers but said that B2B sales still made up the bulk of 1Password’s revenue, adding that the consumer side of the business was also growing faster than expected.

The 1Password leadership shakeup follows a busy year in the C-suites of Canadian tech, which has seen lots of turnover in 2024. The list includes Unbounce, MindBridge, Ratehub, NowVertical, Top Hat, Untether, Cinchy, Alida, and many more. Just this past week, Wattpad appointed a new co-president while Vancouver-based Sanctuary AI announced that CEO Geordie Rose departed the company, the second co-founder to leave Sanctuary AI this year.

Feature image courtesy 1Password. 

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Some of Toronto tech’s most ambitious leaders share a common trait in their Linkedin profiles: working experience at Uber Canada. 

Since first setting up shop in Canada in 2012, Uber’s focus has been building products to get people closer to where they want to be. From UberX to Uber Eats, Uber has sought to change how people, food, and things move from point A to point B. 

“I quickly came to realize that I had no idea what an innovative, fast-moving company was, because Uber was operating at a totally different level.”

And it has also served as an incubator for talent.

Uber’s Canadian outpost has spun out the likes of Rob Khazzam, co-founder of Float; Kelly Kwan, general counsel at GoBolt; Andrew Tiffin, chief of staff to the CRO of Shopify; and Rachel Wong, co-founder of Monday Girl.

FreshBooks, Clutch, and The Peak are also among the Canadian startups and scaleups with senior team members who cut their teeth at Uber. 

There, they learned in an environment of rapid growth, constant product development and complex realities, all while keeping pace with a rapidly changing market that required a rare blend of savvy and stamina.

Today, Uber Canada’s veterans are channeling those skills into the local ventures that are shaping the city’s tech ecosystem.

Anne French, VP of Strategy and Biz Ops, Clutch

Anne French’s career path began with corporate mainstays, but it was Uber’s energy and rapid growth that captured her attention. 

Transitioning from brand marketing at Coca-Cola to Uber’s Toronto team in 2015, she dove into the tech world just as Uber was building local operations across Canada.

“Uber was really unique,” she said. “We were simultaneously advocating for a regulatory framework that would enable Uber to operate while building the infrastructure to support the product’s unprecedented consumer adoption and rapid scale-up.” 

With Uber giving its Toronto team the latitude to shape their own operations, French found herself wearing multiple hats, starting with leading adoption for Uber’s then-novel shared services like Uber Pool.

“People forget it now, but the concept of getting into a car with a stranger was a little bit crazy,” she added.

French supported key partnerships, such as Uber’s transit collaboration with the town of Innisfil, Ont., and led operations for Uber Eats during the pandemic—an experience she remembers as “a very, very crazy time, but incredibly rewarding.”

Uber’s local-first approach and startup-like agility made a lasting impression on French. “It was very much that ‘all-hands-on-deck’ mentality. There’s no job that’s too big or too small. We were really building a business off the ground,” she said. 

French’s role and responsibilities at Uber evolved exponentially. She started as Marketing Manager of Uber Rides, before taking on a role as Chief Staff for Uber’s Head of Marketing for US and Canada and Head of Operations at Uber Eats Canada.

The mindset she adopted during her six years at Uber influenced her approach at auto-commerce platform Clutch, where she now leads strategy and business operations. 

“People weren’t necessarily satisfied with how they moved around a city before Uber, but not everyone was saying, ‘This has to change,’” she said. “It’s similar to car buying and selling. Most people don’t love their options, but before Clutch they couldn’t envision an alternative. It takes a team with a bold idea and courage to challenge the norm.”

As a member of Uber’s alumni network, she still finds value in the connections she built there. She described that group as “a very tight-knit group who have built these bonds… a network of people that have their fingerprints all over the tech companies across Toronto.” 

She said Uber also shaped her confidence and ability to navigate the tech sector, particularly in a non-technical role.

 “If I’d spent most of my career in corporate, I probably wouldn’t have developed the skill set, experience, network or confidence to make the transition into an executive role as I have now,” she added.

Brett Chang, Co-Founder, The Peak

Brett Chang always had an eye for tackling transportation issues.

Back in 2014, he had launched a crowdfunded bus line in Toronto that shuttled people from Liberty Village to Union Station. The project met its end due to regulatory challenges, but it paved the way for Chang to connect with Uber’s general manager at the time, Ian Black. 

Chang joined Uber in 2015 as a Marketing Manager, just as the company was launching UberX in the city. He would later become a Senior Public Policy associate for the company.

“Uber was the most exciting place in the world to work at the time,” Chang said, recalling his work on fast-paced, high-stakes projects, from signing up drivers in Canadian communities to rallying support at Toronto City Hall for ridesharing regulations. It was all new territory for him, but he said he welcomed the chance to help make a difference locally. 

“If you had an idea that you wanted to take on, you were given license to,” he said, noting he was given a chance to take the reins on Uber’s partnership with Innisfil to build a transit solution that still operates today.

Chang’s project also included managing Uber’s partnership with Toronto Pearson Airport and advancing Uber’s cyclist safety efforts as part of the city’s Vision Zero plan. To help prevent road accidents, his team introduced features in the app that warned passengers when exiting onto bike lanes, as well as “look before you open” decals for cars.

Throughout those three years, Uber became a real-world business school for Chang, who had previously dabbled in startups, but lacked the know-how to scale them. Surrounded by managers and operators at Uber, he learned the ins and outs of managing teams and building scalable processes, both of which would serve his next venture well.

“Uber was the best possible business education I could have gotten,” Chang added.

Three years of Uber’s rapid-fire environment also gave Chang the foundation he would need to co-found his current business media startup, The Peak. Though his Uber days are behind him, Chang still credits his time there for setting him up for success in Toronto’s tech ecosystem. 

“A lot of my friends from Uber joke that we probably should have just stuck around at Uber for the entirety of our careers,” he added. “It was just an incredible experience to work with amazing people.”

Faye Pang, Chief Growth Officer, Freshbooks

When Faye Pang first joined Uber in 2015, it wasn’t as an executive or a strategist, but as a customer.

“I was one of Uber’s biggest fans in Toronto,” she said. “At the time, it was just a ride-sharing app, and I used it a lot. It was such a refreshing departure from the status quo.”

In 2015, an opportunity arose that would take Pang beyond the role of a user and into the thick of Uber’s fast-paced ecosystem as Senior Marketing Manager.

She describes her onboarding as a swift plunge into the deep end. “It was a bit of a baptism by fire,” she quipped. On her first day, she learned that everything she was told during the interview had changed: Uber decided Toronto would be the test city for a standalone Uber Eats app, and the company had a target to launch by the year’s end.

“I quickly came to realize that I had no idea what an innovative, fast-moving company was, because Uber was operating at a totally different level,” she said. “The pace at which people moved, just the challenge, the passion, the drive was unlike anything I’d ever seen.”

Following the successful launch of Uber Eats, Pang’s role moved from marketing to leading restaurant operations, before moving to General Manager for Uber Eats Canada, and finally, General Manager of Uber Freight.

Pang drove a few ‘firsts’ at Uber Canada, from becoming the first woman at the Canadian outpost to take maternity leave and helping shape the Toronto office’s policy to co-leading the global Parents at Uber group, which offers programs like ‘Bring Your Kid to Work’ days. 

She also helped launch, ‘The Daras,’ an internal awards show complete with Oscar-like statuettes resembling Uber CEO Dara Khosrowshahi. The tradition still continues to this day.

After leaving Uber in 2020, Pang took on a new challenge at accounting software firm Xero, before joining Toronto accounting platform FreshBooks as Chief Growth Officer earlier this year. Today, she’s responsible for sales, marketing, customer support, and partnerships at FreshBooks, a role she describes as a culmination of all she learned at Uber. 

At FreshBooks, Pang also brushes shoulders with other Uber alumni, and she said they often use a collective shorthand: “Remember how we did this at Uber? Let’s bring a bit of that spirit here.”

PRESENTED BY

Learn more about Uber’s tech hub in Toronto and careers here.

Headshots provided by Uber, and sourced via LinkedIn, and X.

The post Toronto’s rising tech stars have one big thing in common: they worked at Uber first appeared on BetaKit.

Canadian-founded, San Francisco-headquartered AppDirect is set to acquire San Ramon, Calif.-based IT lifecycle management software vCom Solutions for an undisclosed amount.

AppDirect, which develops software aimed at simplifying how companies buy, sell, and manage recurring tech services, said the deal will broaden its set of existing solutions.

“AppDirect has a powerful ecosystem, and the vCom team will complement and accelerate all that AppDirect does.”

An AppDirect spokesperson declined to disclose the size of the deal to BetaKit. However, they noted that upon closing, vCom Solutions’ platform will be integrated with AppDirect’s procurement management platform.

This will allow tech advisors and their customers have a single destination to manage their cloud, telecommunications, and mobility services, the spokesperson added.

“By augmenting AppDirect’s current technology management functionality with the depth and breadth of the vManager platform, AppDirect will be able to empower our advisors to offer the world’s most comprehensive IT procurement and management platform to organizations of all sizes,” AppDirect chairman and CEO Nicolas Desmarais said in a statement. 

“vCom’s offering will also allow AppDirect advisors to provide additional value to their end businesses, elevating their trusted consultancy and increasing revenue,” Desmarais added.

Founded in 2001, vCom Solutions offers both software and managed services aimed at helping businesses source, manage, and pay for their technology in one place. Among the company’s offerings is vManager, a platform for managing and centralizing IT services, and QuantumShift, which aggregates services from multiple vendors to simplify billing.

