Although only Toronto-Waterloo and Vancouver made Startup Genome’s top 30 list this year, several other Canadian cities made appearances as regions to watch for certain sectors. For the first time, Calgary and Atlantic Canada emerged in the report as ecosystems to watch, with Atlantic Canada listed as a life sciences sector, and Calgary excelling in life sciences and cleantech.
“Our mission is really to help the smaller ecosystem accelerate, catch up, and grow.”
-Jean Francois Gauthier, CEO Startup Genome
In 2018, Startup Genome’s report dove deep into Montreal, Quebec City, Toronto-Waterloo, Vancouver, Ottawa, and Edmonton as tech hubs, opting for a case study approach, rather than assigning each city a rank. This year, Startup Genome brought back the ecosystem ranking, but also highlighted ecosystems to watch, rather than reporting on the highest-placing cities. The report’s sector breakdown named Atlantic Canada, Montreal, Edmonton, Quebec City, and Calgary as ecosystems to watch.
Startup Genome CEO Jean Francois Gauthier said this move was spurred by a desire to highlight global up-and-comers that didn’t make it into the top 30.
“We can help [ecosystems] pick a strategy and develop an identity,” Gauthier told BetaKit. “We’re focusing on how important it is for us to help the smaller ecosystem build an identity. Our mission is really to help the smaller ecosystem accelerate, catch up, and grow.”
Western Canada flourish in cleantech
Vancouver and Calgary were both listed as ecosystems to watch for the cleantech sector. The two Western Canada cities are both home to a growing number of cleantech companies as well as investment opportunities from private and public backers.
Evok Innovations, a $100 million fund by leading local cleantech entrepreneurs and energy companies, provides Vancouver-based companies such as Cenovus Energy and Suncor Energy access to capital. Two noteworthy startup success stories from Vancouver are sustainable agriculture cleantech Terramera, which raised more than $33 million USD, and Saltworks Technologies, which is considered a world leader in advanced wastewater technology. Saltworks Technologies recently received a $4.4 million investment from the federal government.
Back in March, Cisco Canada announced a $15 million investment in Calgary and Vancouver geared toward developing skills in the tech sector, as part of its Country Digitization Acceleration program, which includes investments spanning several sectors, including cleantech. Last month, cleantech company Ecoation, which developed a fully autonomous scout robot that monitors the health of plants, received a federal government investment of $3 million to increase the crop yield of greenhouse growers.
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Calgary has seen similar investments in its cleantech ecosystem. In February, the Government of Canada announced an investment of nearly $13 million in four Calgary-based cleantech companies. One month later, the Emissions Reduction Alberta announced 16 projects that would receive $100 million CAD in funding through its BEST Challenge, a funding opportunity for biotechnology, electricity, and sustainable transportation.
“This is an optimistic time in this city. We are truly committed to working together to transform our economy through investments in innovation, technology, and the people that make it happen,” said Terry Rock, president of Platform Calgary. “The Startup Genome rankings are an accurate reflection of the Calgary ecosystem, showcasing our city’s strongest assets. Our energy industry is dedicated to sustainable development through cleantech innovation. We’re building a world-class Life Science hub at the University of Calgary.
The Canadian AI trifecta
Canada is minting a strong reputation as a global leader in artificial intelligence, with AI labs setting up shop in Montreal, Vancouver, and Toronto. Montreal, for one, is certainly no stranger to AI development and innovation. The city has been a backbone for the industry since the early years of Yoshua Bengio, considered one of the pioneers of neural networks and deep learning in the 1980s. In 2016, Bengio helped found Element.AI in the city.
The Montreal Institute of Learning Algorithms (MILA) connects researchers from two of the biggest universities in the city: The University of Montreal and McGill University. MILA was created to forge a community of professionals who wish to push the envelope for AI innovation.
Recently, Axionable, a French company specializing in data and AI strategies for businesses, announced the opening of a new AI lab in Montreal and last week, Swedish telecommunications equipment provider Ericsson also opened the doors to its own AI accelerator hub in the city. Microsoft also expanded its AI presence in Montreal in 2018, hiring Carnegie Mellon University artificial intelligence professor Geoffrey Gordon to serve as its research chair, and doubling its team in the Montreal research lab.
RELATED: 10 Montreal tech companies to watch in 2019
Despite this, Montreal has slipped in the rankings, after making it in the Startup Genome’s top 20 in 2015, the city plunged, not even making it onto the top 30 list of startup ecosystems globally. But Gauthier told BetaKit that Montreal very nearly made Startup Genome’s top 30 cut, stating that Montreal sat somewhere between 30 and 35. Due to the fact that Startup Genome is not publicizing ecosystems beyond the top 30, BetaKit could not determine Montreal’s exact ranking, however, the report did name Montreal as one of the “challenger ecosystems,” which could rival the top 30 in the years to come.
