It’s spooky season at BetaKit and the whole team got into the spirit, but only newsletter subscribers get to see the grim results.
I did not don a costume this year, but I’ll do my part by discussing zombie startups: venture-backed businesses making enough revenue to sustain operations, but not enough to justify past valuations or future exits. Zombie startups are just alive enough not to call it quits but not so alive as to be able to grow or change. They shamble along like the walking dead.
I can think of a few Canadian startups that might qualify as zombies, but it would be rude to name them here. Anyway, I’m sure some company popped into your head as you read this. Tell you what: you email me the company you were thinking about and I’ll tell you if you guessed right.
Maybe it’s the season, but which factors in Canadian tech keep so many zombie startups half alive has been a hot topic recently.
At our recent Town Hall in Vancouver, Clio CEO Jack Newton pointed to SR&ED credits as one culprit, calling it an example of government support that can be “anti-productive.” Two weeks prior, Tom Birch, CDPQ’s global managing director of venture capital and technology, said “The ecosystem of living deads doesn’t last too long in the Valley, whereas in Canada, they last too long.” Birch attributed Canada’s endless Night of the Living Dead to cultural differences compared to the US market, and a lack of large-scale enterprises north of the border willing to gobble up the wounded.
Cultural differences are hard to quantify. It’s true that entrepreneurs in the States shut down faster to start again faster, but having access to one of the largest capital pools in the world makes it much easier to respawn. Maybe it’s about how that capital is spent: below, you’ll find Jane App’s Alison Taylor almost blasé about all the government support available to her BC-based company—so much so that she only gets riled when she remembers Ontario companies get more.
Still, I’m not sure how comfortable I am with a conversation focused on when a company should die, particularly given staying alive is an important requirement of startup success. Maybe I’m just too squeamish.
This month, I’ll be talking to someone who made the call—or had it made for them—at SAAS NORTH: Marie Chevrier Schwartz, former CEO of Sampler, which shuttered after filing for bankruptcy earlier this year. You can still get tickets at 25 percent off using the code BETAKITSN24 because I’m all out of fun-sized Milky Ways to give you.
Douglas Soltys
Editor-in-chief
It’s never been more important to protect your Canadian domain.
Rapid company growth can lead to company names taking on unexpected value, and the Canadian Internet Registration Authority warns there’s a thriving resale market for domain names.
As search engines continue to develop their algorithms, .CA domains are also increasingly helpful for SEO and Canadians are four times more likely to shop on a website with a .CA domain.
Ready to register your own .CA domain? Visit GoDaddy to search for your .CA domain and get a special offer.
TOP STORIES OF THE WEEK
Vantage Points at BetaKit Town Hall: Vancouver
At BetaKit Town Hall: Vancouver, BC tech leaders shared their thoughts on the local ecosystem, building in Canada, and the next generation of entrepreneurs.
East Side Games co-founder Josh Nilson called BC Canada’s “forgotten stepchild,” which he believes gives local founders a unique brand of grit.
AbCellera VP of business development Anne Stevens shared how Canada almost lost the life sciences company to the US and what kept them here.
Jane App co-founder Alison Taylor thinks tech is actually kind of weird, and delivered a reality check to founders on the amount of government support available to them.
Atelier co-founder Scott Langille explained the three things young entrepreneurs need to succeed in tech.
While US moves forward on open banking, Canadian FinTechs met with more “zombie” discourse
On Oct. 22, the Consumer Financial Protection Bureau finalized rules for an open banking system in the United States. While a welcome announcement for American FinTechs, for some Canadian companies, it was a rude reminder the federal government continues to drag its feet on implementing its promised framework.
FinTech startups, particularly those that serve small and medium-sized businesses, are renewing calls for open banking legislation to finally be implemented in Canada. And discourse from the establishment banking community has only added fuel to the fire.
Chris Albinson departs as Communitech CEO but keeps reins of True North Fund
Communitech has announced the departure of CEO Chris Albinson after three-and-a-half years at the helm of the Kitchener-Waterloo innovation hub. Despite the split, Albinson will continue his efforts to build a True North Fund on a full-time basis.
Communitech CFO Jennifer Gruber has been tapped to serve as interim CEO, and the organization’s board plans to begin the search for a new permanent CEO in the coming weeks.
Speaking to Albinson’s departure from Communitech under condition of anonymity, a source familiar with leadership’s thinking said, “I think it’s an opportunity to reset on the mission.”
George Damian named new executive director of the Venture Capital Association of Alberta
Alberta’s venture capital advocacy group has a new leader. The Venture Capital Association of Alberta (VCAA) has announced that George Damian has stepped into the role of executive director.
Over the last two years, the VCAA has more than doubled its membership to 67, mostly from venture firms outside the province.
How to tame a large language model
As the co-founder and CTO of Mantle, a next-generation equity management platform built for modern founders, operators, and law firms, Dwayne Forde talks constantly with company leaders about the potential applications of AI.
Forde recently released a series of blog posts on the Mantle site designed to offer step-by-step training for tech teams using Large Learning Models.
An engineer and trusted industry figure with more than 20 years of experience with companies including VMware and Xtreme Labs, Forde has been interacting with LLMs for years. He hopes his insights can serve as a handy reference point for others.
Momentum Ventures’ CEO Henri Chelhot on the evolving needs of global travellers
It’s easy to forget that a global pandemic grounded travel worldwide not too long ago, hitting few industries as hard as the travel industry.
Rather than buckle under pressure, Montreal-based Momentum Ventures, the parent company of FlightHub, justfly.com, Flygreen, and CruiseHub, leveraged AI while also adopting a human-centred approach to reshape their customer service, sustainability, and innovation efforts.
BetaKit spoke with Momentum Ventures’ CEO Henri Chelhot about implementing generative AI, sustainable travel, and what’s next for the company as it continues to redefine modern travel.
Mastercard helps fight the “never ending arms race” of cybersecurity
It’s never felt harder to keep your money and your identity safe. Every day, it seems as though there are new ways that you can get hacked, compromised, or scammed.
While October was Cybersecurity Awareness month, 2024 might be the year that digital fraud took on a dangerous new year-round urgency, in Canada and around the world.
BetaKit’s CEO Siri Agrell spoke to Mastercard’s Amisha Parikh, Vice President of Security Solutions, North America, about being on the front line of global cybersecurity and how business owners can help protect themselves.
Funding, Acquisitions, and Layoffs
SF – Canadian-founded Revyl closed $1.5M CAD pre-seed round
BC – CICE opens up $3M CAD to women-led cleantech ventures
VAN – Procurify secures $27.8M CAD growth capital
CGY – Balance becomes qualified digital asset custodian
TOR – Mave announces $2M CAD pre-seed round
QC – Investissement Québec announces new $4.5B CAD innovation program
The BetaKit Podcast
Alexis Ohanian and Matt Damon can help Xatoms clean water around the world
“The 776 fellowship has connected us to so many opportunities that we would never be connected to [otherwise].”
Xatoms co-founder Diana Virgovicova explains how she uses quantum chemistry, grants from tech leaders like Alexis Ohanian, and celebrity relationships to help solve a global clean water problem. Recorded live at Elevate Festival.
Take The BetaKit Quiz
Think you’re on top of Canadian tech and innovation news? Time to prove it. Introducing The BetaKit Quiz, a new weekly challenge dropping every Friday. This week: Zombie ideas, stolen money, and a “shit job.” Test your knowledge of #CDNtech news.
Take The BetaKit Quiz for Nov. 1, 2024.
Feature image courtesy AMC via Walking Dead Wiki.