RELATED: CDPQ invests $136 million CAD into AppDirect financing program for tech advisors

This deal will see AppDirect acquire vCom Solutions’ vManager platform technology, intellectual property, and operations, along with the QuantumShift program and operations. According to AppDirect’s spokesperson, vCom Solutions’ team will become a division within AppDirect, and vCom will spin out its direct sales team and franchise advisors to become an exclusive partner to AppDirect.

In a statement, vCom Solutions’ CEO Gary Storm said the acquisition will deliver on both companies’ original visions to “help businesses find, buy and manage all their recurring IT through trusted advisors.”

“AppDirect has a powerful ecosystem, and the vCom team will complement and accelerate all that AppDirect does,” Storm added.

Based in San Francisco, AppDirect has offices in Montréal and Calgary and strong ties to Canada. It was co-founded in 2009 by Canadians Daniel Saks and Desmarais, with backing from the Desmarais family, one of Canada’s wealthiest and most influential families across a number of sectors, including tech. The family has backed notable Canadian tech companies like Wealthsimple, Koho, and Borrowell via Power Corporation.

Saks recently left his executive position at AppDirect to launch a new venture, Landbase, which is developing an artificial intelligence-powered platform that aims to help companies automate, unify, and optimize their go-to-market processes. The startup closed $12.5 million USD in seed financing in September.

RELATED: Canadian AppDirect co-founder launches Landbase with Inovia, Desmarais family backing

AppDirect’s solutions help companies streamline tech spending, track inventory, and handle support. The deal with vCom Solutions marks AppDirect’s fourth acquisition in the last two years as the company has sought to diversify its product portfolio. According to the spokesperson, AppDirect sees acquisitions as a “key strategic growth driver.”

In May, AppDirect announced plans to acquire marketplace-building platform Builtfirst, and in August 2023, acquired two of the major businesses owned by US managed services provider ADCom Solutions. This included its enterprise monitoring and management platform VEEUE, as well as its network operations centre. 

In early 2023, the company acquired Telecom Brokerage Inc. to merge its engineering and educational resources with AppDirect’s advisors. AppDirect’s prior acquisitions also include ITCloud.ca, Radialpoint, and AppCarousel. 

The spokesperson said AppDirect and vCom Solutions are working to close the acquisition “as soon as possible,” but declined to provide a specific target date.

Feature image courtesy AppDirect.

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Canadian e-commerce giant Shopify has posted strong third-quarter revenue growth, a sizable profit, and an upbeat forecast for the upcoming holidays.

Shopify’s sales climbed 26 percent year-over-year to $2.16 billion USD in Q3, according to its latest earnings report, exceeding analyst expectations. In a statement, Shopify CFO Jeff Hoffmeister highlighted that this marks Shopify’s sixth consecutive quarter of greater than 25 percent revenue growth excluding the sale of its logistics business in 2023.

“I truly believe this is the best version of Shopify yet.”

Harley Finkelstein, Shopify

During the company’s Q3 earnings call, Hoffmeister attributed Shopify’s revenue growth to gross merchandise volume (GMV) strength, rising subscription revenue, pricing changes, and increased payments penetration. Shopify’s third-quarter GMV was $69.7 billion, marking a 24 percent jump relative to Q3 2023.

Shopify also posted $828 million in net income in Q3, more than half of which—$484 million—was attributable to the impact of its equity investments. This marks an increase compared to the $718-million profit Shopify generated during the same period last year.

Public market investors have reacted favourably to the company’s Q3 earnings beat: Shopify’s shares have risen more than 21 percent on the TSX and NYSE as of publication time following its Q3 earnings beat.

“I truly believe this is the best version of Shopify yet,” Shopify president Harley Finkelstein said during Shopify’s latest earnings call. “We are really pleased with our overall size and our shape, how we’re operating, and especially our free cash profile.”

In Q3, Shopify’s free cash flow was $421 million, for a margin of 19 percent. Hoffmeister said that Shopify is pleased with this profile. “It strikes the right balance between profitability and investing back into the business to continue to deliver top-line growth,” he added.

“These consistent results [in Q3], delivering both growth and profitability, demonstrate the durability of our business, our numerous growth drivers, and our ability to balance investing in the future with discipline, delivering double-digit free cash flow margin,” Hoffmeister said.

RELATED: Shopify’s venture into brick-and-mortar payments pays off, revenue grows 21 percent in Q2

Shopify saw lower margins on payments during the third quarter amid pressure from a higher mix of Shopify Plus merchants and credit card usage over debit, which Hoffmeister said were partially offset by growth in its other merchant solutions.

The Shopify CFO noted that Shopify also saw higher absolute dollar losses on capital loans and payments. Hoffmeister described these as a function of volume increases for both businesses and claimed that the company’s loss ratios remain within a consistent range.

Finkelstein said that Shopify attracted a growing number of enterprise retailers to its platform during Q3, including Hanes, Lionsgate Entertainment, and Reebok.

The Shopify president indicated that international growth—which he said continues to outpace North America, especially in Europe—remains a focus for Shopify.

Hoffmeister noted that Q4, which includes Black Friday and Cyber Monday, is typically Shopify’s highest volume quarter.

Shopify is forecasting fourth-quarter revenue growth this year at a mid-to-high-twenties percentage rate relative to Q4 2023 as it heads into the holiday shopping season.

Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.

Feature image courtesy Shopify.

The post Shopify rises on 26 percent revenue growth in Q3, strong holiday forecast first appeared on BetaKit.

Kitchener-Waterloo-based runQL has revealed $1.6 million CAD in pre-seed funding as it looks to improve how data and development teams document and manage queries.

The round, which consisted of simple agreements for future equity (SAFE) and closed in late May, was led by Mistral Venture Partners with participation from MaRS Investment Accelerator Fund, Inovia Capital, University of Waterloo Velocity Fund, Philip Rathle, CTO of Neo4j, and other Waterloo-based founders that the company declined to disclose to BetaKit.

“We believe that we’ll be the central repository for all queries used in an organization.”

runQL has developed a query platform aimed to help data professionals and developers write queries faster, and eliminate the chaos around saving, documenting, and dealing with multiple versions of queries. According to CEO and founder Rob Darling, the startup is looking to address a long-standing pain point for analysts and developers.

“Data teams are growing in organizations, and that’s put more pressure on them to have newer tools that are updated [and] that allow them to collaborate easier and make discoverability of existing queries better,” Darling told BetaKit in an interview.

Darling has a good deal of experience in this space. Prior to launching runQL, he was the CTO of Kitchener-Waterloo, Ont. innovation hub Communitech, and ran ecosystem data startup Briefed.in (Disclosure: BetaKit was previously a Briefed.in media partner), which was acquired by Communitech in 2022. 

He also previously founded now-exited customer relationship management startup LaunchSpot.io, worked as a consultant to startups, and brought business intelligence solutions to large enterprises. It was, in part, Darling’s resumé that drew Mistral partner Raif Barbaros to the startup.

“Rob is a highly respected and successful founder,” Barbaros told BetaKit. “Beyond his impressive track record, he has built a reputation as an exceptional leader and has garnered deep insights into RunQL’s target market through his years as a technical founder.”

RELATED: Communitech acquires Briefed.in to add data-backed insights to its repertoire

In around 2010, when working on enterprise software architecture with insurance giant Manulife, Darling noticed problems with how queries that are handled by data teams were stored and managed. These problems re-emerged in his work at Communitech, and through his consulting work with startups and other businesses.

For data analysts, a query is a specific request for information or data from a database. By writing a query, typically using the programming language Structured Query Language (SQL), analysts can extract, filter, and manipulate large datasets to obtain relevant information to answer a question or generate insights.

The problem, Darling said, is that these queries need to be documented and managed. He conducted numerous customer problem interviews with data analysts and business leaders, finding that analysts spend up to two hours a day just on documentation. Many of them used tools like Google Drive, but those documents were often not updated to account for changes in the data.

“You can have perfect data, but if your queries are wrong, the business is actually going to get the wrong answers,” Darling added.

Git, an open-source version control system that helps teams manage and track changes to code or text files collaboratively, is also built more for developer workflows, Darling added, and isn’t tailored to the unique needs of data analysts. So, he set out to build a platform that could help data analysts better document and manage queries.

runQL’s platform streamlines query writing for data analysts by providing automatic suggestions based on previously saved queries, allowing users to start from existing templates instead of typing from scratch. 

“The best way to think about this is like Google search,” Darling explained. “When you’re typing in Google Search, it’s giving you suggestions on the next word that makes sense based on your search. We do the exact same thing, but for queries.”

Analysts can save and make versions of queries, instantly share them with teammates, and these queries are automatically documented. Certified queries can be marked as the “gold standard,” with team discussions and reviews to ensure accuracy, giving users confidence in using trusted queries. The setup aims to reduce what Darling described as “painful admin work.”

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

runQL launched its minimum viable product at the end of last year, and ran a beta in January 2024. Now fully launched, Darling said runQL has four business customers that are very different from one another from both a size and industry perspective, as well as a number of users who are signing on to use the platform. So far, the industries include banking, life sciences, geospatial data, and e-commerce, and they range in size from just 100 employees to over 10,000.

Darling claimed runQL can save teams two hours a day in manual work, which he said equates to roughly $3,000 a month in productivity savings per data analyst, or $36,000 a year.

“Data teams constitute approximately two to three percent of the workforce in most companies across various industries,” Barbaros added. “This represents a significant target market and presents a substantial opportunity for growth.”

The CEO declined to disclose how much of the startup’s funding has been deployed, but noted the funds are being put towards sales and marketing as well as product development. The startup’s team sits at six people, including two co-op students from the University of Waterloo, and Darling plans to keep the team lean for the time being.

Darling envisions runQL’s platform as a way to give users accurate, data analyst-approved answers to their questions without requiring a data analyst’s direct involvement each time. 

