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2023 Year-end Roundup! – Communitech

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The year that was

Happy New Year! And welcome to our year-end roundup of news from the Waterloo Region ecosystem.

The tech world had a bumpy ride over the past 12 months. Challenges that first surfaced in 2022 continued to impact the industry right through 2023 – inflation, rising interest rates, investor caution and global political unrest. 

Despite the choppy waters, most tech companies found ways to adapt, innovate and prosper. So, before we leap into 2024, let’s take a few minutes to reflect on the year that was.

January

The start of 2023 kicked off with a bang. 

In a surprising move, cyber-investigation company Magnet Forensics – which went public on the TSX in 2022 – gave preliminary approval to an acquisition proposal from U.S. private-equity giant Thoma Bravo. The deal – valued at CDN$1.8 billion – would be the biggest exit in Waterloo Region tech history. The proposal generated mixed feelings, but Magnet shareholders voted overwhelmingly in favour of the offer in mid-March. After the deal received court approval in April, the company was taken private again and combined with Grayshift LLC under the Magnet Forensics name.

In other big news, Waterloo-based OpenText became one of the largest software and cloud businesses in the world after closing a US$5.8-billion deal to acquire British SaaS company Micro Focus. 

Despite a number of good-news stories, tech layoffs dominated the headlines. Google-parent Alphabet announced a global reduction of 12,000 jobs. The tech giant wasn’t alone. Many companies across North America announced their own layoffs, including Vancouver-based Hootsuite and Thinkific, Calgary-based Benevity, Montreal-based Lightspeed, SSENSE and Shakepay, and Toronto-based Clearco, Clutch, Venngage, #Paid, GoBolt and PartnerStack, just to name a few.

Communitech stepped up once again to support displaced Canadian tech workers through its Work in Tech job board and through The Help List, a roster of tech talent that helps connect skilled workers with companies that are hiring.

Meanwhile, the Communitech Hub was a popular stop for federal and provincial cabinet ministers throughout January. The list of VIP guests included then-Defence Minister Anita Anand, federal Minister of Innovation, Science and Industry François-Philippe Champagne, Ontario Finance Minister Peter Bethlenfalvy, and Ontario’s Minister of Economic Development, Job Creation and Trade Vic Fedeli.

February

Tech investors were still keeping their purse strings tight, but several deals in February showed that solid companies in growing markets could still attract capital.

Mappedin, a Waterloo-based company that provides digital maps of indoor spaces, raised CDN$8.6 million through a Series A round. In another deal, Waterloo-based talent platform Plum raised US$6 million. And in Kitchener, Swap Robotics celebrated a US$7-million seed round led by SOLV Energy, a California-based provider of solar services.

Meanwhile, Waterloo Region’s growing medtech sector continued to grow. Tech News wrote about Waterloo-based KA Imaging’s work with Grand River Hospital to improve patient outcomes with a portable X-ray device that provides high-quality images right at the bedside. The commercialization project was supported by the Coordinated Accessible National Health (CAN Health) Network, a federally funded initiative that’s partnering with Communitech to get more Canadian innovation into the health-care system. 

A State of the Markets report by Silicon Valley Bank (released shortly before SVB’s sudden demise in March) included data that suggested Canadian tech companies were riding out the economic turbulence better than their American counterparts. “We expect to see continued U.S. investor interest in Canadian startups given the non-dilutive funding available, lower pricing and high performance,” the report concluded.

While people debate whether Waterloo Region should be called Silicon Valley North, one Waterloo tech legend certainly got the Hollywood treatment early last year. BlackBerry, a feature film about the company that led the smartphone revolution, had its world premiere at the Berlin International Film Festival in mid-February.

March

Shockwaves rippled through the global financial sector following the sudden collapse of Silicon Valley Bank, a California-based institution that provided services to many VC and tech companies in the U.S., Canada and abroad.

Communitech and other Canadian tech leaders leapt into action to assess the impact on Canadian companies and to offer assistance to affected founders. They also made a number of proposals to the federal government about how to support Canadian tech companies in the wake of the SVB meltdown.

Meanwhile, many tech outfits in Waterloo Region continued to shine. Take content-management company Shinydocs Corp. for example. The 10-year-old information-management company announced a raise of CDN$16.25 million – quite the feat in a tight investment market.

In other good news, Waterloo-based VueReal received a combined $10.5 million from the federal and provincial governments to scale its cleantech approach to micro- and nano-display fabrication and printing technology.

In mid-March, shareholders of Waterloo-based Magnet Forensics voted in favour of the CDN$1.8-billion takeover proposal by U.S. private-equity giant Thoma Bravo. The deal, first announced in January, ranks as the biggest exit in the history of Waterloo Region tech.

