The fast lane to innovation
When journalists asked General Motors’ global head of engineering, Mark Royce, why the company hadn’t set up in Silicon Valley, he answered that Waterloo Region and Canada were as good a location, if not a better one, for the world’s third-largest automaker to innovate. In February, GM Canada followed through by opening 2908 at Communitech, its new innovation lab in the Communitech Hub. “We expect to see more change in the next five years than we have in the last 50,” GM Canada President Steve Carlisle said. “With our 2908 at Communitech lab, we’ll knock down old approaches, we’ll experiment, find new partners, and boldly go where future mobility is headed.”
Just as eager to keep up with the quickening pace of disruption was Fairfax Financial Holdings, which launched its FairVentures lab in the Hub later in the month. Fairfax has significant investments in the insurance industry, another sector where a technological revolution is under way. These changes were the subject of Insurance Disrupted, a gathering that featured a rare public appearance by Paul Desmarais III, whose family’s Power Corporation is also deeply invested in insurance.
Home and away
With operations in both Waterloo Region and Toronto, amid the country’s most dynamic innovation region, Canada’s top insurers are among those who stand to benefit from a more unified corridor between the two cities. To that end, two mayors from each end of the corridor – Toronto’s John Tory and Kitchener’s Berry Vrbanovic – joined forces to step up promotion of the region internationally.
In a Globe and Mail op-ed, John Kelleher and Laura McGee of McKinsey & Co. cited the corridor’s potential as key to building a stronger tech ecosystem for Canada.
The Financial Post cited the top-quality talent in the corridor for luring a growing number of Silicon Valley companies to set up operations here, the latest of which is Everalbum, a San Francisco-based startup with backing from Peter Thiel. Everalbum has acquired Pout, a University of Waterloo Velocity startup, to bolster its fledgling Waterloo Region satellite office.
In a dissenting view on the value of U.S. tech firms establishing Canadian operations, Macleans writer Chris Sorensen argued that Canada risks becoming a “branch-plant economy” by surrendering opportunities its own entrepreneurs should be pursuing. The piece unleashed a torrent of counter-arguments from Canadian tech luminaries such as Hootsuite’s Ryan Holmes, Michael Serbinis (Kobo; League) and Silicon Valley-based expat venture capitalist Lars Leckie, who wrote that “the path to building and supporting a world class technology sector in Canada comes, unsurprisingly, from more experience in the technology space” – experience that large global tech companies such as Google provide when they set up satellite operations here.
Moving in the other direction, Canadian startups looking to build a presence in key U.S. markets received another boost in February, with the launch of Communitech NYC in midtown Manhattan. The announcement followed on the heels of January’s launch of Canada House in San Francisco. Jim Moss, CEO of Plasticity Labs, explained what a New York home base will mean to his growing company.
Construction-management software startup Bridgit is another Waterloo Region startup that will focus heavily on the American market this year. In February, the company brought on tech veteran Jeff Fedor as Chief Technology Officer, with recruitment of engineers his top priority.
Bridgit is among the most promising graduates of the first cohort of Communitech Rev, a sales-focused accelerator that launched a year ago. Rev unveiled its third cohort in February, while Cohort 2 companies continued their progress.
FameBit, a Waterloo Region startup, drew significant media attention for its platform, which connects brands and YouTube influencers. The company, an alum of the 500 Startups seed fund, has partnered with e-commerce juggernaut Shopify, another Canadian company with a growing presence in Waterloo Region.
Sortable, whose software boosts ad performance for publishers, is aiming for 10x growth this year, and reached 130 million unique viewers in January.
TritonWear, a UW Velocity company that makes a head-mounted wearable for swimmers, is now selling into 12 countries as its team has tripled in size over the past year.
eSentire, the Waterloo Region cyber security company that protects clients against attacks from inside the firewall, raised US$19.5 million in February, and is on track to employ 300 people by year’s end.
The investment coincided with news that venture capital activity in Canada hit a 10-year high in 2015, a trend likely to continue this year, according to the Canadian Venture Capital & Private Equity Association. At the same time, there are signs of VC investors becoming more choosy about the companies they support.
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