Good things come in threes – in this case, two regions and one country sharing talent, working together to create opportunities, and foster a world-class technology ecosystem.
During his keynote talk at the Series 401 event at MaRS Discovery District in Toronto last Wednesday, John Ruffolo emphasized the importance of recognizing the entrepreneurial spirit and technical talent that exist between Waterloo Region and Toronto, where an effort is under way to build a supercluster of national significance.
“If you want to drive a national strategy, you have to get the Toronto-K-W cluster right,” Ruffolo, CEO of OMERS Ventures, said.
With 97 investors and 15 tech startup teams from all over Canada in attendance, including Communitech HYPERDRIVE cohort 4 graduate Structur3d Printing and almuni Plum, Series 401 succeeded in bringing together the best of both worlds, introducing investors with capital to startups seeking funds to propel their businesses.
The high-pedigree startups pitched technology ranging from augmented mobile USB devices to smarter human resources solutions.
Rob Henderson is the President and CEO of Yconic, a startup aiming to make the lives of students pursuing higher education easier and less stressful though a social platform that matches scholarships with students.
Henderson has positioned his company to benefit from both ecosystems, with Yconic’s headquarters in Toronto and a product engineering office in Waterloo.
“It’s been one of the most strategic and best decisions we’ve made, to capitalize on both markets, because we truly get the best,” he said. “In terms of a lot of revenues driven from Toronto, we can keep our sales and marketing teams there, and then the best talent in the world in terms of product engineering is in Waterloo, so we really get the best of both worlds.”
Investors are also being drawn to the idea of a mutually beneficial supercluster.
Janet Bannister and Omar Dhalla are partners with Montreal’s Real Ventures, a seed venture fund that recently raised a first round of $75 million, with potential to grow to $200 million.
The pair represent the fund in Ontario searching for investment-ready startups, and spend the majority of their time between technology centres in Toronto like MaRS, Ryerson Digital Media Zone and One Eleven, and have recently taken desk space in Kitchener at the Communitech Hub. They believe the more touchpoints they can get between the two markets, the better.
“From a corporate development perspective, you have better access to a different set of opportunities in Toronto outside of Waterloo. The Region coming out here can get exposed to that,” Dhalla said. “For companies in both regions, it’s helpful to cross-pollinate.”
Like Ruffolo, he thinks clustering Toronto and Waterloo Region is the right place to launch a national movement.
“It has to start somewhere, and why shouldn’t it start where the majority of the deal flow is up? If we do that collectively it’s easy to see why Vancouver, Calgary and Ottawa would start spending more time here,” Dhalla said. “I think that’s already starting to happen.”
From a startup’s standpoint, Bannister thinks coming to Toronto for events like Series 401 also provide an opportunity to meet potential employees.
“They have better access to hiring different people. I know some companies in Waterloo are hiring in Toronto for people to work mobilely or move to Waterloo,” she said. “Both have separate strengths; they’ll be stronger together.”
Sean Brownlee is a partner at Rho Canada Ventures in Montreal, investing in seed and Series A technologies across a variety of verticals coast to coast. He says the venture firm has noticed what’s happening between the two regions.
“What we’re seeing, which is incredibly encouraging, is a lot of deep technology companies coming out of the ecosystem,” Brownlee said. “We’re seeing the young entrepreneurs taking what they want in university, building the teams they want, and bringing out great, differential technology.”
Brownlee chalks it up to the regions coming together, driving that cluster success.
“The ecosystem is real, it’s working, and we have some data points to show we can grow and exit great companies,” he said. ”At the end of the day, that’s what we want to see. As a venture capitalist, I don’t think I could ask for more.”
