Last year turned out to be a very good year for a lot of tech execs.
A record number of privately held startup companies — 959 around the world — reached that revered unicorn status, meaning their firm hit the $1-billion valuation.
That’s up 69 per cent from the previous year according to a new report from CBInsights. And Canada’s herd is steadily growing, too. We’re not even two weeks into 2022, and the market is already seeing new unicorns emerge. Assent Compliance, an Ottawa supply-chain-management software maker, announced a $350-million U.S. financing round led by Vista Equity Partners Management LLC. “This is one of the largest raises in Canadian software company history,” the company said in a release.
Why are there so many unicorns? Foreign funding, particularly from south of the border, at a very early stage is playing a big role, experts say. “Foreign funders have larger capital pools, better relationships with prospective senior employees and arguably better networks,” says Charles Plant, founder of The Narwhal Project, an organization that helps emerging tech companies.
He adds that firms financed by American investors, “get more money sooner, grow faster, get more follow-on financing and are thus propelled faster to unicorn status.”
Proof point: Some of the largest deals in 2021 had significant backing from U.S. investors, from Softbank’s participation in online finance firm Clearco’s $268-million round to TCV’s investment in identity tech startup Trulioo’s $476-million Series D round. In fact, the majority of the unicorns in Canada fall within the internet software and services industry, such as PointClickCare, Figment and Visier.
Will this pace continue in 2022?In one word, yes. Chris Albinson, CEO of Communitech, a Waterloo-based business accelerator says that Canada, “now has a critical mass of founders building companies to global scale, we can expect to see more joining the ranks of Magnet Forensics, D2L, ApplyBoard, Clio and Faire very soon.”
But 2022 might see Canadian unicorns emerge from a different sector. The Narwhal Project is tracking Canada’s cleantech industry closely, with a particular interest on five companies who could soon achieve the magical status.
Toronto company helping remote areas bridge the digital divide
Access to broadband is still a major issue in many regions across the country. But Canadians living in remote areas are now a step closer to being able to do things that most of us take for granted, like stream movies or attend Zoom meetings.
Toronto-based startup Ecopia AI won a contract from the Government of Canada to provide next-generation mapping data, a key step in deploying high-speed internet.
Using artificial intelligence, machine learning, satellite and aerial imagery, Ecopia AI’s high-definition maps will identify buildings across rural Canada that require broadband internet access and can be serviced by broadband, including many locations in remote and Indigenous communities.
How big of a problem is this? Despite significant public and private investments, more than half of rural communities don’t have access to broadband internet.
How will they fix it? It’s a two-step process. Stakeholders need to first identify precisely where coverage gaps exist, because as Jon Lipinski, co-founder and president of Ecopia says, “current maps are too coarse to identify broadband-served/unserved locations on a building-by-building basis.” Once that’s complete, the infrastructure, which is both costly to deploy and maintain, can be installed.
What’s next: The map is currently in production and will be delivered in March 2022. Once complete, the mapping data will be used by the Government of Canada and other stakeholders in the telecommunications industry to plan and deploy the infrastructure required to bridge the digital divide.
Canadian cleantech companies clean up in world rankings
For the last five years, the Canadian tech community has cleaned up in the annual Global Cleantech 100, an annual ranking of the world’s top 100 cleantech ventures that are tackling the planet’s most pressing environmental issues. This year is no different, with 13 Canadian companies making the list.
“The 2022 list is full of deeper tech, hardware tech, solutions taking on some of the hardest problems in the challenge to reach our global net-zero aspirations,” says Richard Youngman, CEO of the Cleantech Group.
What kind of solutions are we talking about? This year’s cohort of Canadian startups and scale-ups are electrifying heavy-duty trucks, trapping CO2 in concrete, pioneering fusion power and using artificial intelligence software to optimize water-treatment facilities.
Why does this list matter? Governments, corporations and communities are all making ambitious commitments to combat climate change. But while the pledges are impressive, executing these plans requires resources, focus and the right set of tools. It’s becoming increasingly clear that Canadian tech can play a significant role in helping tackle these climate plans. We need to pay attention to these companies because, “they are most likely to make a major impact in the next five to 10 years,” says Richard Youngman, CEO of the Cleantech Group.
Next steps: Many of the Canadian startups on the Cleantech 100 list have deployed pilot projects abroad and have secured global clients. In the decade ahead, industry leaders advise that Canadian businesses need to keep their eye on the products emerging in their own backyard and invest and adopt transformational tech to help scale these solutions. Investment and customers are key.
In other news
- Acuitas Therapeutics, the biotechnology company responsible for key elements in the Pfizer-BioNTech COVID-19 vaccine has signed a deal with Pfizer. This agreement will allow Acuitas to work closely with Pfizer to advance new vaccines and therapeutic products.
- GE Digital, the software arm of General Electric, acquired Opus One Solutions, a Toronto-based software engineering company that helps utility companies adapt their energy grids to make better use of renewable power. According to the company release, the acquisition reinforces GE Digital’s commitment to helping its customers transition to a sustainable grid.
- Kitchener-based Nicoya Lifesciences, which uses AI and nanotechnology to make analytical tools for medical researchers, announced a $20-million Series A extension. The round included participation from strategic investor Agilent Technologies, Export Development Canada, BDC Capital, MaRS IAF, Garage Capital and others.
- Toronto-based Hydrostor, which develops electricity storage projects, secured a U.S.$250-million investment from Goldman Sachs Asset Management. Armed with deeper pockets, Hydrostor will use the capital for the development and construction of projects in Australia and California that are well underway.
- Future Fertility, a Toronto-based startup that applies artificial intelligence to reproductive medicine, raised nearly $7.6 million in a Series A financing. The company says the financing will help further develop its ground-breaking technology and to help improve IVF outcomes.
Amanda Whalen writes about technology for MaRS. Torstar, the parent company of the Toronto Star, has partnered with MaRS to highlight innovation in Canadian companies.
