About a week ago we published a story on the incoming CEO of Waterloo’s Accelerator Centre, who confidently said Waterloo is the “best place in the world” for startups.
Innovacorp, Nova Scotia’s crown corporation venture capital fund that works heavily with startups in the Maritimes region, sent a tongue-in-cheek reply. The tweet reminded everyone that Halifax’s startup scene exists too.
— innovacorp (@innovacorp) July 4, 2014
Needless to say I quickly hopped on the phone with Innovacorp’s braintrust, CEO Stephen Duff and his team that includes Greg Phipps, Dawn Umlah and Dawn House.
Innovacorp gets $7.5 million every year from the government of Nova Scotia and it chips in another $2.5 million itself. It invests $5 million every year and attracts about $8 million from outside co-investment.
While the crew at Innovacorp certainly loves what’s going on in Waterloo, they want people to realize that there’s something going on in the Maritimes. “There seems to be a unique mix of characteristics and attributes that go into a very vibrant startup community and we think we’ve got them all here,” said Duff. “But they’re in development and we’re finding the best way to connect them together and make them dynamic and sustainable.”
They could be right too. There’s already been a few significant exits including Radian6 (acquired by SalesForce for $326 million) and GoInstant (acquired by SalesForce for $70 million), and the Launch36 program (which has produced graduates that Innovacorp helped invest in) has produced its fair share of startups. Meanwhile the University of New Brunswick and Dalhousie University both continue to churn out strong research within engineering, computing and big data.
“I’ve been here for a year and my exposure has been to a very dynamic startup community that in my estimation has a lot of the essential ingredients that I see at play in Waterloo,” said Duff.
And while Vancouver has its GROW Conference, Montreal has the International Startup Festival and Toronto has CIX, the folks at Innovacorp were quick to point out that the Atlantic Venture Forum that concluded just a few weeks ago saw 350 people show up in its second year. That’s similar to Startup Fest’s numbers during its first few years.
I challenged them on the fact that the Maritime provinces as a whole just don’t have a lot of people (about 1,813,102 in 2011) compared to the roughly 3.3 million living in the Toronto-Waterloo corridor (2,791,140 in Toronto in 2012 and 507,096 in Kitchener-Waterloo in 2011). Even Montreal has about 1,649,519 (as of 2011). More people generally mean more startups, and more startups generally means a higher chance of successful outcomes. In fact, the Maritimes have more people leaving the area every year than coming in, so surely there’s a fundamental challenge.
Umlah pointed out that people seem to love settling down in Halifax, particularly if one wants to start a family. As well, since the region is relatively small, top-notch universities and research labs, especially in Halifax, are all within a short commute.
Phipps added that the population issue is not as big an issue as one would think. “It only takes a few smart people to make an innovation ecosystem successful, and I think right now our biggest shortcoming compared to the Toronto-Waterloo corridor relates to the access to capital, and one small component to that issue is a prevalence of variety to venture capital funds, both governmental and private.”
Duff agreed, saying “you don’t need the numbers if you get the right people.”
Innovacorp is both a selected organization for Canada’s Startup Visa Program as well as the Canadian Digital Media Network’s (CDMN) Soft-Landing program. Said Phipps, “I think you’ll see a greater diversity of entrepreneurs in the region in five years where we’ll be bringing the smartest people around the world into Halifax.”
Duff said he was speaking with Communitech’s CEO during a recent trip to Waterloo, who commented that Waterloo is, more or less, in the middle of nowhere. Halifax, meanwhile, is on the ocean, and people want to raise families there which has to be good for the local startup community’s chances at stronger growth.
“I think the ability to attract people to Halifax based on a place where people want to live, bring their families and raise their children, that is a big attractor for us but we’re not out to copy anyone,” said Duff. “We see a lot of the essential ingredients in play here, we’ve got some great momentum here now and there’s only one place to go.”