The SaaS industry in Canada has “arrived,” according to L-SPARK managing director Leo Lax.
In an interview with BetaKit at SAAS NORTH, Leo Lax noted the sector’s skyrocketing growth, as companies capitalized on the importance of digital transformation during the pandemic.
Six years ago, Lax says, people working in the SaaS industry were still in the process of helping people understand what software-as-a-service products are; that shifted at the onset of the pandemic.
“We all moved online, and what happened then is suddenly the SaaS world was no longer an opportunity and a possibility, it was a [necessary] requirement,” he said, adding that the rise of digital transformation has allowed SaaS companies to become more significant entities in the tech ecosystem.
“Those companies now grew to such a level that they were able to absorb the kind of capital that was being presented to them,” Lax noted. “You saw a new set of companies becoming global, becoming larger, becoming more capable of absorbing that kind of capital and using it to grow.”
Lax also attributes the industry’s growth to a shift in people’s expectations in terms of quality of life. He cites Amazon’s prime delivery, a feature that didn’t exist until 2007, but was implemented to meet market needs.
“That also changed the way that we behave, now put all of those things together, you create almost a tsunami, you create a wave,” he said. “I would say Canada has been able to absorb that wave and transform our nascent companies into global companies.”
RELATED: Canadian SaaS funding in 2021 rebounds from 2020 low, fuelled by influx of US investors
According to L-SPARK’s latest State of SaaS report, Canadian SaaS company funding in 2021 has reached a total of $9.16 billion CAD to date, nearly doubling the country’s pre-pandemic total in 2019, when financing for the industry hit $5.13 billion.
L-SPARK, which co-founded SAAS NORTH, is an Ottawa-based SaaS-focused startup accelerator. The hub’s most recent State of SaaS report covers activity that took place since January 1, drawing its data from Pitchbook and media reports.
After having to hold a virtual conference last year owing to public gathering restrictions, SAAS NORTH returned to an in-person conference in 2021, where Lax elaborated on L-SPARK’s report at the BetaKit Keynote Stage.
He says the conference this year showed unprecedented energy from attendees and organizers, exceeding all of his expectations.
“This is part of what our community needs, and if the world is going to allow us to do it from a health point of view, nothing will stop us, we’ll get it going,” Lax said. “People are engaging purposefully because it actually takes energy and they want to do it.”