He said by capturing metadata around queries and organizing data analyst workflows, the platform could allow business users to access reliable answers to frequently asked questions. He noted that unlike text-to-SQL solutions, which rely on large-language models to generate queries but have low accuracy rates, runQL offers high-confidence answers by mapping user questions to pre-approved, analyst-created queries. 

“We believe that we’ll be the central repository for all queries used in an organization, and our system will be the lynchpin to all other systems that query data,” Darling added.

Feature image courtesy runQL.

The post Armed with $1.6 million CAD, runQL wants to take the chaos out of data query management first appeared on BetaKit.

Calgary and Winnipeg-based challenger bank Neo Financial has secured $362 million CAD in Series D financing as the FinTech scaleup looks to offer Canadians more competitive alternatives to traditional banks.

The financing, which closed last month, consists of $112 million CAD in equity and $250 million CAD in debt. The all-primary equity component was smaller and came at a lower valuation than Neo’s unicorn-minting $185-million CAD Series C round in 2022.

Led by an undisclosed Chinese investor, the round featured a number of notable tech leaders, including Shopify co-founder and CEO Tobi Lütke, Slack co-founder Stewart Butterfield, PointClickCare co-founder and executive chair Mike Wessinger, and Roblox co-founder and CEO David Baszucki. It brings Neo’s total equity funding to $384 million CAD and total overall funding to more than $650 million CAD.

“Now, it’s really about becoming the primary financial relationship for Canadians.”

Jeff Adamson,
Neo Financial

In an interview with BetaKit, Neo co-founder and chief commercial officer Jeff Adamson said that the debt portion is made up of a combination of asset-backed lending and venture debt provided by an undisclosed consortium of Canadian banks and credit unions (Adamson declined to share the exact debt breakdown). Neo plans to use asset-backed lending to support its new credit card products, including the Neo World Mastercard and Neo World Elite Mastercard.

Adamson declined to disclose Neo’s lead Series D investor or share the company’s latest valuation with BetaKit. He claimed that the company’s Series D round came at “really great terms” for Neo employees and existing shareholders.

Additional details have emerged following the publication of this story. As first reported by The Logic and independently confirmed by BetaKit, public filings indicate that a single, undisclosed Chinese investor led Neo’s latest round, with its Series D shares granting rights to Neo’s latest investors over earlier backers.

Approximately $69 million of the $112 million invested in Neo’s Series D round—roughly 60 percent of the equity funding—came from a single, undisclosed Chinese investor, according to documents posted to SEDAR and reviewed by BetaKit. These documents indicate that nearly $83 million in total came from international investors, raising questions as to whether or not Neo remains a Canadian majority-owned business.

Other documents posted online by federal regulators and reviewed by BetaKit appear to indicate that the company’s Series D financing is a structured round that grants seniority and some voting rights to its newest backers at the expense of earlier investors. Adamson denied that the round was structured to BetaKit, noting that no warrants, options, or higher liquidation preferences were provided on top of the shares.

Adamson attributed Neo’s decision to not share the name of its lead Series D investor to a lack of media release approval, but claimed that Chinese investor is “an experienced global investment firm” that has “invested in a number of leading FinTechs around the world.”

Adamson told BetaKit that Neo is majority-owned by Canadian and American investors and remains a Canadian majority-controlled business following this round. He said there were no changes in governance or control and no board seats were provided as part of this round, noting the unnamed lead investment was made passively in a minority position.

Becoming one of Canada’s fastest-growing firms

Neo has built a reputation as a fast-growing company: it recently topped Deloitte’s 2024 Technology Fast 50 list and The Globe and Mail Report on Business Magazine’s latest annual Top Growing Companies list. According to Deloitte’s list, Neo posted 154,022 percent revenue growth between 2020 and 2023. However, Adamson declined to share Neo’s actual revenue or an updated customer count (Neo last reported surpassing one million customers in 2022). According to The Globe’s list, Neo’s 2023 revenue was between $75 million and $100 million.

Two years ago, the challenger bank offered just a single product; today, it offers eight. The company plans to use the new financing to launch more products and expand its existing offerings. According to Adamson, Neo’s vertical integration enables the FinTech company to roll out new financial services products and features at an “unmatchable” pace.

“We’ve basically sprinted and got to near-product parity with [legacy Canadian] banks offering credit cards, bank accounts, term deposits, high-interest savings accounts, investments, [and] we became a mortgage lender, so we have that breadth of products,” Adamson said. “Now, it’s really about becoming the primary financial relationship for Canadians.”

RELATED: Neo Financial snags top spot on Deloitte’s 2024 Technology Fast 50

In addition to the undisclosed Chinese investor, Neo’s equity Series D funding was provided by a group that includes new backers Butterfield, Wessinger, Baszucki, and Vancouver-based Version One Ventures, and existing Neo investors like Peter Thiel’s Valar Ventures—which led the FinTech scaleup’s Series A, B, and C rounds—Toronto-based Golden Ventures, San Francisco’s Afore Capital, Peter Thomson’s Thomvest Ventures, and Lütke. 

Adamson noted that Lütke had invested “a small amount” previously. “This is really him doubling down,” Adamson said.

“We need a culture of going for gold in Canada and this is precisely what the team at Neo Financial has,” Lütke said in a statement, echoing his previous comments about the country’s “go-for-bronze” culture at BetaKit’s Town Hall earlier this year. “[Neo’s] growth is proof that it’s possible to build world-class products here in Canada.”

“A completely different market”

Launched in 2019 by the founders of Winnipeg-based online food ordering service SkipTheDishes, Neo offers a variety of spending, saving, investing, and mortgage products for Canadians through a combination of business-to-business and direct-to-consumer FinTech. Today, it helps companies power loyalty and rewards programs and offer co-branded cards and other services. Neo works with Tim Hortons, Cathay Pacific, and Hudson’s Bay—which reportedly holds a stake in Neo—among others.

This round comes two and a half years after Neo became a unicorn when it closed $185 million in Series C funding at a more than $1 billion valuation in May 2022.

As the tech and VC market has cooled amid the macroeconomic downturn, many startups have struggled to fundraise. This has been especially true in FinTech, as 2023 saw VC investment and deal activity in Canada’s FinTech sector drop by 30 and 50 percent respectively, year-over-year.

RELATED: Koho secures $190 million CAD in equity, debt to bolster banking licence efforts

“There’s no question it’s a completely different market today than it was back in 2021, 2022,” Adamson said. “We look at, how do we build a long-term, durable business that is going to be able to weather the highs and the lows, and I think the fact that we’ve been able to raise one of the largest FinTech rounds globally this year is really a testament to the strength of the team that we have Neo, the quality of the products that we’ve built, and the incredible opportunity we have in front of us.”

Adamson indicated that Neo’s Series D financing came at a lower valuation, but declined to disclose how exactly it valued the FinTech scaleup. “While it’s lower than our previous watermark, this round is in line with the multiples raised by the leading global challenger banks,” he claimed.

Last month, Toronto-based Neo competitor Koho Financial announced $190 million in funding to fuel its growth, expand its lending book and product offerings, and support its efforts to become a bank and obtain a Schedule 1 banking licence. Koho’s financing consisted of $40 million in equity and $150 million in debt, and according to The Globe and Mail, it came at a flat $800 million valuation.

Balancing priorities and staffing changes

It has not all been smooth sailing for Neo. The Logic reported in 2023 that the company had struggled to grow its consumer-facing business and retain customers. BetaKit spoke with Neo last year about its push to help more companies offer embedded finance. At the time, Neo co-founder and CEO Andrew Chau said that embedded finance had been a part of Neo’s strategy since the beginning, but noted that the challenger bank had begun more actively selling the offering to businesses.

This April, The Free Press reported that Neo had quietly laid off an unspecified amount of staff in Winnipeg for unexplained reasons. In July, The Free Press reported that Neo had the provincial funding it was previously promised cut slightly by the Manitoba government after creating fewer positions and training fewer people than expected.

LinkedIn Insights indicates Neo’s headcount has dropped by 21 percent to 751 over the past year. When asked whether the company had made layoffs during this time, Adamson said Neo has “a high bar” for performance, which he noted has “driven efficiencies in the business,” but claimed Neo has not made any “structured layoffs” during this time. Neo currently has over 600 employees, down slightly from the more than 650 it had in 2022.

Neo, which is dual-headquartered in Calgary and Winnipeg, recently opened its third Canadian office in Toronto, setting up shop on Bay Street, where it hopes to tap into the city’s talent pool.

“Toronto is a real hub for not only tech talent, but of course, financial services talent,” Adamson said, noting that Neo plans to hire for some key roles in the city, including banking positions.

UPDATE (11/12/24): This story has been updated to reflect new information about Neo’s Series D round obtained from company filings, as well as supplementary commentary shared by the company.

Feature image courtesy Neo Financial.

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Foresight Canada has highlighted the 50 cleantech ventures it dubs Canada’s “most investible” in the fourth rendition of its annual Foresight 50 list. 

Foresight, a Port Coquitlam, BC-based cleantech accelerator, said that companies on the list are selected by a panel of cleantech investors who evaluate the investability, potential economic impact, leadership team, environmental impact, and probability of success. The recipients were announced at an event held in Vancouver last week, which featured one-minute pitches from each of the list recipients and one-on-ones with potential investors. 

There were multiple alumni returning to this year’s Foresight 50, including Toronto-based Brickeye, which develops industrial internet of things (IoT) and data analytics for environmental risk mitigation in construction and infrastructure management. The startup raised a $5-million convertible debt financing round led by BDC Capital last year, just one week before it was named to the 2023 Foresight 50. 

