Six tech companies based in Toronto are receiving a cumulative $14.6 million in loans from the federal government.
The loans are being made out through FedDev Ontario, the regional development agency for Southern Ontario. An announcement from FedDev Ontario said the agency is looking to strengthen Toronto as a key technology sector through these loans, as well as create the right conditions for growth in the post-pandemic economy.
Over the last few years, Toronto’s tech ecosystem has gained international repute, and in 2019 and 2020 was ranked by the CBRE as one of the top technology markets in North America, and the fastest-growing.
“What we’ve heard loud and clear is that the venture capital market is tight right now.”
However, the region experienced significantly reduced venture activity during the COVID-19 pandemic. According to Hockeystick’s ecosystem reports, which track technology deals by size and volume across regions, Toronto’s total funding raised slumped to $213 million in the second quarter of 2020, vastly underperforming compared to past quarters.
Despite this, more recent data from the Canadian Venture Capital and Private Equity Association found over the course of the entire year, Toronto remained the most popular site of VC activity in 2020 with $1.2 billion across 164 deals.
“What we’ve heard loud and clear is that the venture capital market is tight right now, access is difficult,” Minister of Economic Development Mélanie Joly told BetaKit in an interview.
“While the market is opening and there are more opportunities around the world for these businesses, venture capital [firms] and banks sometimes are very risk-averse,” she added. “That’s [where we come] into play because we’re the ones that help mitigate a part of the risk, being the first to fund and to lend this money to these companies.”
EnergyX Solutions is one of the six companies promised funding. The company is receiving a $500,000 loan to expand its customer base in North America and strengthen existing customer relationships by increasing the automation and predictive analysis capabilities of its platform. EnergyX is a marketing automation company for energy providers to engage their customers in energy efficiency programs.
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Sensibill, which offers financial tools and gives financial institutions personalized insights to help their customers build healthier financial habits, is receiving $2 million. This loan will support a three-year global expansion into the European, Latin American and Asia and Pacific markets, which will allow the company to attract new business opportunities.
Last year, Sensibill raised $5 million in debt financing from CIBC Innovation Banking after reducing its headcount. The startup attributed the layoffs to the pandemic.
Humi, which offers an HR, payroll, and benefits solution, is receiving a $1.9 million loan which will help the company launch new platform features, expand its Canadian customer base, and allow for diversification into new global markets.
Kepler Communications is receiving $3.8 million to set up an advanced, nanosatellite manufacturing facility, making it the first Canadian company to mass-produce nanosatellites.
Nulogy is receiving $3.4 million to develop its supply chain management software platform, build capacity to support its growth, and focus on export development activities.
Opus One Solutions is getting $3 million to accelerate the commercialization of its advanced analytics software platform, GridOS, an AI-powered electric grid management and optimization platform for utility companies.