“Montreal is not far behind,” Gauthier said. “We think Montreal will do better and better. Maybe they’ll come back in the ranking.”
Beyond Canada’s biggest cities, some smaller ecosystems were also recognized for their leadership in AI by Startup Genome’s 2019 report. Edmonton was lauded for its AI ecosystem, to little surprise. Edmonton-based Alberta Machine Intelligence Institute (Amii) is one of three AI institutes across Canada leading the federal government’s Pan-Canadian AI Strategy, a $125 million investment. Part of the strategy included plans to build on and grow AI strengths at the University of Alberta. The provincial government also pledged $100 million for the field of AI over the next five years.
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Edmonton boasts 11 co-working spaces, three accelerators, and over 20 incubators, and is also home to institutes like the Metabolomics Innovation Centre and the National Institute of Nanotechnology. In 2017, the city became home to Google’s first international DeepMind AI office. StartupBlink’s most recent report noticed Edmonton too, citing the Alberta city as having one of Western Canada’s most dynamic startup ecosystems. Another major player which has gained more interest in AI research is the Royal Bank of Canada. The bank established its Edmonton office in 2017, named Borealis.AI.
In February, the Alberta government announced an investment of $27 million that will go directly to the Amii. The city is also home to Edmonton.AI, and the University of Alberta in Edmonton, creating an AI-supercomputing hub for academic and industry collaboration.
The more overlooked AI ecosystem recognized by Startup Genome is that of Quebec City. In its 2018 report, Startup Genome it did not mention AI in its exploration of Quebec City, even though it houses a number of AI companies and research organizations, including AIWorx and the GRAAL research group at Laval University.
Last year, Christine Pouliot, deals partner for PwC, specifically highlighted AI’s role in Québec City. She noted Coveo and its AI service that combines analytics and machine learning to deliver relevant information and recommendations across business interactions.
Budding life sciences ecosystems
The third and final sector of note for Canadian ecosystems was life sciences, for which Atlantic Canada, Calgary, Edmonton, and Toronto-Waterloo were highlighted.
According to Entrevestor, Atlantic Canada-based life sciences companies received $74.3 million in equity funding in the first three months of 2019 alone. Halifax-based Appili Therapeutics recently became the second company from the region to list publicly, raising significant funding in the last two years, including a $4.3 million round in early 2018, and a $2.2 million round in December 2016.
“Calgary and Edmonton are really now focused on investing aggressively to develop the right strategy.”
Fredericton also saw an increase of venture capital deals and dollars last year, culminating in the city nailing a spot as one of Canada’s top five tech markets in PwC’s MoneyTree report for Q3 2018. Fredericton companies raised more than $2 million USD over three deals in the quarter, which was “well above the historical range for the city.”
“This reflects what we’ve been seeing in the sector as it relates to assets in the community from an incubation standpoint and the capital that’s available in that sector as well as the performance of the companies,” said Malcolm Fraser, president and CEO of Innovacorp, a Nova Scotia-based early-stage venture capital organization. “Atlantic Canada is only one player. I expect you will see us continue to rise.”
Calgary was one of the other ecosystems recognized by Startup Genome’s report for its leadership in life sciences. Calgary was accompanied by Edmonton, which also has a strong and consistently growing base in life sciences, with approximately 60 percent of all Albertan life science companies located there. According to innovation hub, Edmonton Research Park, more than 60 percent of biotechnology firms call Edmonton home, making the city the biotech hub in the province. The pharmaceutical industry is specifically noteworthy as an emerging industry in the city with the entry of large pharmaceutical players such as Gilead, Naeja, McKesson Pharmaceutical, and Aurinia Pharmaceuticals Inc.
RELATED: Report: As Alberta’s tech sector matures, rate of new startups is slowing
Gauthier said he expects both Calgary and Edmonton to grow and rank higher on Startup Genome’s list in the future, but their smaller populations, in comparison to the other ecosystems, present challenges for both.
“Calgary and Edmonton are smaller cities,” Gauthier said. “It’s harder for them to grow a big ecosystem. But Calgary and Edmonton are really now focused on investing aggressively to develop the right strategy [to grow].”
As a whole, Canada has the third-most top 30 ecosystems in the world, remaining the only country with two ecosystems among the top 25 besides the US and China. The recognition of Canada’s budding regions could signify good signs for the country, but Gauthier noted that government support is crucial to seeing these regions accelerate on the global stage.
“As we work with seven of the eight of the largest Canadian startup ecosystems, we know that they are growing rapidly, but that is not enough,” Gauthier said. “What’s encouraging is the increasing level of well-designed policy and program investments at the federal and local levels across most of them. Most provinces, however, have relatively maintained if not reduced their support to startups despite seeing their global peers rapidly increase it. This concerns us.”