Salmon Arm, BC-based 4AG Robotics, which was previously known as Techbrew Robotics, made its first return to the list since 2022. 4AG develops what it describes as fully autonomous, vision-guided robots designed to squeeze into mushroom-growing racks and gently pick, trim, clean, and pack them all hours of the day. The company last raised $17.5 million CAD in Series A funding shortly after changing its name last year. 

RELATED: Longbow Capital completes $150-million initial close of second Energy Transition Fund

Vancouver-based Daanaa was also recognized for a second straight year, making its way back onto the list shortly after being named Company of the Year in the Startup category at the BC Tech Association’s Technology Impact Awards (TIAs) last month. Founded by University of British Columbia alumni, the company developed a plug-and-play Power Transaction Unit that it says can perform multiple power management and data transmission functions. 

Daanaa wasn’t the only recent award recipient on the Foresight 50. It was joined by Vancouver-based electric vehicle fleet management company 7Gen, who won the Gamechanger award in the Climate Leadership category at the TIAs last month. 

Foresight said in a statement that Canada has recently fallen in the global ranks of the Climate Change Performance Index, adding that securing early-stage funding remains crucial for cleantech ventures to succeed. Still, investment in the cleantech sector seems strong as the sector had a momentous 2023, concluding last year with a record number of transactions that led to $1.1 billion in investments, according to a CVCA report from earlier this year.

All the companies named to the Foresight 50 list can be found on Foresight’s website. 

Feature image courtesy Daanaa via LinkedIn. 

The post 4AG Robotics, Daanaa return to Foresight’s 50 “most investible” cleantech ventures list in 2024 first appeared on BetaKit.

Lianna Genovese, 25, who founded the Hamilton-based assistive technology company ImaginAble Solutions in 2019, was recognized for her humanitarian work alongside several other recipients including NBA hall-of-famer Shaquille O’Neal at the 11th annual Muhammad Ali Humanitarian Awards (MAHA) this past weekend. 

While still a student at McMaster University, Genovese was inspired by a woman she met through a class project named Elissa who loved to paint, but found it difficult to wield a brush due to her cerebral palsy. To address this, she created ImaginAble’s flagship Guided Hands product, a mechanical device meant to help those with limited hand mobility write, paint, draw, and use touch-screen devices. The startup also received an equity investment from the Centre for Aging + Brain Health Innovation in August 2023.

Each year, the Muhammad Ali Center in Louisville, Ky. uses the MAHA to recognize high-profile “seasoned humanitarians,” such as O’Neal, and six under-30s who are “serving as advocates, activists, and role models” to bring positive change in the world. The center says the young winners are honoured for embodying one of Muhammad Ali’s six core principles: confidence, conviction, dedication, giving, respect, and spirituality.

Adding yet another award to her résumé, which includes the Forbes 30 Under 30 and the National James Dyson Award, Genovese was recognized for embodying the principle of respect at MAHA. The Ali Center said her assistive technology improves the quality of life for people with disabilities, and pointed to ImaginAble’s mandate to commit a portion of each sale to help provide products to families in need.

Genovese told BetaKit in an email statement that she was selected by Lonnie Ali, Muhammad Ali’s wife, as one of the six winners. Her nomination came after MAHA learned of ImaginAble Solutions’ work as part of a Forbes 30 Under 30 profile. Genovese said that it was an honour to represent Canada as the only Canadian award recipient. 

“I had goosebumps the entire night,” Genovese said. “After being surrounded by inspiring philanthropists, activists such as Dawn Gee, Nile Rogers and Shaquille O’Neil, I left the awards even more inspired to make a global impact for the disability community.”

Genovese met O’Neil at the awards gala and got him to try out the “Shaq-sized” version of Guided Hands, which he later signed. 

Launched in 2013, MAHA is meant to honour the boxing legend’s humanitarianism and recognize a new generation of social changemakers. The awards also act as the Muhammad Ali Center’s primary fundraiser, helping the museum and social justice advocacy centre support its mission-based programs, community events, partnerships, digital content, and museum exhibitions.

UPDATE (11/12/2024): This story has been updated with commentary from ImaginAble founder Lianna Genovese.

Feature image courtesy ImaginAble Solutions.

The post ImaginAble Solutions founder Lianna Genovese recognized at 11th annual Muhammad Ali Humanitarian Awards first appeared on BetaKit.

Translation experts at tech companies and certified translators in Canada are concerned about the fallout of machine-translated content being used in important documents without expert oversight. 

Canadian businesses are increasingly incorporating artificial intelligence (AI) into their day-to-day operations, often to automate tasks currently being performed by humans. Statistics Canada data shows that 6.1 percent of all Canadian businesses have used AI for goods and services in the last 12 months. 

Google Translate’s Isaac Caswell told BetaKit that AI models are great at spitting out “very plausible BS.”

AI-powered language translation is an attractive option for companies that want to access international markets more easily. But experts say it’s unwise, and even dangerous, to rely on machine translation without professional review. 

Instead, translators and tech experts are encouraging a symbiotic relationship between translators and AI—one that safeguards the role of human translators while maintaining high information quality across languages. 

This view is echoed among translators themselves, who have already lost work due to automation, according to Québec’s professional order for translators, terminologists, and interpreters. The Ordre des traducteurs, terminologues et interprètes agréés du Québec (OTTIAQ) recently warned against using AI translation without the supervision of certified translators, arguing that it can result in misinterpretation and misinformation with grave consequences.

Data dearth

Automated translation experts in the tech sector, including those at Google Canada, agree with this warning. 

Google Translate recently unveiled two new additions to its free program used by over 500 million people worldwide: Canadian French and Inuktut, the family of Indigenous languages spoken in Canada’s Arctic. Developed in partnership with Inuit Tapiriit Kanatami, an Inuit advocacy organization,  the program incorporates multiple dialects of the Inuktitut language. 

Isaac Caswell, a senior software engineer at Google Translate, told BetaKit that AI translation tools should not be used “without checking in any professional, high-stakes situations.” AI models are great at spitting out “very plausible BS,” he added. 

Adding support for Indigenous languages, particularly those with a relatively small number of speakers due to acts of cultural erasure perpetrated by the Canadian government, was more challenging because less data is available, Caswell explained. 

Some companies are seeking to close the gap in multilingual support for LLMs. Cohere, one of Canada’s most valuable AI companies, recently rolled out an update to its Aya Expanse program, a multilingual large-language model (LLM) that supports 101 languages. 

RELATED: Fujitsu launches Cohere-powered Japanese LLM for enterprise

Sara Hooker, the vice president of research and head of Cohere For AI, the company’s non-profit research lab, explained that their research is working to improve the quality of LLMs in languages other than English, which suffer partly due to a dearth of available high-quality training data. 

“Available datasets treat many languages as invisible, and favour North American language and cultural perspectives,” Hooker wrote in an email to BetaKit. “This language gap can produce biases and undermine safety for users.” 

Aya Expanse models were trained using data from over 3,000 professional translators, the company claims. However, that expertise cannot safeguard against some of the common inaccuracies that plague machine translation.

When asked if Aya Expanse models could be used without the input of a professional translator, a Cohere spokesperson said that these models are intended for use by AI researchers and therefore could not comment. 

Google Translate notes that the following disclaimer should be used when a translated text is presented without vetting by a professional translator: “Reasonable efforts have been made to provide an accurate translation, however, no automated translation is perfect nor is it intended to replace human translators.” 

Translators sound the alarm 

Betty Cohen, president of OTTIAQ, said that some translators lost clients when generative AI tools first began to roll out, but they came back very quickly because the machine-generated results were not up to the same standards. 

“As soon as you have a text that is a bit more sensitive or technical, or that uses a very specialized language, or that is only badly written in the original language, then the result is never very good,” Cohen said in an interview with BetaKit. 

Cohen noted that translators have been using AI for years, and are the best people to use AI for this tool because they understand how different models approach the task. 

One recent study by a Google DeepMind researcher found that combining translators’ skills with increasingly powerful AI tools can boost productivity. Scaling training compute, which means increasing the computational power of an AI model, significantly boosted the productivity of translators working on tasks with the assistance of LLMs. Compute scaling had an even larger effect on productivity for less skilled translators. 

“Machines are not at a stage where professional translators can be skipped.”

Gary Kalaci
Alexa Translations

OTTIAQ argues that trusting the product without expertise from a professional translator can lead to misunderstandings, bad writing, and the erosion of a company’s message. 

Cohen framed the irresponsible use of AI tools to translate text as a terrible marketing strategy for companies. At worst, she said, a company could be alienating an entire customer base with error-riddled marketing copy. 

“It’s not just translating words,” she said. “It’s translating your culture, it’s translating your image, translating your message.” 

A potential way to mitigate these issues is customization, which has been the business model for Alexa Translations for over 20 years. The legal translation company acquired an AI machine translation company in 2017, and now offers the model to its clients, customized to fit their company’s internal legal jargon and learn from it. 

Despite the tailoring capacity of their model, CEO Gary Kalaci told BetaKit that it was “dangerous to use without professional intervention indiscriminately.” 

“Machines are not at a stage where professional translators can be skipped,” he added.

But across the internet, they are being skipped—and it’s contributing to what American journalist Jason Koebler of 404 Media calls the Zombie Internet: the erosion of the information ecosystem as AI-generated slop clogs up websites and social media feeds. 

Starting in 2023, the social media platform Reddit has rolled out the automated translation of its content into languages such as French, German, and Spanish without expert intervention. The company said in a quarterly earnings release this year that the move contributed to 44 percent year-over-year growth of its user base. 

But as Cohen points out, large-scale automated translation with no supervision could compound small errors and lead to lower content quality and the spread of misinformation.  

Large language liability

In some instances, faulty AI translation has led to public errors with varying degrees of severity, from embarrassing slogan mistakes to mistranslations of refugee and asylum claims in the US. 

