A capital month!
Tech investors are still keeping their purse strings tight, but several deals in February showed that solid companies in growing markets can still attract capital.
Mappedin, a 12-year-old Waterloo-based company that provides digital maps of indoor spaces, raised CDN$8.6 million through a Series A round.
Mappedin has generated a profit for the past three years, said CEO and co-founder Hongwei Liu. The Series A investment will help the company grow faster, he said, adding that Mappedin plans to increase its workforce from 88 to “north of 110” by the end of 2023.
In another deal, Waterloo-based talent platform Plum raised US$6 million to accelerate sales, marketing and product development.
CEO and co-founder Caitlin MacGregor described the investment as a “pre-series” round that’s structured as a convertible note. The deal was led by Pearson Ventures, the corporate venture capital arm of global learning company Pearson.
In Kitchener, Swap Robotics celebrated a US$7-million seed round led by SOLV Energy, a California-based provider of solar services. Founded in 2019, Swap makes robotic vehicles for plowing snow and cutting the vegetation that grows around large solar-energy farms.
Waterloo-based KA Imaging is working with Grand River Hospital to improve patient outcomes with a portable X-ray device that provides health-care workers with high-quality images right at the bedside.
The commercialization project is supported by the Coordinated Accessible National Health (CAN Health) Network, a federally funded initiative that’s partnering with Communitech to get more Canadian innovation into the health-care system.
By the way, Communitech is wrapping up a Future of Health initiative by teaming up with CityAge to co-host a digital event March 29 that will showcase people and organizations that are demonstrating how collaboration can help solve health-care challenges through innovation.
Job openings and layoffs
While layoffs continue in the tech sector, some encouraging job stats surfaced in February.
Turning first to layoffs… An unspecified number of Google Canada employees received pink slips in early February following parent company Alphabet’s announcement in January that it was laying off 12,000 workers globally.
Google declined to say how many of its Canadian workers were let go, or which offices lost staff. Estimates in the media put the number of layoffs at the company’s Kitchener office at between 150 and 300.(Before the downsizing, Google’s Kitchener staff count stood at about 1,400 people.)
Looking at tech employment more broadly, a story by The Logic noted that despite the number of tech layoffs in Canada (and globally), Canada’s tech sector employs more people now than before the start of the COVID-19 pandemic three years ago.
Other indicators suggest there are plenty of job openings in Canadian tech, especially for those with core skills like software development. Communitech’s Work in Tech Job Board had 7,880 jobs advertised as of end of day Feb. 28. (Communitech is also helping displaced workers through The Help List, a roster of tech talent that helps connect skilled workers with companies that are hiring.)
Trust the data
A recent State of the Markets report by Silicon Valley Bank includes some interesting data that suggest Canadian tech is riding out the current economic turbulence better than our American neighbours.
While trend lines are similar, VC investment fell far more in the U.S. (60 per cent) than in Canada (36 per cent) between Q4 2021 and Q4 2022. Other stats: Canadian companies had higher revenue-growth rates than U.S. companies of the same size; Canadian companies are generally burning less cash than their U.S. counterparts (which suggests they’re performing more efficiently); and Canadian startups benefit from non-dilutive government funding, “making private investments in these companies go further.”
“We expect to see continued U.S. investor interest in Canadian startups given the non-dilutive funding available, lower pricing and high performance,” the report concludes.
As Communitech CEO Chris Albinson said in a Linkedin post: “The data is in – Canadian tech continues to outperform the U.S. for the last five quarters in a row!”
Google is taking heat for quietly blocking about four per cent of Canadians from accessing certain news content.
While Google called it a “test”, a number of observers saw it as a not-too-subtle response to Bill C-18, federal legislation that would require large tech companies to pay publishers for sharing their news content online.
Parliament’s Heritage Committee has summoned four top Google executives to come to Ottawa to explain themselves.
A hedge fund that owns approximately 10.9 per cent of the subordinate voting shares in Waterloo-based Magnet Forensics (TSX:MAGT) is campaigning against the company's plan to accept a CDN$1.8-billion acquisition bid by U.S. private-equity firm Thoma Bravo.
California-based Nellore Capital Management issued an information circular in which it says the per-share offer of CDN$44.25 is underpriced. It also questions a provision that would allow Magnet's three principal shareholders – founder Jad Saliba, CEO Adam Belsher and board Chair Jim Balsillie – to roll most of their shares into a proposed new company consisting of Magnet Forensics and Atlanta-based Grayshift.
