Tech Roundup for February 2017

…to report that Dejero Labs is the latest homegrown Waterloo Region tech company to secure a major infusion of growth capital. Dejero, whose technology is used by the world’s top news broadcasters to report live from just about anywhere without satellite trucks, raised CAD$14 million from Toronto-based Wellington Financial, a private-equity firm. One of Canada’sfastest-growing tech companies for three years running, Dejero also appointed a new CEO, Bruce Anderson, who succeeds Brian Cram.

Dejero’s news, the first significant raise for a Waterloo Region tech firm to be announced in 2017, followed a report that 2016 was a good year for investment in venture-backed Canadian companies. While the volume of deals globally dropped 10 per cent from 2015, deal volume rose seven per cent in Canada. Additionally, while global deal value dropped 23 per cent last year, it remained virtually flat in Canada, at $1.7 billion invested. Waterloo Region saw a 65 per cent increase in VC deal value in 2016, with $253 million invested, including $120 million in Thalmic Labs, the wearable computing company.

Growth at all stages

Thalmic, incidentally, was dubbed “Canada’s hottest startup” in an Inc. profileof the company best known for its Myo gesture-control arm band. Thalmic is building a manufacturing facility to develop future products that promise to change human-computer interaction.

Another Waterloo Region high-growth company, Clearpath Robotics, landed a deal to provide a Toyota assembly plant in Mississippi with one of its OTTO self-driving factory vehicles. The vehicle will be used to load and deliver tires to the plant’s Corolla assembly line. In a Globe and Mail column, Toronto marketing expert April Dunford cited Clearpath’s decision to launch the OTTO Motors division as an example of product positioning done right.

Speaking of deals south of the border, MappedIn landed an agreement to provide its indoor wayfinding software to Simon Property Group, one of the largest retail landlords in the U.S., with 210 properties. The deal will mean growth for the company, which currently employs about 35 people.

At the other end of the size spectrum, software giant OpenText is showing no signs of slowing down its growth through acquisitions. The company, which began as a University of Waterloo project to digitize the Oxford English Dictionary and developed the first online search engine in the early 1990s, is now the world’s largest vendor of document organization and storage software for corporations, with a market capitalization of US$8.7 billion.

UW has long been noted as a cauldron for tech commercialization, and a recent report from a British research firm underscored that fact by pointing out four current “unicorns” – non-publicly-traded startups valued at more than $1 billion – were founded by six Waterloo alumni. One of those founders, Ted Livingston of Kik Interactive, was the subject of a lengthy profile in the Waterloo Region Record.

Whatever their size, tech companies face challenges as they scale, a point brought home by experts during two separate speaking engagements in Waterloo Region last month. At a Communitech breakfast, Stanford University professor Huggy Rao talked about the mistakes companies make when scaling. Later in the month, in an interview for Communitech’s Nimble Hippo Radio podcast, Sandvine CEO Dave Caputo highlighted the importance of fostering a healthy workplace culture as a company grows.

AI

On the topic of corporate documents, Waterloo Region startup Ark Paradigm was featured in a recent piece in Canadian Business. The company is using machine learning to automate financial reporting and reduce human error. A few days later the same publication ran a story about Toronto AI startup knote, founded by a former student of Waterloo’s two universities. knote offers software that can scan, analyze and redact sensitive material from legal documents.

As a longstanding centre of excellence for research in artificial intelligence, the Toronto-Waterloo Region Corridor has spawned numerous AI-related companies. Now, a scientist at Waterloo’s Perimeter Institute for Theoretical Physics is exploring ways to use algorithms designed to solve AI problems to generate breakthroughs in quantum physics.

Corporate innovation

Business Development Bank of Canada (BDC), the arm’s-length federal government institution devoted to funding entrepreneurs, launched its new lab at the Communitech Hub, joining a large roster of corporations looking to tap into Waterloo Region’s humming startup ecosystem.

Meanwhile, GM Canada, which opened an outpost of its own at the Hub a year ago, threw a party to launch Maven, its new vehicle-sharing service.

Craig Haney, Communitech’s Director of Corporate Innovation, spoke with the Business News Network (BNN) about how Canadian companies can innovate in a new era of trade as Donald Trump’s U.S. presidency takes hold.

Acquisitions

On the acquisitions front, ETAS Embedded Systems Canada, a division of German engineering giant Bosch, made an agreement to buy TrustPoint Innovation, whose technology secures machine-to-machine communications on the Internet of Things. We sat down with TrustPoint CEO Sherry Shannon-Vanstone to talk about what the acquisition will mean for her team.

Waterloo-based RDM Corp., whose technology is used to scan cheques and process payments, has entered an agreement to be acquired by Deluxe Corp.of Shoreview, Minn., for US$70 million. Randy Fowlie, RDM’s CEO (and Communitech’s first board chair in 1997), said RDM’s operations, which employ about 100 people, will likely remain in Waterloo post-acquisition.

And the team at FameBit, a Waterloo Region startup that helps connect content creators and brands, packed up to move to California following its recent acquisition by Google – though the entire team hopes to move back to Waterloo Region someday, its vice-president of engineering told the Waterloo Region Record.

Startups

A pair of companies focused on environmental sustainability shared $100,000 in prize money after winning Communitech’s Fierce Founders pitch competition for female-led startups.

ISARA, a security-focused startup incubated inside BlackBerry co-founder Mike Lazaridis’ Quantum Valley Investments, has partnered with BlackBerry to integrate quantum-resistant algorithms into its products. Led by seasoned ex-BlackBerry security executives, ISARA’s algorithms are designed to protect against future cyber-attacks using quantum computers.

Helping to smooth the transition for refugees to Canada is the focus of a new startup launched by a group of University of Waterloo students.

The co-founders of Bridgit, a Waterloo Region construction management software company, spoke with BetaKit about the importance of resilience for young tech entrepreneurs as they learn from failure.

And Steve McCartney, Communitech’s VP of Client Services, Emerging and High Growth Companies, sat down with local marketing leader Alan Quarry to talk about the successes and missteps tech companies experience as they start and grow.

In other news

• Citing Kitchener’s vibrant downtown culture and strong tech talent, Index Exchange opened an engineering office in the heart of Waterloo Region. The company, with operations in Toronto, New York and London, uses an auction system to allow publishers to sell ads to advertisers.
• Raine Maida, frontman of post-grunge alt-rock band Our Lady Peace, visited Communitech and delivered a talk about his new startup, RecordMob.
• Kitchener City Council approved a new civic innovation lab planned for the Communitech Hub.
• Vidyard CEO Michael Litt penned a piece on the importance of supporting homegrown entrepreneurs by buying their innovations, a sentiment echoed by Miovision CEO Kurtis McBride and Magnet Forensics CEO Adam Belsher on CBC Radio’s The House.