Argyri Panezi, the Canada Research Chair in digital information law and policy at the University of New Brunswick, explained that companies should be prepared to be held legally responsible for any AI-generated content they choose to use.

“If something goes wrong, and a case ends up being litigated before the court, they will look for a human to attribute this fault,” Panezi said in an interview with BetaKit. 

Air Canada, for example, was found responsible for misinformation that a customer-service chatbot sent to a customer and was ordered to pay compensation. 

Beyond costly lawsuits and reputational risk, data privacy is another concern when using free online programs for machine translation. 

“For those kinds of freemium programs, typically, you are the product,” Kalaci said. 

DeepL, a popular AI-powered translation service, only ensures that texts are deleted and not used to train its AI models for paid Pro subscribers. Free users, then, could have their inputs stored and used for training. 

The reputational, legal, and privacy-related risks of using imperfect AI models to translate material are serious, according to Cohen, which is all the more reason for tech companies to employ professionals who understand the strengths and limitations of both neural machine translation and LLMs. 

“The professional translator today is your insurance against hallucinations,” Cohen said.

The post As Google and Cohere expand multilingual AI offerings, experts warn of “plausible BS” first appeared on BetaKit.

The first and only time I’ve found myself part of a front-page story in The Globe and Mail was Monday, January 30, 2017.

It was the day after a small contingent came together over a weekend to draft and publish an open letter in rapid response to then-President Trump’s travel ban preventing citizens of seven Muslim-majority countries from entering the U.S. BetaKit published the open letter alongside 150 signatures late Sunday morning and it soon became international news; at final count, the letter was endorsed by over 3,500 signatories from more than 2,200 different companies.

The decision by our southern neighbours to re-elect Trump, now a convicted felon and civilly liable sexual abuser, has that moment in time running through my mind in a loop.

A lot has changed in almost eight intervening years: Prime Minister Trudeau has drastically reduced Canada’s immigration targets and Foreign Affairs Minister Melanie Joly told media Thursday that plan won’t change despite President-Elect Trump’s promise of mass deportations. RIP #WelcomeToCanada alongside Twitter, I guess.

Speaking of Elon, both Eric Newcomer and Brian Merchant had very smart post-election takes on Silicon Valley’s slow transition to embracing Trump from 2016 to 2024. As Merchant put it, “In Trump, Silicon Valley got what it wanted: A president that will kneecap antitrust efforts, embrace deregulation, and defang labor laws.” It’s too soon to evaluate ROI, but early returns look good given (former VC!) JD Vance is willing to threaten NATO support if Europe regulates X.

Back to Canada. The open letter noted “As connected economies, decisions by the United States can directly impact every business north of the border,” but I’m not interested in talking tariffs right now. I’m much more focused on those signatories and the extent to which their opinions have changed over the last eight years, particularly as Canada approaches its own election.

I spoke with someone this week whose job is to walk Canada’s halls of power and ask for things. I can’t tell you how that’s going for them but I can share their opinion that we’re about to find out if Canadians actually believe the stories we tell ourselves. I find it hard to disagree.

It’s not 2017 anymore. That much must be clear by now.

Douglas Soltys
Editor-in-chief

Meet Sophia. Uber is helping her move forward.

Uber has come a long way since its first trip in Toronto in 2012—but it has the same mission to drive positive change. Today, it continues to help people like Sophia and her family get where they need to be safely and conveniently. 

Uber is becoming a zero-emission mobility platform, advocating for positive change for drivers, and working with UFCW Canada, the country’s largest private-sector union. Whether it is getting home from work, getting to the airport, or discovering a new restaurant, Torontonians know they are able to rely on Uber. 

Learn more about how Uber is moving Toronto forward.

TOP STORIES OF THE WEEK

WonderFi CEO Dean Skurka kidnapped, released after reportedly paying $1-million ransom

Dean Skurka, president and CEO of Toronto-based cryptocurrency company WonderFi, was reportedly kidnapped and held for ransom in downtown Toronto this past week.

A Toronto Police Service spokesperson told BetaKit that police were called about a kidnapping in the area of University Ave. and Richmond St. W. just before 6 p.m. on Wednesday after suspects forced the victim into a vehicle and made a demand for money. The victim was later located in Centennial Park in Etobicoke uninjured.

Following the incident, Skurka took to LinkedIn to express gratitude for the support of the Toronto business community and offer reassurances that he was safe and doing well.

(Read More)

Meet Christopher Skeete, Québec’s new minister responsible for finishing Fitzgibbon’s work

Christopher Skeete took over the innovation portion of Pierre Fitzgibbon’s portfolio after Premier François Legault’s “super minister” resigned as Minister of Economy, Innovation and Energy in September.

Skeete, a former entrepreneur in the healthcare space with six years of government experience, has inherited and is now responsible for a five-year, $7.5 billion CAD plan to lessen the productivity gap between Québec and Ontario, better commercialize research innovation, and develop a “scientific and innovation culture.”

In an interview with BetaKit, Skeete said that making provincial businesses competitive again in light of Canada’s lagging productivity is a matter of “existential” importance.

(Read More)

Citing national security risks, feds order shutdown of TikTok’s Canadian arm but forgo outright ban

The Government of Canada has ordered social media giant TikTok to wind up its operations in Canada, but refrained from banning use of the short-form video platform outright.

In a statement, Innovation Minister François-Philippe Champagne indicated that with this move, the federal government aims to address “specific national security risks” related to the operations of TikTok’s Chinese parent company ByteDance in Canada through TikTok Technology Canada. Champagne did not elaborate on the nature of these risks.

TikTok, which said the federal government’s decision will impact hundreds of jobs in Canada, plans to challenge this order in court.

(Read More)

Online legal database CanLII sues Caseway AI for copyright infringement

The Canadian Legal Information Institute (CanLII) has filed a lawsuit against artificial intelligence startup Caseway AI, alleging Caseway violated its terms of use and infringed copyright by scraping 3.5 million records from CanLII’s database.

The institute is seeking an injunction to restrain the startup from reproducing the allegedly stolen work, as well as monetary damages.

Caseway founder and CEO Alistair Vigier rebutted CanLII’s claims in a statement to BetaKit, saying that the court documents Caseway is trained on are public record and that neither he, nor anyone at Caseway, has “seen or accepted” CanLII’s terms of use.

(Read More)

Aron Levitz named co-president of Wattpad as #CDNtech executive turnover continues through the fall

In the latest wave of leadership changes in Canada’s tech sector this year, Toronto-based Wattpad has found a new co-president in one of its long-time leaders: Aron Levitz.

Levitz joins from Wattpad Webtoon Studios—a division of Webtoon Entertainment, which is a subsidiary of South Korea-based conglomerate Naver Corporation—where he has served and will continue to serve as president. He will serve as co-president of Wattpad alongside KB Nam, and will report to Junkoo Kim, the founder and chief executive officer of Webtoon Entertainment.

Levitz’s appointment follows a season full of leadership change in Canada’s tech sector, continuing a trend seen throughout 2024.

(Read More)

Neo Financial snags top spot on Deloitte’s Technology Fast 50

Deloitte has announced the 2024 winners of its Technology Fast 50, a list meant to highlight Canadian companies demonstrating rapid revenue growth.

Neo Financial took the top spot for the second year in a row, sporting a whopping 154,022 percent revenue growth between 2020 to 2023, more than nine times that of the runner-up PurposeMed.

Other recognized companies include UniUni, Relay, Nesto, ZayZoon, Showpass, Koho, Certn, and Plooto.

(Read More)

Cracking the code with AI

Earlier this year, Mantle faced a common challenge.

They had built the prototype in a specific coding language that was perfect for speedy interaction in response to feedback from customers.

The problem was that it was different from the code used in their production tech stack.

To ship the product, Mantle would need to convert the codebase from one language to another, an onerous task that is regularly faced by software teams and enterprises.

That’s when Mantle co-founder and CTO Dwayne Forde wondered if AI could help. A trusted industry leader with more than 20 years of engineering experience, Forde chronicled the process in a blog post he hopes will serve as a useful future resource to other tech teams.

(Read More)

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

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Visit AWS Activate to get started.

Funding, Acquisitions, and Layoffs

VAN/MTL – Well Health & Lightspeed report revenue milestones in earnings
CGY – Longbow Capital secures initial $150M for second energy transition fund
TOR – Workorb secures $2.6M CAD seed round
TOR – Reactiv secures $6.97M CAD seed round
TOR – MedEssist launches integration with Uber
TOR – Manzil expands to US through acquisition of Aghaz Investments
TOR – Exit North Ventures launches $20M CAD FinTech fund

The BetaKit Podcast

Addressing Canada’s speed of financial innovation

“Regrettably, I don’t think we’re very good, to be honest, at collaborating with FinTechs, or collaborating with the private sector more broadly on solving for policy issues.”

It’s a podcast double feature this week, with two conversations offering a pulse check on financial innovation in Canada. First: Koho’s Daniel Eberhard (CEO) and Peter Aceto (Chief Banking Officer) detail the process of becoming a licensed bank along with the benefits and risks. Second: leaders from Manzil (Mohamad Sawwaf) and Borrowell (Eva Wong) join the Department of Finance’s Julien Brazeau to discuss innovations focused on greater inclusion for Canada’s underbanked. Recorded live at Elevate Festival.

Take The BetaKit Quiz

Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday.

This week: TikTok Bans, CEO kidnappings, and Canadian tech’s Fast 50.

Take The BetaKit Quiz for Nov. 8, 2024.

Feature image courtesy Tom Carnegie via Unsplash.

The post Meanwhile, in Canada first appeared on BetaKit.

We have a podcast double feature for you this week, featuring two different conversations from the recent Elevate FinTech stage, which was programmed by BetaKit.