In response, the two members of Magnet's independent special committee that evaluated and recommended the Thoma Bravo offer issued their own statement, saying the takeover bid "offers the most compelling value creation opportunity for all shareholders."
Meanwhile, The Globe and Mail's ROB Magazine ran an interesting feature story on Magnet's digital-forensics technology. Both the story and an editor's column also noted that Balsillie has been an outspoken advocate for keeping Canadian intellectual property in the hands of Canadian owners.
A story in the Waterloo Region Record takes a look at the ongoing struggle to balance office-space needs with hybrid and remote work trends.
Those interviewed said hybrid is here to stay. At Kitchener-based smart-city company Miovision, about 76 per cent of staff work in the office only once a week or less.
“People wanted hybrid,” said Jill Jutzi, Miovision’s VP of People and Culture. “So that’s how we managed it – at the end of the day, we will always be a hybrid environment.”
That view was echoed by Michael Litt, co-founder and CEO of Kitchener-based Vidyard.
“Once as a business you taste the fruits of having no geographic constraints on your talent pool, you will never go back,” he told The Record.
Communitech columnist Alex Kinsella wrote a great piece about Marko Savic’s transition from tech founder to YouTube foodie.
After selling FunnelCake – a startup that helped sales and marketing teams communicate better – Savic is now launching Probably Worth Sharing, a YouTube channel and newsletter “where he shares stories of food, recipes, cooking tips and the people behind his favourite restaurants.”
In another column, Kinsella tells us about the family and colleagues of a local founder who are working to raise awareness about the need for stem cell donations.
Lorne Wallace, founder of Lone Wolf Technologies, was diagnosed last year with myelofibrosis, an aggressive form of leukemia. Lorne’s wife, Kelli Todd-Wallace, says the family is sharing his story to encourage a wider range of donors to register.
Meanwhile, M-Theory columnist Melanie Baker ponders our relationship with work in an era of layoffs. Love, fear and trust all play a roll. Of these, she concludes, trust is the most important and the hardest to earn and keep.
In a related column, Baker presents tech execs with the best and worst ways to deliver layoff news (e.g, don’t do it while you’re vacationing in French Polynesia).
ESCRYPT now ETAS
The Waterloo cybersecurity facility formerly referred to as ESCRYPT has been rebranded ETAS.
Likewise, the automotive cybersecurity solutions previously branded as ESCRYPT are now offered under the brand of ETAS, a full-service provider of solutions for the software-defined vehicle.
The Waterloo facility, which employs 30 people, has roots stretching back to TrustPoint, an IoT security company founded by the late Dr. Scott Vanstone, a renowned cryptographer, and Sherry Shannon-Vanstone.
“We’re excited to have our cybersecurity solutions within the ETAS brand, and beyond that, to grow our presence in Waterloo to provide the automotive supply chain, our customers, with a comprehensive portfolio of solutions for software-defined vehicles,” said Ken Schultz, General Manager of ETAS Canada.
In other news
- Smart-city company Miovision of Kitchener has acquired Winnipeg startup MicroTraffic. The deal adds collision-predictive technology to Miovision’s road-safety vision analytics.
- Waterloo-based eleven-x, which makes smart-city wireless IoT tech, announced a major installation of its eXactpark smart-parking solution in Arlingtion County, Virginia.
- EdTech unicorn ApplyBoard is launching a new scholarship program. The International Alumni of Impact awards will honour the achievements of former international students by providing scholarships in their names to incoming international students.
- Cybersecurity company eSentire released a report on a growing threat for law firms. The Waterloo-based company says it shut down 10 cyber attacks across six different law firms in January and February alone.
- Guelph-based A Friendlier Company, which cleans reusable plastic containers and is a graduate of Communitech’s Fierce Founders program, received a $500,000 grant from the Federal Economic Development Agency for Southern Ontario (FedDev Ontario).
- OTTO Motors, a division of Kitchener-based Clearpath Robotics, has been recognized as a Top 10 global robotics company in Fast Company’s 2023 list of Most Innovative Companies.
- Waterloo-based Planitar has launched a new service called iGUIDE Preview, which gives customers access to iGUIDE 3D tours with interactive floor plans within minutes of uploading project files to the iGUIDE cloud.
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