Markham, Ontario’s VentureLab has received $1.5 million from the Regional Municipality of York to expand its hardware and semiconductor-focused incubator.
York Region, where VentureLab is based, is investing the money over a five-year period to help the innovation group leverage grants it received from the federal government through the Federal Economic Development Agency for Southern Ontario (FedDev).
In March 2021, FedDev promised $4.7 million for VentureLab’s Hardware Catalyst Initiative Lab, expanding on an initial $5 million investment that helped establish the initiative.
VentureLab claims the Hardware Catalyst Initiative is Canada’s only lab and incubator for founders building hardware and semiconductor-focused products. The program supports companies that produce the hardware for artificial intelligence, machine learning, and quantum computing.
“Since launching the Hardware Catalyst Initiative 2 years ago, we have worked with the best and brightest minds in the semiconductor space here in Canada,” Matt Skynner, COO of VentureLab, said in a statement to BetaKit. “We have helped them build, scale and commercialize their products by giving them access to equipment that is often too costly for hardware startup companies to access. Our multi-million dollar prototyping and testing lab allows these companies to access highly specialized equipment and $50M worth of in-kind contributions from our 35+ industry partners, in the form of resources, expertise and mentorship.”
VentureLab will use the municipal government funding to expand the capacity of its Hardware Catalyst Initiative in order to support more Canadian hardware and semiconductor companies. The innovation group also plans to open up the program to international companies.
“Chips, sensors, and semiconductors are the brains that underpin virtually all emerging sectors and technologies, from everyday household appliances to EVs, life-saving medical technology, and vaccine production,” said Skynner. “All told, the global semiconductor industry is worth over $7 trillion USD, and the demand for these highly specialized products will only grow as products get smarter and faster.”
“In order for Canada to emerge as leaders in this extremely critical IP-rich industry, and in order to build a strong and resilient domestic supply chain, we must focus on laying the groundwork now,” he added.
The focus on semiconductors is a timely one as the world has been facing a shortage of chips over the past year. Samsung, one of the world’s biggest manufacturers of semiconductors, recently predicted a 54 percent jump in profit as the shortage continues.
Canada has a deep history in the chip sector and was once considered a leader in the space. Canadian companies in the space include GaN Systems and Redlen Technologies, the latter acquired by Canon last year in a $341 million deal.
Last year also saw the creation of a national Semiconductor Council, which hopes to make Canada a global hub for semiconductor research, design, and manufacturing.
Late last year, the council released recommendations on how to build Canada’s semiconductor space. Those recommendations included developing onshore manufacturing capabilities for semiconductors, pointing to the creation of a fabrication plant.
Noted Canadian investor Matt Roberts, who has a family history in the semiconductor industry, called many of the proposals good, but warned: “on the point of a building semiconductor fab … I want to make clear I don’t think the timing could be worse for this.”
Roberts cited the expensive nature of the endeavour, pointing to other countries that are already creating fab plants. “I think we should be watching in disbelief as more countries saddle themselves with the expensive initial cost and maintenance of fabs,” he said.
Among the founding members of the council is VentureLab CEO Melissa Chee.
More than 35 globally-based partners partner with VentureLab on its hardware incubator, including IBM, Dell, Siemens (Europe’s largest industrial manufacturer), and Silicon Catalyst, a fellow incubator for semiconductor solutions. The partners are said to have committed over $50 million in resources, equipment, expertise, and mentorship for the companies participating in Hardware Catalyst Initiative.
The injection of capital from York Region is expected to create 145 new jobs by attracting international semiconductor companies to grow and scale in the area. York Region, which sits just outside the Greater Toronto Area (GTA) is home to nine local cities and towns and 1.2 million residents.
“Our investment into the Hardware Catalyst Initiative will help ventureLAB expand its capabilities, attract top talent and jobs and continue to demonstrate that York Region is a global destination of choice for entrepreneurs and investors,” said York Region Chairman and CEO Wayne Emmerson.