Combined, I think they provide a pulse check on the state of financial innovation in Canada, and where it intersects with competition, government policy, and the nation’s underbanked. For both conversations, it seems like the key metric is speed.

“Regrettably, I don’t think we’re very good, to be honest, at collaborating with FinTechs, or collaborating with the private sector more broadly on solving for policy issues.”

Julien Brazeau
Department of Finance

First up, we have my fireside chat with Koho CEO Daniel Eberhard and chief banking officer Peter Aceto about the FinTech scaleup’s journey to becoming a licensed bank. The pair lays out what that regulatory process looks like, as well as the benefits for the company and its customers (note the promise regarding savings rates). 

But there are risks as well. If you’ve ever heard Eberhard speak before, you know he cares a lot about product velocity. Koho has split itself into banking and tech divisions in the hopes of getting the benefits of both without a drag on the other. Pay attention to how much time and attention Eberhard is willing to give the banking license process, and what might make the company pull out.

Next up is a conversation moderated by BetaKit’s Josh Scott on financial inclusion and the barriers to it in Canada. This panel features some familiar Canadian FinTech names like Borrowell co-founder and COO Eva Wong, and Manzil founder and CEO Mohamad Sawwaf, but the special guest might be Julien Brazeau from the Department of Finance, who was in “violent agreement” over some of the issues those founders noted about Canada’s speed to innovation. 

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

Brazeau notes during the panel that the original intention with open banking was to be a “fast follower” on developments in other countries, and six years is far too long for anyone to consider fast. When challenged by Sawwaf on the role the feds could or should be playing in aiding access to modern financial services, Brazeau provided the quote at the top of this article.

Admitting you have a problem is the first step in solving the problem, and it’s much better than the zombie discourse found on other corners of the internet. But how to solve it, then? 

Let’s dig in.

PRESENTED BY

The BetaKit Podcast is presented by Uber Canada: driving positive change for riders, drivers, and communities across Toronto.

Uber is becoming a zero-emission mobility platform, advocating for positive change for drivers, and working with UFCW Canada, the country’s largest private-sector union. Whether it is getting home from work, getting to the airport, or discovering a new restaurant, Torontonians know they are able to rely on Uber. 

Learn more about how Uber is moving Toronto forward.

The BetaKit Podcast is hosted by Douglas Soltys & Rob Kenedi. Produced & edited by Darian MacDonald. Feature image courtesy Elevate.

The post Addressing Canada’s speed of financial innovation first appeared on BetaKit.

The post TikTok Bans, CEO kidnappings, and Canadian tech’s Fast 50 first appeared on BetaKit.

Semiconductors and artificial intelligence (AI) took centre stage at the fourth HardTech Summit this week, where attendees gathered to network, attend panels, exhibitions, and check in on the state of Canada’s hard technology ecosystem.

Markham, Ont.-based VentureLab, which caters to entrepreneurs building hard tech solutions, hosted the event.

HardTech 2024, which was held on Nov. 6 and 7 and counted BetaKit as a community partner, saw Canadian tech leaders discuss Canada’s role in the global chip supply chain and some of the chances and challenges facing the country’s semiconductor and AI industries among other topics.

“It’s becoming clear that the world’s biggest problems are not going to be solved with software.”

Hard tech or deep tech startups are companies trying to solve significant scientific or engineering challenges. Among others, this group includes hardware companies developing medtech, AI, and semiconductor solutions. These types of tech businesses are often more complex, technical, risky, and time- and capital-intensive to build than their software counterparts.

In an interview at HardTech 2024 just over a year after taking the reins of VentureLab, CEO Hugh Chow outlined some of the opportunities he sees right now for Canada in two key areas—semiconductors and AI—and where he thinks the country should focus its efforts.

“There’s no reason why we have to pick a battle on all fronts,” Chow told BetaKit. He argued Canada needs to focus on its strengths, which include advanced chip design. He said that today, the country has lots of promising semiconductor firms taking a fabless approach, naming Toronto trio Untether AI, Alphawave Semi, and Tenstorrent as examples (fabless chip manufacturing is a model wherein companies design semiconductors but outsource their manufacturing). Chow singled out the country’s commitment to advanced chip manufacturing as lacking.

In terms of advanced AI research, Chow argued that “Canada is clearly in the lead,” but has fallen short previously on commercialization. Going forward, he believes that Canada needs to focus more on the latter and the hardware that powers AI. Chow views the federal government’s recent $2.4-billion CAD AI package as a positive development and hopes to see more commitments towards AI and semiconductors.

These days, hard tech innovations are being commercialized and increasingly converted into successful exits. Earlier this year, outgoing Panache Ventures partner Chris Neumann argued in a blog post that a hard tech renaissance is happening globally right now and Canada risks missing out.

Per a 2023 report from Boston Consulting Group, hard tech’s share of overall venture capital funding has doubled over the past decade, to 20 percent. As the tech market has cooled amid the macroeconomic downturn, and many other startups and fund managers have struggled to fundraise, AI has remained hot. This has also helped fuel investor interest in the hardware that powers AI, as semiconductor investment appears to be bouncing back after a down period in 2023.

RELATED: ISED invests $120 million to build out CMC Microsystems’ semiconductor network

During one panel discussion at HardTech, Kanata Ventures managing partner and VentureLab venture advisor Yuri Navarro noted that lots of people are claiming to be hard tech investors right now, some without any expertise, “because they see the writing on the wall” about the opportunity that exists in the space.

This can be a benefit, but it can also fuel “a dangerous dynamic” where many want to invest in hard tech but do not understand it—something Navarro warned hard tech founders to be careful about. “You don’t want to get into a bad marriage just because somebody wants to marry you,” he added.

Fellow panellist Mitch Debora, co-founder and CEO of Toronto-based Mosaic Manufacturing—which recently closed a $28-million CAD round to scale its 3D printing infrastructure—shared some insight into how this landscape has shifted.

“Hardware is so hard, and no one wants to talk to you—at least that’s what it felt like for a bit,” Debora said. “But I think the world is changing … it’s becoming clear that the world’s biggest problems are not going to be solved with software.”

RELATED: As semiconductor re-shoring efforts heat up, SILICAN urges feds to provide more targeted domestic chip support

The COVID-19 pandemic revealed some of the challenges associated with reliance on global supply chains. Since 2020, bringing manufacturing back to the country, or re-shoring—including for semiconductors—has become a strategic priority for both Canada and the United States (US). Despite these efforts, Chow stressed that international collaboration remains important.

“While we want to bring more supply chain back here in Canada, it doesn’t diminish the need for us to continue to work with the global community,” Chow said. To this end, VentureLab has inked a memorandum of understanding with American semiconductor hub Hudson Valley FastFab to collaborate on advanced manufacturing, engineering, and workforce development.

Speaking on stage alongside Chow, Hudson Valley FastFab chair and CEO Dick Thurston echoed some of the VentureLab CEO’s advice. Thurston argued that Canada already has a strong base when it comes to semiconductor knowledge, development, and creation. “Draw upon the foundation that already exists,” he said. “And it’s a tremendous one.”

With the tariffs that US President-elect Donald Trump has promised to impose—which may extend to Canadian imports—Debora believes the time is now to invest in hard tech innovation.

“I think the North American ecosystem is going to really have to triple down quickly on how we do things differently here,” Debora said. “Let’s not copy what works around the world. Let’s use technology to do it better.”

Feature image courtesy VentureLab.

The post “The world’s biggest problems are not going to be solved with software”: HardTech talks semiconductors and AI first appeared on BetaKit.

In the latest wave of leadership changes in Canada’s tech sector this year, Toronto-based Wattpad has found a new co-president in one of its long-time leaders: Aron Levitz.

Levitz joins from Wattpad Webtoon Studios—a division of Webtoon Entertainment, which is a subsidiary of South Korea-based conglomerate Naver Corporation—where he has served and will continue to serve as president. He will serve as co-president of Wattpad alongside KB Nam, and will report to Junkoo Kim, the founder and chief executive officer of Webtoon Entertainment.

Founded in 2006 by Allen Lau and Ivan Yuen, Wattpad provides online self-publishing platforms that serve as a community for readers and writers. Naver Corporation acquired Wattpad in 2021 for $754 million CAD, and later that year merged Wattpad Studios, Wattpad’s television and film adaptation division, and its own Webtoon Studios.

An alumnus of BlackBerry and Xtreme Labs, Levitz joined Wattpad in 2013 as head of business development, later building Wattpad Studios in 2017. In 2019, Wattpad Studios expanded into publishing with the launch of Wattpad Books, which brought Wattpad’s online novels to bookshelves in North America.

“After seven years building our entertainment and publishing business, I’m thrilled to be able to take on a new role as co-president of Wattpad, supporting our authors on and off our platforms, and growing the global community that has made Wattpad such a special place online,” Levitz said in a statement.

Levitz’s appointment follows a season full of leadership change in Canada’s tech sector, continuing a trend seen throughout 2024. In a Nov. 11 blog post, Vancouver-based Sanctuary AI announced that Geordie Rose is leaving his role as CEO. Chief commercial officer James Wells will fill the role in an interim capacity. 

Sanctuary did not explain why Rose is departing, and the news follows one of the startup’s other co-founders, Suzanne Gildert, leaving the company in the spring.

“Geordie is a pioneering force and visionary in the development of human-like intelligence and humanoid robotics, a category he created,” the company wrote in its blog post. “His leadership has established Sanctuary as a leader in this emerging field. His commitment to advancing our mission and this category has inspired our progress and positioned us at the forefront of innovation.”

The duo founded Sanctuary in 2018 to develop general-purpose, human-like robots that can perform work tasks effectively and safely in a variety of industries. Its sixth-generation robot was recognized by TIME as one of 2023’s best inventions. It unveiled its seventh-generation robot earlier this year.

