Welcome to a new year. Welcome to a new decade.
But before you strap in and launch headlong into the next 10 years, let’s go retro with a look back at the year that was for the Waterloo Region tech scene, a year that brought big raises, big acquisitions, big product launches – hello there, ION light rail – and big discussions. Discussions about talent. Discussions about the future of work.
And discussions about the growing number of local companies reaching breakout velocity, companies like ApplyBoard, Faire, eSentire, Magnet Forensics, Auvik Networks, Intellijoint Surgical and a host of others, companies which, no doubt, will help shape the coming year and ones beyond.
But first, and without further ado, let’s go back in time…
The year kicked off with a big product launch. North, formerly Thalmic Labs, unveiled its smart eyewear called Focals by North at the Consumer Electronics Show in Las Vegas after a soft launch the previous autumn.
The Waterloo Region Record, meanwhile, focused in on D2L, the Kitchener-based e-learning company, as it began a year-long celebration of its 20th anniversary. D2L founder and CEO John Baker told the Record’s Terry Pender that the company would spend the year leaning in on the future of work as an issue, as AI and other technologies transform the workplace.
Baker’s words proved prescient. Future of work was a phrase that would resonate through much of 2019, and was the subject of an event at the Tannery Event Centre in January, the first in a series of talks about the future of work sponsored by Deloitte, Manulife, and the University of Waterloo in partnership with Communitech.
Meanwhile, Waterloo-based Aeryon Labs was acquired by Oregon-based FLIR Systems for US$200 million, 12 years after the company’s founding in Dave Kroetsch’s garage.
Appropriate in a month that starts with the letter “F,” Communitech News videographer Sara Jalali launched “The Other F Word,” a series that explores the mythologies and complex truths around failure.
Quite the opposite of failure was the circumstance over at Kitchener’s DOZR, which announced completion of a CDN$14-million Series A raise.
But there was a bit of a pause over at North. After the fanfare of its Focals launch at CES in January, the company reduced the price of the product by CDN$500 and then announced layoffs. The federal government followed by saying it would freeze $24 million in investment.
Communitech took the wraps off a special investigation into the issue of tech talent, speaking with several University of Waterloo grads, as well as employers, to gain a granular perspective on the decisions new grads make when signing up for their first job. There were a number of interesting surprises.
And a surprising amount of money flowed through the community in March. Bridgit, the Kitchener-based maker of construction software, landed CDN$7.75 million in new investment. Another Kitchener company, Avidbots, raised a US$23.6-million Series B. And fast-growing cybersecurity firm eSentire unveiled a US$47-million round and announced it would be moving from Cambridge to Waterloo. At the other end of the scale, Alexandra McCalla, CEO of a startup called AirMatrix, earned the $100,000 grand prize at the Fierce Founders Pitch Competition.
Speaking of moves, Kik took up residency in the sprawling Catalyst137 complex, heralding what would be a busy, and trying, few months for the messaging app company. More on Kik shortly.
Finally tech veteran, Guelph investor and philanthropist Jim Estill received the Order of Canada for sponsoring and helping to resettle 61 refugee families from Syria. Estill’s name would emerge again later in the year with an entirely new and novel project…
The flowers bloomed and so did interest in the region from government leaders of all stripes. Prime Minister Justin Trudeau stopped by Communitech to unveil the $52-million Scale-up Platform, to help tech-based companies reach $100 million in annual revenue.
A couple of days later, the federal Minister of Innovation, Science and Economic Development, Navdeep Bains, was in town to announce a $41-million investment in work taking place in the fields of quantum computing, AI and machine learning. Some $20 million alone was earmarked for the Quantum Valley Ideas Lab.
And Ahmed Hussen, the federal Minister of Immigration, Refugees and Citizenship, stopped in at Kitchener scale-up ApplyBoard, which moved into new downtown digs and celebrated growth to 170 employees, a number since surpassed.
On the provincial side, Ontario’s then-Minister of Labour, Laurie Scott, took part in a future-of-work workshop at the Tannery Event Centre.
Over at the Perimeter Institute for Theoretical Physics, faculty member Avery Broderick, who is also a UW associate professor, was part of a team that created a world-wide stir with the unveiling of the first photo of a black hole. “This is the first time that we’ve been able to push Einstein’s theory of gravity down to the edge of the observable universe,” Broderick told The Canadian Press.
