Less than a decade ago, Alberta’s global reputation had little to do with its tech ecosystem. But according to Joe Timlin, Managing Director at CIBC Innovation Banking, the province is quickly emerging as a key destination for investment and impact.
“We’ve just seen the ecosystem mature to the point where a number of name brand venture capital and private equity firms have done their first investments in Alberta, and now I think they’re eager to do more after seeing the opportunity set there,” Timlin told BetaKit.
Once known primarily for its oil and gas industry, Alberta now boasts an impressive network of more than 3,000 tech companies. This growth, coupled with an influx of global capital and a burgeoning reputation in artificial intelligence, is increasingly putting Alberta on the tech map.
To Timlin, it shows signs of a tech ecosystem that, while still young, has what it takes to hold its own in the global tech arena.
Deal-rich territory
When measuring Alberta’s ecosystem in terms of deal-making, the province has certainly been heating up. According to the Canadian Venture Capital & Private Equity Association, Alberta companies raised a total of $707 million across 86 deals in 2023.
That’s actually a slight downturn from the previous year, but Timlin notes that Alberta has been posting consistently strong results compared to other regions in Canada. Strong deal activity appears to have carried over to 2024—Timlin said that his most recent four deals across Western Canada have been in Edmonton.
“These are Tier 1 technology investors coming north of the border to do significant financings.”
Joe Timlin
“Alberta raised almost a billion of the $7 billion in venture capital and private equity that was deployed last year across Canada, so certainly on a per capita basis, they punch above their weight,” he added.
CIBC Innovation Banking is leading the way in providing non-dilutive capital in the province, providing startups with both support for and alternatives to equity funding.
Alberta also has boots on the ground from Canada’s top venture firms, including Inovia Capital, BDC, Pender, Yaletown Partners, and Panache Ventures
But perhaps the most striking development is the surge of global capital into Alberta’s companies. Firms like Benevity, Jobber, and Neo Financial have drawn investment from prominent players like General Atlantic, JMI, Sageview, and Peter Thiel-backed Valar Ventures.
“These are Tier 1 technology investors coming north of the border to do significant financings,” Timlin said.
“The success of Jobber and Benevity, in particular, and the scale that they’re at, just shows that there’s nothing in Alberta that can’t be done,” he added.
AI positions Alberta as a global player
AI continues to dominate tech conversations today, and Alberta has been quietly honing its expertise in this area for years. The University of Alberta is home to one of Canada’s oldest and most significant computing science departments, which has made contributions to both the theoretical foundations and practical applications of computing.
The Alberta Machine Intelligence Institute (Amii) is another standout in Alberta’s AI sector. As one of Canada’s three Centres of Excellence within the Pan-Canadian AI Strategy, Amii not only drives world-class AI research but also plays a crucial role in translating scientific breakthroughs into practical industry applications.
The provincial government has also been focused on making Alberta an AI powerhouse, allocating $30 million to AI as part of its innovation strategy in 2022. Alberta Innovates, the province’s innovation crown corporation, also injected $30 million into Amii last year.
Startups like GeologicAI, PayShepherd, RetinaLogik and Mercator AI, all of which leverage artificial intelligence, have been actively closing deals in recent years.
“There’s a real focus in Alberta on bringing AI and machine vision machine learning in particular to market,” Timlin added.
Young but ripe for success
Alberta has long been home to a number of grassroots ecosystem support organizations. Edmonton is the birthplace of Startup TNT, which is now a pan-Western Canadian angel investment conference. Calgary’s Innovation Week and Launch Party are annual celebrations that showcase the breadth and depth of Calgary’s tech sector.
“All the pieces are in place for Alberta to get there. I don’t think there’s anything holding them back.”
Other Alberta events, like the Banff Venture Forum and the Venture Capital Association of Alberta’s Ski Conference, and the upcoming Inventures conference, all exist to create cohesion and spark collisions among the province’s startups and investors.
“A lot of innovation, especially team building, occurs at this quasi-social level,” Timlin noted. “Behind these events, VCs and private equity players are showing up a day or two early and staying a day or two late and they’re looking around in Alberta at investable deals.”
Alberta’s tech ecosystem, though maturing, is still considered by Timlin to be an emerging market. One key challenge identified is the region’s relative scarcity of senior-level talent compared to more established tech hubs like Vancouver or Toronto.
“To move a company from $10 million in ARR to $100 million in ARR to several hundred million in ARR requires a specific set of talent, and it’s super difficult to achieve that if every single person in the company is in the biggest job they’ve ever had in their lives,” he added.
But the problem may be addressing itself, given the province’s recent success in attracting talent. An “Alberta is Calling” campaign prompted the migration of more than 17,000 people from other parts of the country between July and September of 2023. It’s one of the few provinces drawing new residents from inside Canada.
While Alberta witnesses a rise in anchor companies and new talent, Timlin says the province has recently joined the list of Canadian technology regions that can assert it has home-grown unicorn companies and the ancillary services talent such as legal and accounting to support continued growth and success.
“Although the big private equity and IPO exits aren’t there just yet in this market, all the pieces are in place for Alberta to get there,” Timlin added. “I don’t think there’s anything holding them back.”
Feature image courtesy Kelly Hofer via Unsplash / BetaKit illustration.
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