Last week, Abtine Monavvari announced on LinkedIn that he was stepping down from his role as chief product officer at Chexy, the Toronto-based FinTech startup he helped co-found. 

While Monavvari did not provide a specific reason for his departure in the post, he described the decision as “bittersweet,” and expressed pride in the startup’s achievements.

“Building this company alongside the best people has been an honour and the most rewarding experience of my life,” he wrote in his post. “Together, we’ve moved mountains to turn painful rent payments into free travel, greater savings and better credit for thousands of Canadians.”

Chexy offers a platform that lets tenants make their monthly rental payments through their credit cards. The startup closed $4.1 million CAD in seed funding this year, and is led by co-founder and CEO Liza Akhvledziani.

RELATED: Swift Medical among the latest #CDNtech companies to appoint new leaders as industry executive turnover continues

Also last month, Toronto-based revenue management tech startup PureFacts hired Pete Hess as president. Hess joins most recently from the role of chief revenue officer for the Americas at InvestCloud. In his new role, Hess will take on day-to-day leadership of the company’s operations with founder and CEO Robert Madej. 

Founded in 1997, PureFacts provides revenue management solutions to wealth management, asset management, and asset-servicing firms. The company’s PureRevenue product allows users to calculate, collect, distribute, and optimize their revenues.

The appointment follows PureFacts receiving a majority-stake investment from private equity firm GrowthCurve. The Globe and Mail reported the transaction valued PureFacts at $250 million.

In late September, Calgary-based cleantech startup Carbon Upcycling appointed Juliane Kniebel-Huebner as its new COO. She joins the role after serving as the director of western canada development at Capstone Infrastructure Corporation and COO at Genalta Power Inc.

Carbon Upcycling is currently developing a commercial carbon capture and utilization system with a large Canadian cement plant. The startup was also recently named a finalist in Hello Tomorrow’s Global Challenge, a startup competition focused on deep tech firms.

RELATED: Cardata names Haywood Marsh CEO as Canadian tech executive turnover continues through the summer

Staying in Calgary, last month Katipult Technology named Beth Shaw as its new CEO, taking over from Gord Breese. Shaw enters the role with over 30 years of experience in syndication and equity capital markets. She previously held senior positions at both bank-owned and independent investment dealers, and has served as a strategic advisor to Katipult since February.

Katipult develops software infrastructure for the exchange of capital in equity and debt markets. The company said as part of her compensation, Shaw has been granted options for three million shares in the company at a price of $0.05 cents.

“As the industry continues to evolve, strategic technology adoption remains ever more important,” Shaw said in a statement. “I believe Katipult is in a position to provide a cost effective and timely suite of services to help the investment community optimize workflows and enhance service delivery to wealth and asset managers, institutional investors and corporate clients.”

In September, Toronto-based StackAdapt hired Cassandra Hudson as its new CFO. She appears to be replacing Mehmet Shah, who, according to his LinkedIn, served in the role until July 2024 and now serves as senior vice president of finance.

Most recently, Hudson was CFO of since-acquired EngageSmart, where she built and led the strategic finance function, prior to which she was vice president of finance and chief accounting officer at Carbonite. Hudson’s appointment comes on the heels of StackAdapt naming Darcie Henry as chief people officer, Ryan Nelsen as chief marketing officer, and Vitaly Pecherskiy appointment to the CEO role.

RELATED: MindBridge headlines slew of #CDNtech companies making executive leadership changes

In October, Calgary-based energy data company geoLOGIC appointed Satvinder Flore as CEO and a board member, taking over from David Hood. Hood has assumed the role of chair of the company’s board and will continue to be involved in the company’s growth and strategic direction as a major shareholder.

geoLOGIC, which provides data, software, and analytics to customers in the energy sector, said Flore has held senior-level roles with several multinational companies in North America, Europe and Southeast Asia.  Most recently, Flore was Executive Vice President leading the energy, resources and industrial sectors for WSP Global Inc., a Canadian engineering consulting firm.

“Satvinder and I share a common vision for the future of geoLOGIC, and I am confident that he is the right person to lead our team to even greater success. I look forward to working with him to that end,” outgoing CEO Hood said in a statement.

Throughout 2024, Canadian tech companies have seen a steady stream of executive changes, with dozens bringing in fresh faces or parting ways with long-standing leaders. The list includes Unbounce, MindBridge, Ratehub, NowVertical, Top Hat, Untether, Cinchy, Alida, and many more.

Feature image courtesy Unsplash. Photo by charlesdeluvio.

The post Aron Levitz named co-president of Wattpad as #CDNtech executive turnover continues through the fall first appeared on BetaKit.

The Canadian Legal Information Institute (CanLII) has filed a lawsuit against artificial intelligence (AI) startup Caseway AI, alleging Caseway violated its terms of use and infringed copyright by scraping 3.5 million records from CanLII’s database. The suit follows a failed cease-and-desist letter the institute sent to Caseway last month, demanding the startup delete and end use of any data allegedly owned by CanLII.

Caseway founder alleges suit is “an attempt to obtain a court order for data discovery without any concrete knowledge of infringement.”

In the lawsuit, filed in the British Columbia Supreme Court earlier this week, CanLII alleges that Caseway has created a business by wrongfully taking CanLII’s work through a bulk and systemic download from the database without permission or compensation. The suit adds that, in doing so, Caseway has breached CanLII’s terms of use and infringed on its copyright. The institute is seeking an injunction to restrain the startup from reproducing the allegedly stolen work, as well as monetary damages. 

The AI startup, incorporated in both Dublin, Ireland and Vancouver, launched last month with a chatbot touted as a legal research assistant meant to fetch, explain, and summarize Canadian legal information and court decisions. Caseway claims its model avoids hallucinations by being trained to admit when it does not have access to an answer rather than trying to generate one. 

CanLII, a non-profit organization founded by the Federation of Law Societies of Canada, provides an online database of court decisions, legislation, and legal commentary from all Canadian courts. 

CanLII’s terms of use prohibit masking the origin of documents published on CanLII that are incorporated into another website, and forbids the bulk or systematic downloading of documents, including by programmatic means. 

Caseway founder and CEO Alistair Vigier rebutted CanLII’s claims in a statement to BetaKit, saying that the court documents Caseway is trained on are public record and that neither he, nor anyone at Caseway, has “seen or accepted” CanLII’s terms of use. CanLII’s terms of use, hyperlinked on the bottom of every one of its webpages, states that every person who accesses the website consents to the terms of use as a user. 

The lawsuit alleges that CanLII was alerted to copies of its content, amounting to over 120 gigabytes and 3.5 million records, being placed on a host that had the same IP address that was used to develop and host the Caseway platform. The filing adds that the investigation into how this occurred is ongoing. In response, Vigier alleged that the lawsuit is “an attempt to obtain a court order for data discovery without any concrete knowledge of infringement.”

“IP addresses are tied to individual computers, not to companies,” Vigier said, without directly addressing questions posed by BetaKit as to whether the company obtained any records or data using CanLII. “As CEO, I have never instructed anyone to copy CanLII’s content, nor has our company stored anything owned by CanLII,” he said. 

In the filing, CanLII claims it has “reviewed, curated, catalogued, and enhanced” the publicly available court decisions, legislation, and secondary sources in its database at significant cost and effort. It claims its work includes structuring the case data, inserting and extracting keywords, summarizing court decisions, and providing original analysis. 

Richard Gold, director of the Centre for Intellectual Property Policy and a law professor at McGIll University, told BetaKit that the copyright infringement component of the case would rely on whether Caseway made copies of the cases or simply looked at and analyzed them. Gold also said the test would be whether CanLII exercised “skill and judgment” in adding its enhancements to the public-domain (and therefore non-copyrightable) court documents it hosts.

“Correcting errors would not likely meet that [copyright] standard,” Gold said. “Adding hyperlinks, if done routinely by most people in the trade, would [also] not but if unique to CanLII may be. As for metadata, was it routine or did it require choice?” 

Either way, when asked multiple times whether Caseway scraped any documents or data from CanLII, Vigier explicitly stated that Caseway “does not use any CanLII data or enhancements,” only the court decisions, but conceded that Caseway “still [doesn’t] understand what enhancements they suggest they created.”

Vigier added that he “never uses” CanLII because he prefers to use Caseway for his legal research, because it provides direct links to original court sources—including CanLII—so humans can verify Caseway responses. 

The lawsuit is a Canadian twist on the torrent of legal action against AI giants like OpenAI, Microsoft, Anthropic, and Meta from intellectual property holders like newspapers, authors, artists, and some of the world’s largest record labels. 

RELATED: Academics, nonprofits caught in middle of data consent fight as AI companies push for access to copyrighted works

BetaKit has previously spoken with experts that assert academics, nonprofits, and early-stage AI startups are struggling to find material they can access for free to train their models, especially as a growing number of web publishers are attempting to bar AI web crawlers from scraping their content. 

Colin Lachance, a legal AI consultant at PGYA and former president and chief executive officer of CanLII, echoed this sentiment in a LinkedIn post reacting to the lawsuit. Lachance said the lawsuit is reasonable, but notes the bigger picture is that Canada suffers for lack of bulk access to caselaw. In a Canadian Lawyer piece where he is quoted that, Lachance sympathized with Caseway, noting “There really is no other way for anybody to get bulk case law unless they have a relationship with the courts to receive it,” adding that to get access to Canada’s three million public court documents, the only tools available are CanLII and the library system of the Bar of Quebec.

Lachance said on LinkedIn that “Caseway clearly has zero understanding of what is permitted or possible in Canada when it comes to bulk access to case law.” 