And if you missed it, be sure to go back for a look at an uplifting piece written by Communitech News editorial director Anthony Reinhart, who described how Waterloo scale-up Bonfire teamed up with an agency called Talent Beyond Boundaries to welcome a Syrian refugee, Mohammed Hakmi, as one of its newest software developers.
A busy month wound up with a couple of big announcements: First, ApplyBoard closed on a US$55-million Series B, and just a few days later, Conestoga College announced it had leased 82,000 square feet to house a new downtown campus, set to open early in 2020. The two announcements were linked, too: Craig Haney, Vice-President of Europro, owner of the Conestoga space, told Communitech News that ApplyBoard’s fast growth played a role in the college deciding to move downtown.
Communitech videographer Sara Jalali, meanwhile, rolled out her latest The Other F Word instalment, featuring Kiite co-founder Donna Litt.
And Vidyard’s Michael Litt joined Faire CTO Marcelo Cortes on stage in Toronto at Collision, the annual North American tech conference, where they were on a panel talking about the challenges of scaling a tech company in Canada.
Challenging or not, the progress made by an entire generation of startups in Waterloo Region helped catch the eye of Startup Genome, which ranked the Toronto-Waterloo Corridor at No. 13 worldwide among startup ecosystems, up from 16th two years previous. Communitech News spoke with Startup Genome CEO J-F Gauthier about the findings, and Gauthier cited Communitech as a vital piece of the region’s performance, calling it a “keystone.”
True North, the 2.0 edition, unfolded over two days at Lot42 to rave reviews. The second iteration of the conference built on the momentum from the inaugural event in 2018 and once again explored themes at the intersection of technology and humanity under the umbrella of “Tech for Good.” The event attracted 2,500 people from around the world and featured speakers like New York Times journalist and author Thomas Friedman, Sir Tim Berners-Lee, inventor of the World Wide Web, tech critic and journalist Kara Swisher and Shopify CEO Tobi Lütke, among many others, all of it accompanied by a downtown festival with music, dancing and food.
The conference closed and the very next day the region awoke to an event it had long anticipated – launch of the ION light rail system. The 19-kilometre, 19-station line, which had sparked more than $3 billion in real estate and infrastructure development before service was even launched, quickly transformed the way people move through the region.
A couple of days later, the Record broke the story that Google plans to more than double its local footprint with 300,000 additional square feet of space in an 11-storey building 51 Breithaupt St., across the street from its current 185,000-square-foot facility.
Cybersecurity firm eSentire, meanwhile, completed its move from Cambridge to its current 65,000-square-foot office at Factory Square in Waterloo.
Interesting to note that both Google’s proposed space and eSentire’s new digs are accessible to the new light-rail line.
Forbes interrupted the summer doldrums by naming Faire, the San Francisco-based company with roots and an engineering office in Kitchener, to a list of 25 companies likely to become a unicorn (valuation of $1 billion or more). Spoiler alert: Events later in October would prove that Forbes was onto something…
Onetime unicorn Kik celebrated its 10th birthday and CEO Ted Livingston chatted with Velocity Director Jay Shah about the event.
The federal government, hoping to feed more unicorns, announced a $20-million pilot project to spur adoption in Canada of Canadian-built medical technology – a problem that has long vexed local medtech companies, among them Intellijoint Surgical. Intellijoint CEO Armen Bakirtzian told the Globe and Mail he had high hopes for the program.
And there was a bit of movement on another vexing issue – establishment of two-way, all-day GO train service between Toronto and Waterloo Region. The province began construction in Toronto on rail tunnels under highways 409 and 401 designed to bring “us one step closer” to corridor rail service improvements, Ontario’s Associate Minister of Transportation, Kinga Surma, said.
Finally, Rogers, the telecommunications giant, announced plans to open a local 5G testbed and innovation lab, part of a three-year, $1-million-plus partnership with Communitech.
Seeing, they say, is believing. VueReal, which employs nanotechnology to enhance video displays, was featured in the Record as it neared completion on an advanced nanotechnology centre at its 16,000-square-foot Phillip Street office, part of a $24-million project.
