OneEleven, the once shuttered Toronto incubator, is set to return in the next few weeks under Ontario Centres of Excellence (OCE) control, BetaKit has learned.
The OCE, notably a OneEleven founding partner, has an agreement to acquire the OneEleven brand from Oxford Properties, as well as its office space at 325 Front Street (a building owned by Oxford Properties), sources familiar with the situation told BetaKit under condition of anonymity. According to sources, the OCE expects to re-launch OneEleven within the next few weeks.
“People figured out OneEleven has a unique niche in the innovation ecosystem.”
According to The Logic’s reporting, the OCE is paying Oxford around $3 million to acquire OneEleven. However, in June, an Oxford spokesperson told BetaKit, “OneEleven is not being sold” and Oxford is not set to receive any proceeds from the deal.
Both Oxford and OCE have confirmed the transaction, stating that the transfer of OneEleven’s IP and brand came at “zero cost.” BetaKit has followed up with both organizations to confirm if other considerations contributed to the Logic’s reported $3 million deal price. Notably, in its statement to BetaKit, the OCE said it has entered into a lease agreement with Oxford Properties for 325 Front Street West.
“OCE looks forward to working closely with all of our partners to support the revitalization of an important element of the local tech community and we will share further news in the coming weeks,” the organization added.
The move to save OneEleven, after its board of directors shuttered the organization in April citing COVID-19 concerns, was pushed by former tenants asking the founding organization to save the incubator, sources say.
In June, BetaKit was first to report that multiple organizations had submitted proposals to acquire OneEleven, following the shutdown. At the time, multiple sources with knowledge of the process told BetaKit Oxford Properties had decided to move forward with the proposal from the OCE.
While OCE is leading the re-birth of OneEleven, a consortium of supporters from the Toronto innovation sector have come together to bring the tech hub back to life. The re-launch will receive support from Ryerson, MaRS, and “national and Ontario angel investors,” sources told BetaKit.
“People figured out OneEleven has a unique niche in the innovation ecosystem,” one source told BetaKit.
“People tended to be supportive as opposed to being competitive,” the source added, pointing to both MaRS and Ryerson (which runs the DMZ) that could be viewed as OneEleven competitors, but saw the value OneEleven brought to the local community.
MaRS confirmed that while it is not participating in the acquisition agreement, it will support OCE as an ecosystem partner providing OneEleven with access to MaRS programming.
“We believe in the importance of OneEleven as part of a thriving tech ecosystem,” a spokesperson told BetaKit.
Ryerson’s support for OneEleven dates back to 2013, when it founded the incubator as a non-profit alongside OCE and OMERS Ventures. OneEleven was later incorporated as a for-profit entity in July 2018 by Oxford and OMERS. Since its launch OneEleven has housed and supported more than 100 local startups, naming amongst its alumni Wealthsimple, Borrowell, Tulip Retail, and Koho, among others.
The OCE is also in discussion to receive financial support from the federal government for OneEleven.
The OCE is also in discussion, according to sources, to receive financial support from the federal government for OneEleven. Though, sources told BetaKit, a deal has yet to be reached. The OCE is notably funded by the Government of Ontario, though federal support for incubators and accelerators tends to come through the Regional Development Agency (RDA) program.
The re-launch of OneEleven comes almost four months after it was first announced that the Toronto incubator was set to permanently cease operations due to economic impacts caused by the current COVID-19 pandemic.
At the time, OneEleven occupied a 125,000 square foot space that housed over 50 startups. The decision to shutter the company was one made by OneEleven’s board of directors, notably comprised of OMERS and Oxford representatives, including board chair and former OneEleven CEO, Dean Hopkins.
When it was first reported that OCE had won to bid for OneEleven, questions remained about the value of the incubator. An Oxford spokesperson told BetaKit at the time that since OneEleven had closed in April, one-third of the desks at the incubator have been vacated.
Sources recently told BetaKit that while there were companies that decided to vacate OneEleven for a variety of reasons, some related to COVID-19 restructuring, a “large number” of former tenants have expressed desire to stay in the space. The source added that other businesses have also expressed interest in joining. The OCE, notably also a tenant at 325 Front Street, is set to take over just one of the two floors in the building that OneEleven previously occupied.
The OCE is set to fund its OneEleven venture through tenants as well as sponsorship from existing and new partners.
“There’s pretty strong support from the tech industry here in the city and even in the present economic difficulties there are people who want to be supportive or want to be involved,” one source told BetaKit.
UPDATE 18/08/2020: This story has been updated with additional comment from OCE.
With notes from Douglas Soltys