According to a new study from the Alberta Enterprise Corporation, Alberta’s tech sector is maturing at a rapid rate, even though the net growth in the number of tech startups appears to be slowing down.
The 2018 Deal Flow Study measured the health, growth, and composition of the Alberta technology and innovation sector. The study found tech startups comprise 35 percent of the total number of Alberta-owned and operated technology companies. Since 2016, 432 new tech startups have been established in Alberta, bringing the total number of technology companies with headquarters in Alberta to 1,238. The Deal Flow Study’s findings surveyed all 1,238 of these tech companies.
Tech startups comprise 35 percent of the total number of Alberta-owned and operated technology companies.
In November 2018, the Canadian government announced nearly $21 million to help Alberta tech startups scale. Investments from the federal government like these could be paying off, as findings from the Deal Flow Study suggested Alberta offers a significant early-stage opportunity for tech investors, with 54 percent of companies surveyed at the pre-Series A stage.
Seventy percent of Alberta tech companies surveyed are generating annual revenue, which represents a 32 percent increase since 2016. Over 80 percent of capital funding raised by Alberta tech firms is from sources in Calgary or Edmonton, 27 percent is raised from other parts of Canada, and 24 percent is from the US.
“Our growing tech sector is creating a more sustainable, diversified technology industry in Alberta – one where home-grown innovation is encouraged, and technology entrepreneurs have greater access to capital,” said Kristina Williams, President and CEO of Alberta Enterprise. “As a result, we’re seeing more and more Alberta tech firms ready to take on the world.”
Related: 11 Prairie startups to watch in 2019
More companies are in the later stages of product development than in 2016, at 63 percent, up 12 points from 51 percent. In terms of total revenue, the proportion of companies that have collected revenues between $1 million to under $5 million has increased by 15 percent, up 2 points from 2016. However, there are a smaller number of companies in the pre-revenue phase, at 24 percent, down 16 points from 40 percent, and a smaller proportion of companies in the earlier stages of product development, down 12 points to 32 percent from 44 percent.
The study also found that software continues to be the leading tech sector in Alberta, comprising 40 percent of the tech deal flow, followed by energy and cleantech at 21 percent, and life sciences at 13 percent. It was also revealed that female participation in the province’s tech sector is more than double the national average, with 30 percent of tech companies in Alberta reportedly having a female founder.
Find the full 2018 Deal Flow Study here.