Velocity, the University of Waterloo’s startup incubator, announced some pending changes. Director Jay Shah wrote in a blog post that a search was under way for an executive director and, once found, Shah would become Director, Startups, and Camelia Nunez, the incumbent Associate Director, would become director of a pre-incubator which was later named Concept.
Speaking of UW, Navdeep Bains, federal Minister of Innovation, Science and Economic Development, dropped by the university to announce a trio of initiatives, headlined by a $30-million patent collective pilot project.
And federal money found its way to the region’s other university, too. Wilfrid Laurier received $1.38 million from the Women Entrepreneurship Strategy Ecosystem Fund to spur business and social initiatives led by women.
Finally, UK-based Trak Global Group, which brought Waterloo’s Intelligent Mechatronic Systems (IMS) out of receivership in December of last year, completed a US$50-million raise, one it said would be of benefit to IMS.
Communitech News led off a jam-packed September news roundup with a breaking story from early in October, namely the decision by Communitech CEO and President Iain Klugman to step down in January, 2021, when his current contract expires. Klugman, 58, has led Communitech since 2004, when it had just seven staffers.
One of the projects Klugman said he plans to work on between now and then is a Communitech program called Outposts, which was announced in September. Outposts aims to ease international expansion for Canadian scaling companies by establishing legal entities outside Canada that will take care of their back-office needs. In other words, when it comes time for a company to hire an overseas employee, the Outpost will take care of payroll, benefits, statutory filings, etc., substantially reducing the barriers to establishing a foreign office.
A new book about the region’s tech ecosystem hit store shelves. BlackBerry Town – How high tech success has played out for Canada’s Kitchener-Waterloo is written by former Record tech journalist and editor Chuck Howitt, who did the region a service by weaving many of the important threads that led to today’s vibrant and growing sector.
And that growth continued apace. Jim Estill, CEO of Guelph-based Danby Appliances who won the Order of Canada earlier in the year for his work sponsoring and settling Syrian refugees, launched a new startup – ShipperBee, which looks to utilize the cargo space in people’s personal vehicles and disrupt the package and parcel and logistics vertical.
Terminal, which provides office space and back office services for U.S. companies, announced a US$17-million Series B. Terminal has a Kitchener location, as well as others in Vancouver, Toronto, Montreal and Guadalajara, Mexico.
And Waterloo-based Plum announced a US$4.2-million raise. Plum has evolved from a company focused solely on recruitment to one that handles enterprise talent management.
On the M&A front, Kitchener’s Delego Software was acquired by Atlanta, Ga.-based EVO Payments Inc. Terms were not disclosed.
Meanwhile, the Globe and Mail rolled out its list of 400 top growing companies, and seven with a Waterloo Region presence made the cut, including Auvik (No. 4), Voltera (No. 42), Bonfire (No. 49), Bridgit (No. 79), Smile (No. 83), Shopify (98) and Magnet Forensics (No. 256).
Finally, there were big changes at Kik. The company announced it was shutting down its messaging app and transferring most of its staff and its space at Catalyst137 to a Silicon Valley company as it continued to fight charges levelled by the U.S. Securities and Exchange Commission that it conducted an “illegal” securities offering when it made its first sale of Kin cryptocurrency.
Just as Forbes predicted back in July, Faire reached the unicorn threshold – $1 billion in valuation – with a US$150-million Series D raise, bringing total funding to US$266 million. The company, formerly known as Indigo Fair, is a supplier for mom-and-pop retail outlets; its special sauce is that it curates merchandise based on sales data and its algorithms are so accurate, its confidence in its ability to offer just the right products so high, that it allows stores to return unsold merchandise. Faire is jointly based in San Francisco, where its business operations are located, and Kitchener, where engineering takes place in the former Budd’s department store – ironically, just the type of retailer that might have benefited from Faire’s technology.
More big changes were afoot at a former Waterloo Region unicorn, Kik. After announcing the month previous that it was shutting down its messaging app to focus on Kin, its cryptocurrency, Kik followed up with news that most of its Kitchener employees had been hired by a San Francisco equity management company called Carta, and that the messaging app had been purchased by another Bay Area company, MediaLab. The company’s battle with the U.S. Securities and Exchange Commission, meanwhile, continues.
On the finance side, the Record’s James Jackson reported that Golden Triangle Angel Network (GTAN), based in Cambridge, had joined up with two southern-Ontario investment organizations – the Angel One Investment Network and the Southwestern Ontario Angels – to form Equation Angels.
