Impact Centre updates Narwhal List to reflect 2019’s big rounds, exits


Following Canada seeing a number of significant raises in addition to large exits in the first half of 2019, the University of Toronto’s Impact Centre has updated its 2019 Narwhal List, a report that highlights Canada’s fastest scaling private tech companies.

“There are a lot of places in Canada where it’s possible to incubate successful companies.”

The Narwhal List ranks financially attractive firms by financial velocity. This metric is derived by the amount of funding a firm has raised, divided by the number of years the company has existed. The report also measures the rate at which a company raises and consumes capital to support its growth.

“We’re having more and more companies raising larger and larger amounts as they grow. That’s critical to our success,” Charles Plant, a senior fellow of the Impact Centre, told BetaKit. “It’s important to call attention to these companies. Accentuating those that are raising substantial amounts of money is a good way to continually bring forth the topic in Canada.”

It should be noted that the latest updates are dated up until July 1, meaning some of the large raises recorded since that date may not be included. These larger raises include’s $19 million raise (June 27), Sensibill $41 million, Vendasta $40 million, Landr $26 million, and Flybits $45 million. Plant noted that Montreal-founded Sonder’s recent $210 million USD raise is also not included since he does not consider it a Canadian company (Sonder is headquartered and has plans to incorporate in the US).

Big exits make room for new entrants

Four companies have graduated from the Narwhal list since January. Both Milestone Pharmaceuticals and Lightspeed went public and H&R Block acquired Wave for $537 million. Wealthsimple also exited the list as multinational holding company Power Financial became a majority shareholder. Plant said he hopes Wealthsimple raises another round from an external party and becomes independent again.

The big exits left room for some new Narwhals. In total, 11 companies either returned to the list or appeared for the first time. The Impact Centre said the 11 companies raised an average of $36 million USD each. Achieving a high financial velocity means a company is raising more and more money over time, so ideally, Plant said, although it is possible for a firm to have a high velocity score in its first year if it raises a significant amount of funding, it must continue to raise higher amounts of money to maintain that standing.

The 10 startups with the highest financial velocity include:

  • Element AI
  • Hootsuite
  • Ritual
  • Kik
  • North
  • Blockstream
  • Integrate.AI
  • Assent Compliance
  • Hopper
  • Breather
    The 11 new or returning startups are:

  • AlayaCare ($51 million)
  • ApplyBoard ($55 million)
  • Dialogue ($40 million)
  • Fiix Software ($53 million)
  • Koho ($42 million)
  • Mindbridge AI ($14 million)
  • Xanadu ($32 million)
  • Sonrai Security ($18 million)
  • TrackTik ($45 million)
  • Vena Solutions (115 million)
  • Lungpacer ($55 million)

    Despite third place, Ritual is the real winner

    Plant said that although financial velocity is a key indicator of a startup’s progression to unicorn status, it certainly isn’t the only factor at play. Growth, he said, and employee growth in particular, are also critical factors to determine the success of a company. For example, some of the updated Narwhal List’s top companies, like Element AI, Hootsuite, and North, show impressive financial velocities, but stagnant employee growth rates.

    “I’m still a little dismayed by some of the older companies that aren’t going anywhere.”

    North, for example, which received $24 million from the federal government in December, also laid off 150 employees in February, close to a third of its total headcount. In May, it was discovered Hootsuite had let go of approximately 10 percent of its staff, in what it said was an effort to “to drive greater alignment with our growing company’s strategic priorities.”

    “I’m still a little dismayed by some of the older companies that aren’t going anywhere like Hootsuite and D2L, that have been around for a long time,” Plant said. “I’m struggling to figure out where those companies are going to go.”

    Ritual however, which places third in the country for its financial velocity, has been growing aggressively internationally. This year, it expanded into the UK and Australia, with further plans to move into Europe. Ritual is now running in London and Sydney. Some of the new North American cities launching in 2019 include Calgary, Edmonton, Montreal, Ottawa, and Vancouver as well as 18 cities in the US including Austin, Detroit, Miami, and New Orleans.

    Plant said in combining both company growth and financial velocity, both of which contribute to a startup’s chances of becoming a unicorn, it’s Ritual that comes out on top.

    “If I apply [the employee growth] lens against the Narwhal List, I’d say Ritual has a better chance than Element AI because of their growth rate, which will require more capital,” he said. “This is part of the formula.”

    Alberta’s notable absence

    This year’s Startup Genome report, released in April, found Canada is home to a number of budding tech hubs, particularly in the AI, life sciences, and cleantech verticals. Startup Genome identified Calgary and Edmonton, among others, as “ecosystems to watch.” But despite perhaps the rising reputations of these smaller cities, the Narwhal List did not include any companies from either Calgary or Edmonton.

    “That’s really showing that there, you know, the tech community, [Calgary and Edmonton] are really at an earlier stage of development,” Plant noted.

    RELATED: Five Canadian cities with highest volume of investment dollars and deals in 2018

    Although no Alberta-based companies were identified, the Impact Centre did name several new city entrants, including Fredericton, whose Sonrai Security raised $18.5 million USD funding in January. Winnipeg also stole a spot on the list with Farmer’s Edge Laboratories, which has raised $103 million in funding to date. While not a new entrant, it should be noted that Victoria also made an appearance with Blockstream having raised about $101 million so far, coming in sixth in terms of financial velocity.

    “Just as in the US where it’s possible to build a little corner, we’re seeing that there are a lot of places in Canada where it’s possible to incubate successful companies,” Plant said.

    See the the January list here.

    Isabelle Kirkwood

    Isabelle Kirkwood

    Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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