Vigier claimed that, since the lawsuit, Caseway has seen more than 200 lawyers and paralegals sign up for its monthly subscription service. He said that Caseway’s next major focus is on creating bespoke AI agents for specific legal workflows, such as generating drafts of a legal document after lawyers enter a few details about the people involved. Vigier added that Caseway doesn’t plan to use information uploaded by law firms to train its AI. 

“People like Elon Musk often get sued because they are change agents,” Vigier said. “I see myself as a change agent in the legal industry, which is naturally litigious.”

Caseway has yet to file its defence and CanLII’s allegations have yet to be proven in court. BetaKit reached out to CanLII for comment but did not hear back by publication time. 

Feature image courtesy Wesley Tingey via Unsplash.

The post Online legal database CanLII sues Caseway AI for copyright infringement first appeared on BetaKit.

Dean Skurka, president and CEO of Toronto-based cryptocurrency company WonderFi, was reportedly kidnapped and held for ransom in downtown Toronto yesterday.

A Toronto Police Service spokesperson told BetaKit that police were called about a kidnapping in the area of University Ave. and Richmond St. W. just before 6 p.m. on Nov. 6 after suspects forced the victim into a vehicle and made a demand for money. The victim was later located in Centennial Park in Etobicoke uninjured.

The Toronto Police Service spokesperson declined to confirm the name of the victim to BetaKit or share further details about the incident, noting that the investigation remains ongoing.

WonderFi confirmed to BetaKit that Skurka was involved in an “incident” yesterday but is now safe.

However, CBC News, which was first to report the kidnapping news, identified the victim as Skurka. According to CBC News, Skurka was released after a ransom of $1 million was paid electronically.

A WonderFi spokesperson confirmed to BetaKit today via email that Skurka was involved in an “incident” yesterday but is now safe.

“[WonderFi] is providing its full cooperation to the Toronto Police Service on this active investigation,” the spokesperson told BetaKit. “The company can confirm that client funds and data remain safe, and were not impacted by this incident. Our top priority is ensuring our employees’ safety.”

BetaKit has also reached out to Skurka for comment.

Skurka addressed the incident in LinkedIn and Twitter posts on Nov. 8. 

“Thank you to everyone who has reached out over the last few days. I am grateful for the support from the Toronto business community and the global crypto community. Toronto is not just our headquarters, it’s a city of innovation and resilience, and we’re proud to be a part of it,” he wrote.

“I want to reassure everyone that I am safe and doing well,” Skurka added. “The investigation by Toronto Police into this incident is ongoing with my full cooperation.”

Skurka emphasized that WonderFi is “more committed than ever to building the future of crypto,” adding, “this won’t slow us down!”

WonderFi owns two of Canada’s most popular crypto exchanges in Bitbuy and Coinsquare, as well as crypto payments platform SmartPay and a stake in crypto custodian Tetra Trust. The Toronto Stock Exchange-listed firm reported its third-quarter earnings on Nov. 5.

High-profile figures in crypto face significant security risks. In “$5 wrench attacks,” robbers threaten or physically attack people known to hold large amounts of crypto seeking their private keys.

Anthony Di Iorio, the Toronto-based co-founder of Ethereum, announced plans to leave the crypto industry in 2021 due to security concerns, though he returned a year later with the launch of Andiami.

Kidnappings involving crypto are not uncommon. A historic Bitcoin theft in the United States (US) was recently tied to a kidnapping.

Crypto-related kidnappings have also occurred in Toronto before in recent years with the cases of self-proclaimed ‘Crypto King’ Aiden Pleterski (who has since been charged with fraud) and wealthy Chinese student Wanzhen Lu.

Per a recent report from TRM Labs, crypto hacking thefts doubled during the first half of 2024 on a year-over-year basis, driven in part by rising crypto prices. 

Jameson Lopp, co-founder and chief security officer at Casa, a US security firm that focuses on protecting cryptocurrency owners, told CBC News that the rate of incidents where physical violence is used to steal Bitcoin tends to correlate with the price of Bitcoin, which hit a record high this week.

UPDATE (11/08/24): This story has been updated to include a statement from Dean Skurka.

With files from Alex Riehl.

Feature image courtesy WonderFi.

The post WonderFi CEO Dean Skurka kidnapped, released after reportedly paying $1-million ransom first appeared on BetaKit.

The Government of Canada has ordered social media giant TikTok to wind up its operations in Canada, but refrained from banning use of the short-form video platform outright.

In a Nov. 6 statement, Innovation Minister François-Philippe Champagne indicated that with this move, the federal government aims to address “specific national security risks” related to the operations of TikTok’s Chinese parent company ByteDance in Canada through TikTok Technology Canada. Champagne did not elaborate on the nature of these risks.

With this move, Minister Champagne said the federal government aims to address “specific national security risks.”

Champagne said that the decision to ban TikTok Technology Canada was based on information and evidence gathered as part of a national security review under the Investment Canada Act, plus advice from the country’s security and intelligence community and other government partners. He noted that despite this order, the Government of Canada is not blocking Canadians’ ability to access the popular video platform or create content for it.

“The decision to use a social media application or platform is a personal choice,” Champagne added. “It is important for Canadians to adopt good cyber security practices and assess the possible risks of using social media platforms and applications, including how their information is likely to be protected, managed, used and shared by foreign actors, as well as to be aware of which country’s laws apply.”

TikTok, which said the federal government’s decision will impact hundreds of jobs in Canada, plans to challenge this order in court. 

“Shutting down TikTok’s Canadian offices and destroying hundreds of well-paying local jobs is not in anyone’s best interest, and [yesterday’s] shutdown order will do just that,” a TikTok spokesperson told BetaKit. “We will challenge this order in court. The TikTok platform will remain available for creators to find an audience, explore new interests and for businesses to thrive.”

RELATED: Canadian privacy commissioners launch joint investigation into TikTok data use

University of Ottawa law professor Michael Geist, who holds the Canada Research Chair in Internet and E-commerce Law, described the feds’ decision as “curious” in a blog post. 

“There may well be good reasons to ban the app if it poses security and privacy risks that differ from those of other platforms, but banning the company rather than the app may actually make matters worse since the risks associated with the app will remain but the ability to hold the company accountable will be weakened,” Geist argued.

Geist added that this move appears to “undercut” the federal government’s digital policies, including the proposed Online Harms Act and the Online Streaming Act. “If there are real security and privacy issues—and Minister Champagne says there are—the government should surely take action.”

Last year, the federal government began prohibiting public servants from downloading or using TikTok on government-issued phones, and Canadian privacy commissioners launched a joint investigation into TikTok data use to ensure it complies with Canadian privacy legislation.

RELATED: “Canary in the coal mine”: TikTok presentation shows Big Tech’s influence on Bill C-11 debate

For years, TikTok has faced scrutiny from countries around the world about its potential use as a tool for propaganda or spying. Critics have expressed concern that TikTok and its Chinese owner ByteDance may put sensitive user data into the hands of the Chinese government and use the platform to support the dissemination of misinformation. TikTok has repeatedly denied this and attempted to distance itself from ByteDance.

Canada is not alone. Other countries that have taken steps to rein in TikTok include Afghanistan, Australia, Belgium, Denmark, India, Nepal, the Netherlands, New Zealand, Norway, Somalia, Taiwan, the United Kingdom, and the United States (US).

During his first term, US President-elect Donald Trump pushed to ban TikTok. Trump’s successor Joe Biden carried forth those efforts, inking a bill last year to force TikTok to cut ties with its Chinese owner by early 2025 or face a ban in a move that TikTok has also challenged. Earlier this year, Trump reversed his decision to ban TikTok, and it remains to be seen how he will approach TikTok once he takes office.

Feature image courtesy Solen Feyissa via Flickr.

The post Citing national security risks, feds order shutdown of TikTok’s Canadian arm but forgo outright ban first appeared on BetaKit.

Shares in Montréal-based Lightspeed Commerce and Vancouver-based Well Health Technologies both climbed after the companies reported reaching new nine-figure revenue milestones in their latest quarterly earnings.

Both Lightspeed and Well posted strong revenue growth in their latest fiscal quarters, with Lightspeed reporting $277.2 million USD and Well reporting $251.7 million CAD, a year-over-year increase of 20 percent and 27 percent, respectively.

That growth has translated into new annualized revenue milestones for the companies. Well Health’s revenue run rate now exceeds $1 billion CAD, and on a trailing 12-month basis, Lightspeed’s revenues now exceed $1 billion USD. 

Lightspeed postpones Capital Markets Day amid strategic review

In a press release announcing its earnings, Lightspeed said it is postponing its Capital Markets Day in light of the ongoing strategic review of the business that was announced in September.

The suspension of the Capital Markets Day, which would give investors a look into Lightspeed’s strategy, performance, and plans that was initially scheduled for Nov. 20, follows months of speculation that the retail tech giant is planning a sale of the business. Lightspeed confirmed the review was underway shortly after Reuters and The Globe and Mail reported that the company was exploring a potential sale.

For its second quarter for fiscal year 2025, which ended Sept. 30, 2024, Lightspeed, which reports its earnings in US dollars, reported a net loss of $29.7 million, down from $42.5 million in the same quarter last year. Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $14 million, exceeding its $12-million forecast.

Lightspeed’s transaction-based revenue reached $183.8 million in Q2 2025, an increase of 33 percent year-over-year, while its subscription revenue increased by six percent year-over-year to $85.5 million.

“I am proud to announce that on a trailing twelve month basis, Lightspeed now exceeds $1 billion in revenue,” Lightspeed founder and CEO Dax Dasilva said in a statement. “And we continued our rapid pace of product innovation, releasing dozens of new features in the quarter aimed at helping complex, high-volume SMBs [small and medium-sized businesses] to manage and grow their businesses.”

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