Sidewalk Labs master plan includes $20 million CAD in venture funding, space for startups

River District

As part of its overarching plan that reaches far beyond the Quayside development, Sidewalk Labs plans to invest more than $20 million CAD to help fund and create startups and the spaces that house them.

It has proposed investing $10 million (all numbers CAD) in an applied research institute as well as $10 million to establish a new venture fund for local startups.

The plan outlines a global hub for innovation, backed by both a venture fund and applied research institute. As a key pillar of its IDEA district, which encompasses 190 acres of Toronto’s eastern waterfront, Sidewalk wants to create a new cluster for urban innovation “designed to address the challenges to improving life in cities today.”

“This approach can shape the future of the field, create thousands of jobs, and drive economic,” the plan stated. “Anchored by a new Google Canadian headquarters and an Urban Innovation Institute, this cluster would build on Toronto’s leadership in areas such as artificial intelligence and other technology specialties while supporting the growth, and invention, of new cutting-edge industries.”

Innovation hub

Sidewalk proposes to invest $10 million in seed, grant-style funding for the new graduate applied research institute, which would be located at Villiers West near the Google headquarters. The plan states that the Urban Innovation Institute would be an independent non-profit designed in collaboration with local academic institutions and stakeholders. Sidewalk also foresees the institute being a degree-granting institution, possibly in connection with a local university or post-secondary institution.

The Urban Innovation Institute would be the vehicle through which academics, industry leaders, entrepreneurs, and civic actors could access, contribute to, and export the learning made possible throughout Quayside and the IDEA District.”

Urban Innovation Institute would be an independent non-profit designed in collaboration with local academic institutions and stakeholders.
 

The Alphabet subsidiary is already looking in the Toronto area for partners for the project and sees the institute becoming self-sustaining over time through research funding and offering collaborative degree programs. It also sees the institute making money from “potentially innovative approaches to technology transfer and intellectual property.” The plan stated that as an example of making money off of innovative tech, Waterfront Toronto and Sidewalk could choose to dedicate a portion of revenues generated from tech developed within the IDEA district to the institute.

The institute would focus on four areas: applied research, product research and development policy research and development, as well as new skills development. The plan called the Urban Innovation Institute a “vehicle” that would structure third-party access and collaborations. It noted that the opportunity for data collection within the entire IDEA district may be valuable for research and could help entrepreneurs develop and test prototypes and concepts.

Sidewalk called the institute important to the overall mission of the project and urban innovation ecosystem it hopes to create. The $10 million would be administered “by an entity to be agreed upon during the planning process.”

Alex Ryan, VP of MaRS’s Solutions Lab expressed to BetaKit that while MaRS Discovery District welcomes the idea of this kind of institute, there would still be some concerns.

“The two key things are around academic freedom and intellectual property,” he stated, noting that it would be important to ensure that academics would own their research and have the academic freedom to research what they wanted.

Sidewalk Labs venture fund

Sidewalk Labs is also proposing that it will invest $10 million in initial capital to establish a new venture fund for Toronto and Ontario-based startups focused on early-stage investment in urban innovation.

It sees the fund as a way to help fuel startup growth by offering opportunities to utilize the digital infrastructure and open standards within Quayside, Villiers West, the overall IDEA district, and the institute.

“Ensure that early-stage portfolio companies are able to tap into the networks, resources, and opportunities generated by the urban innovation cluster.”

“Sidewalk Labs will look to partner with Toronto-based innovation incubators to provide shared services, research, support, and flexible space within Quayside and Villiers West, and to ensure that early-stage portfolio companies are able to tap into the networks, resources, and opportunities generated by the urban innovation cluster,” the plan stated.

Sidewalk plans to work with local funders, either as co-investors in the fund or as additional investors in its portfolio companies.

“By working with existing angel, venture capital, corporate and ecosystem players, Sidewalk Labs aims to help provide a foundation for the development and growth of the urban innovation industry,” the plan said.

The company is currently seeking additional funding from local partners to increase the size of the fund as well as a fund manager. Ryan told BetaKit that MaRS welcomes the idea of Sidewalk’s venture fund, noting that it is positive to have more early-stage capital support in the space. And while Sidewalk refuses to disclose some of the partners it is working or planning to work with, Ryan indicated that MaRS, which has experience operating these type of funds with IAF, spoke with Sidewalk CEO Dan Doctoroff about the fund recently.

The venture fund, while obviously being a way to create capital for Sidewalk Labs is not integral to its revenue generation model for the company. It may, however, look to operate as a strategic investor, allowing potential startup tech to be incorporated into the smart city.

Along with this institute and venture fund, Sidewalk’s proposal also stated plans to create a business incubator program, to be developed with a local partner. The incubator would provide space and support for “underrepresented and for low-income entrepreneurs, and small business owners from diverse communities.” Sidewalk plans to issue its own Request for Proposals (RFP) for partners to launch and operate the “small” incubator that would be open to entrepreneurs in the Greater Toronto Area.

“The innovation ecosystem requires all of these pieces,” Ryan stated. “I think that Sidewalk Labs actually putting skin in the game and investing in some of the technologies that are going to be deployed in the sight we see that as accelerating the innovation process.”

Meagan Simpson

Meagan Simpson

Meagan is the Associate Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.