What did the last year look like inside some of Canada’s biggest and fastest-growing technology companies?
At Wealthsimple it was about reshaping revenue streams. At Float, the company changed its product roadmap. And Xanadu’s CEO is travelling constantly, engaging investors and policymakers in the potential of quantum computing as the company prepares for a $200-million, all-Canadian raise.
“If you’re gonna run a company, you need to stand up, and communicate what you think is best for that company.”
Rob Khazzam, Float
Fresh off its SABEW Canada wins, BetaKit welcomed an audience of 100 leaders and finance professionals to BetaKit Talks: In the Black on June 25.
Hosted in partnership with Float, which recently launched bill pay and reimbursement products as part of its “all-in-one” business finance platform, the BetaKit Talks event series convenes leaders from across Canadian tech for candid conversations on key topics.
In a packed room at Toronto’s StartWell Event Studio, BetaKit CEO Siri Agrell led a conversation about navigating economic downturns and Canadian regulatory hurdles, featuring Rob Khazzam, CEO and co-founder of Float, Christian Weedbrook, CEO and founder of Xanadu, and Hanna Zaidi, VP, payments strategy and CCO of Wealthsimple.
“These things became important: finding new revenue opportunities, finding cost management opportunities,” said Zaidi, who chronicled the recent industry shift from a growth mindset to the prioritization of cost management. “That’s where specific teams or groups of people really thrived.”
It burns
The last few years have been challenging for tech companies across the board. Reflecting candidly on how they navigated the economic downturn, the featured leaders spoke about changes in hiring practices, goal setting and strategic planning.
Zaidi, who leads payments strategy at Wealthsimple, recalled stepping back, setting a clear plan, and hyper-prioritizing.
“It’s about really defining clear metrics. We had ‘war rooms’ on a daily basis, that became weekly and then became monthly,” she said. “And not looking at vanity metrics. Look at what’s really moving the dial.”
The company successfully introduced a new revenue stream by internalizing foreign exchange processes and simultaneously revisiting their agreements with banks to achieve significant cost savings.
“We negotiated the shit out of every agreement,” Zaidi said frankly, outlining for the audience Wealthsimple’s six-point approach to navigating headwinds and diversifying away from transactional-based revenue.
For Weedbrook and Xanadu, the impact of higher interest rates and decreased external investments was minimal, as their ambitions to build a quantum data centre have significantly longer timelines.
“I just discovered last week what revenue meant,” Weedbrook joked.
But as a quantum computing company, Xanadu had to secure substantial funding early on to try to build frontier technology that had never been built before. By the nature of the work, investors knew their money was in for the long term, which protected the company from feeling the pressures of rising interest rates and the demand for quick returns.
“We’re still one of these companies that’s a moonshot. It’s like the pre-internet,” Weedbrook said. “You seek out those investors or VCs that are looking for something that’s more long-term, they don’t really concern themselves with the fluctuations of the months and years. Which is actually probably the best type of investor anyway, no matter what you do.”
But that doesn’t mean the founder is without external pressures. He plans to spend the next year travelling the world as part of his efforts to raise the company’s next $200 million, almost all of which would fund necessary investments in hardware and infrastructure.
At Float, timing is also key. The company raised its seed and Series A rounds within seven months, right before interest rate hikes. But while this provided a financial cushion, it also placed significant pressure on Float to demonstrate growth to match its valuation–a challenge the company successfully met.
“In the last year and a half, we’ve grown our team size effectively by net six people but more than doubled our revenue,” he said.
The dramatic economic shift changed Float’s product roadmap and worked on external products and strategies to help their customers understand the percentage of savings they got for every dollar they spent on Float.
“Are we actually saving you time and money or are we just making it easier for you to spend money?” Khazzam asked.
Each leader acknowledged that changing financial realities have also impacted employees, who have had to navigate a challenging job market and high cost of living, while adapting to new workplace norms.
Traditionally, the tech industry has attracted ambitious talent, but now there’s a need to foster a more conservative, save-and-hold mindset, which requires a fresh approach from employers.
“2021 was a period where no one wanted to say anything that would spook talent. It’s just a cowardly way to run a company,” said Khazzam. “If you’re gonna run a company, you need to stand up, and communicate what you think is best for that company.”
Weedbrook agreed that it’s about finding people who are motivated by purpose and mission. At Xanadu, employees understand that their work is groundbreaking and inherently challenging.
Compensation and incentives are important, each leader acknowledged, but what that involves is different for each company and its product focus.
“Each company is like a country, with its own laws,” said Weedbrook, whose team at Xanadu is largely back in the office full time. “You need a healthy force to push you back and keep you motivated.”
The next big thing
During the event, each leader also shared an ambitious goal that motivates them through challenging moments.
Wealthsimple is already used by one in five Canadians under the age of 40. But Zaidi said the company’s next goal is to become every Canadian’s primary financial relationship, challenging the country’s Big Six banking institutions.
Xanadu wants to build a quantum version of a data centre in Toronto, this decade.
“In the ultimate version, we’d actually have a data centre… half a football field, an acre of land, and hundreds of thousands of servers,” said Weedbrook. “And we want to build our own quantum version of that. And I’d like to do it somewhere along the lake.”
“Each company is like a country, with its own laws. You need a healthy force to push you back and keep you motivated.”
Christian Weedbrook, Xanadu
Khazzam said that Float has ambitious, revenue-oriented objectives, but shared that his own goals relate to engaging Canadians in the possibilities of open banking, quantum, and other innovations that can benefit people’s lives.
“What are we going to do, our generation, over the next 50 years, to contribute as much to our country and the people who come after us as the people who came before us?” he asked. “I think we all need to level it up.”
A common barrier to each leader’s goal is government policy and the slow speed of investment and adoption, what Shopify CEO Tobi Lütke refers to as Canada’s “go-for-bronze” culture.
Weedbrook noted that two of the world’s largest pension funds are in Canada, a fact that doesn’t align with popular perceptions about where investment is available.
“I’m travelling the world to prepare for our next round, because you have to form relationships and you have to explain quantum computing which takes even longer,” he said. “Just practically, I’d rather walk down the street to the pension funds than hop on a 15-hour flight to Dubai or Singapore because there are sovereign wealth funds there.”
Khazzam asked Weedbrook if it is important to him to raise his next round entirely in Canada.
“It is, because I’m Australian and I already abandoned one country,” he said. “The first thing is to try. The automatic thought shouldn’t be, ‘Let’s go elsewhere.’ It is possible. The more we do this, the more it will become that the first reaction will be ‘Let’s look in Toronto or Canada.’”
The leaders talked in depth about a “good enough” culture in Canada, with Khazzam noting the popular acceptance of the Beer Store in Ontario, which limits consumer choice in favour of perpetuating monopoly interests.
Zaidi added that regulatory and policy barriers prevent Canadian companies from taking bigger swings, but tech’s propensity to complain doesn’t help. She believes the first step towards change is to find a strategic way to connect with policymakers.
“Often policymakers don’t realize or care or understand why these things are important for Canadians,” Zaidi said. She noted the tech community needs to be more effective in the way it connects with policymakers by better understanding what motivates them.
Khazzam referenced his time as Uber Canada’s General Manager as an example of how rallying public support and buy-in can create much-needed urgency around regulatory changes.
“If no one in Canada cares about these things, and they don’t tell people they care about them … nothing’s going to happen,” he said. “The world, especially in Canada, can change. It’s about belief, inspiration, and ambition, and cultivating that.”
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