Toronto’s VitalHub Corp. acquired Oculys Health Informatics for CDN$4.2 million, and Kitchener-based medtech firm NERv Technology landed CDN$1 million in pre-seed funding.
Ontario Finance Minister Rod Phillips paid Waterloo Region and Communitech a visit, sitting down with local business and civic leaders in order to hear their concerns. Phillips told Communitech News afterward that two issues came through loud and clear: the need for talent and improved rail service.
And there was yet another notch for Jim Estill’s busy 2019. Estill, the Danby Appliance CEO who won the Order of Canada earlier in the year and launched a new startup called ShipperBee, was named Ontario’s CEO of the year.
Three Waterloo Region companies – ApplyBoard, Intellijoint Surgical and Auvik Networks – were ranked first, second and third respectively among the fastest growing Canadian firms on the Deloitte Technology Fast 50 list.
Speaking of Deloitte, it conducted a comprehensive study of the University of Waterloo’s economic impact, concluding UW-affiliated startups have generated more than $2 billion in revenue and 7,500 jobs during the past decade. UW-affiliated Velocity announced its companies and alumni have raised more than CDN$1 billion in venture capital since Velocity’s launch 11 years ago.
And the money continues to flow. A story in Betakit reported that CDN$2.48 billion in venture capital was invested in Canadian companies in 126 deals in the third quarter of 2019, highest in any quarter.
On the topic of money flowing, Waterloo’s OpenText announced it was purchasing U.S. security software company Carbonite Inc. for a whopping US$1.42 billion. OpenText shares surged.
And Faire’s big raise the month previous was a reason for Communitech News to sit down and chat with CTO Marcelo Cortes, who said plenty more growth is in store for 2020.
Communitech News also talked with Todd Bissett, a lawyer at Gowling WLG who explained how his unique background in technology and China – he has a story about roast duck you don’t want to miss – led to him becoming a go-to advisor for firms looking to do business in the Far East.
Talent was top of mind at Tech Jam, Communitech’s annual job event. More than 1,100 job seekers showed up at Bingemans, the event venue, with 68 companies represented and on the stump aiming to fill 1,000 positions.
More help for talent came in the form of a new entity called the Waterloo Region Future of Work and Learning Coalition, a banding together of 19 local organizations, including Communitech, which aims to get out in front of the issue of workforce disruption brought on by technological change.
Communitech unveiled plans for the next iteration of True North – rebranding the two-day conference, which for the past two years has unfolded at Lot42 under the banner of “Tech for Good,” as the week-long True North Festival, with multiple venues, all running along the spine of the ION LRT route.
As CEO Iain Klugman explained, the plan is to kick off on June 1 and partner with events like Fluxible, the Open Ears music festival and Startup Open House and incorporate venues like the Perimeter Institute for Theoretical Physics and the Kitchener Public Library. The main venue, Communitech-run, will be called Centre Stage and will be located at Centre In The Square.
Ontario’s Minister of Labour, Training and Skills Development, Monte McNaughton, dropped by Communitech, where he announced a $20-million expansion of the Skills Catalyst Fund. Money from the original incarnation of the fund, launched in 2018, helped launch the Communitech Academy, which offers programs to develop talent.
Days earlier a federal cabinet member, the Minister of Economic Development and Official Languages, stopped in at Communitech. Mélanie Joly sat in on a roundtable with local business and community leaders and then declared her admiration for Communitech’s work, stating Canada needs more organizations like it.
North Inc. announced it would stop making and selling the first generation of its Focals smart glasses, aiming to roll out the 2.0 version in 2020, and Faire made its product offering available in Canada for the first time.
Shortly before the holiday break, Rogers, the telecom giant, took the wraps off a partnership with the University of Waterloo on a 5G test network, part of a larger investment that includes a partnership with Communitech, where Rogers opened a 5G innovation lab earlier this year.
Perhaps the fitting coda for the month, as well as the year and the decade, was provided by D2L’s John Baker, who sat down for a Q&A-style interview with Communitech News and reflected back on his company’s 20-year odyssey.
– This edition of the Tech Roundup compiled by Craig Daniels
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Communitech is a partner of Startup HERE Toronto. This article originally appeared on their site.