And in a milestone announcement, the once-mighty smartphone pioneer BlackBerry announced that it was selling 32,000 patents and applications – the bulk of its intellectual property – to Malikie Innovations, a newly formed subsidiary of Dublin-based Key Patent Innovations. The deal included US$170 million up front, with potential royalties boosting that to US$900 million over time.

Concern over generative AI tools such as ChatGPT, Bard and Bing Chat began heating up in 2022. But things took an unexpected turn in March 2023 when a number of prominent tech leaders – including the CEO of OpenAI, which created ChatGPT – voiced concern about the potential for harm, disinformation and misuse. An open letter was signed by more than 1,700 people – including Elon Musk and Apple co-founder Steve Wozniak – calling for a short pause in the development of AI systems until the implications are better understood and safety protocols can be agreed on.

And closing out the month, the Communitech-led Future of Health collaborative (launched in 2022) wrapped up with a final speaker-and-panel event. The year-long initiative brought together health-care providers, government officials and tech founders to seek ways to address health-care challenges through Canadian-made innovation.

April

Traffic-tech company Miovision leapt into spring with a blockbuster announcement – a CDN$260-million raise that was all the more impressive given the cautious investment climate. The Kitchener-based company also announced the acquisition of Global Traffic Technologies of St. Paul, Minnesota, Miovision’s fourth acquisition since July 2021.

In other funding news, fleet-maintenance software maker Pitstop landed US$3.8 million in seed funding through an investment round led by In Revenue Capital and Tech Square Ventures.

Ontario Premier Doug Ford paid a visit to Kitchener’s Innovation District in April to announce $7.5 million in funding for the University of Waterloo’s $35-million health-focused Innovation Arena. The provincial contribution adds to financial backing previously committed by the federal government, the City of Kitchener and local entrepreneur Mike Stork.

The future of automotive transportation rolled into the Communitech Hub for several days in April. The sleek zero-emission vehicle was the product of Project Arrow, a collaborative effort to showcase the capabilities of Canadian engineers and auto-parts makers. Communitech is helping accelerate the development and commercialization of next-generation electric, connected and autonomous-vehicle technologies through a partnership with UW and the Ontario Vehicle Innovation Network (OVIN), both of which contributed to Project Arrow. Other local companies involved in Project Arrow included Cloud DX, Geotab and Toyota Motor Manufacturing Canada.

Waterloo-based cybersecurity company eSentire turned the tables on a cybercrime operation called Gootloader. “By leveraging the Gootloader threat actor’s own criteria for delivering payloads, we were able to block thousands of IPs from receiving the Gootloader payload, significantly reducing the potential victim pool,” said Joe Stewart, who holds the post of Distinguished eSentire Security Researcher. “It was a unique approach that helped us disrupt the Gootloader operation and protect innocent users from falling prey to this dangerous malware.”

While many investors were keeping their purse strings tight, veteran VC and Communitech board member Janet Bannister saw an opportunity. She launched a new CDN$22-million fund that’s focused on founder development.

Finally, with tech layoffs still a concern, Communitech organized a Career Connect day to assist tech workers who lost their jobs in the ongoing slowdown. Partners included TD, Conestoga Entrepreneurship Collective, Conestoga Career Centre and Adecco, 

May

Guelph-based Friendlier landed $2.3 million in venture capital to help grow its “re-use” services, which aim to reduce single-use packaging by providing reusable plastic containers to the food industry. Friendlier was founded in 2019 by University of Waterloo grads Kayli Dale and Jacquie Hutchings. The duo participated in Communitech’s Fierce Founders program and were named to Forbes magazine’s 2023 30 Under 30 listing for social impact.

SkyWatch Space Applications landed a CDN$1.2-million contract with the Canadian Space Agency, opening up a new market for the Kitchener-based company. The contract leveraged SkyWatch’s data-management expertise to create new AI-supported software to help the space agency manage the vast amounts of images and data it gathers from numerous satellites.

Meanwhile, Pfizer Canada began working with Communitech on a call for solutions to five health-care challenges. The partnership coincided with the launch of Pfizer Canada’s Healthcare Hub, which aims to help Canadian tech companies scale up health solutions, with the goal of enhancing outcomes and the patient experience.

U.S.-based outsourcing company PartnerHero acquired Waterloo-based Summatti, which makes an AI-powered conversational analytics platform for customer-experience teams.

In Cambridge, hometown telecom Fibernetics launched a new unified communications platform that promises real-time language translation.The new system – called Nucleus – was being offered free to Canadian businesses.

June

Waterloo-based Profound Impact closed its first round of financing with over CDN$2.2 million in seed funding – most of it coming from women investors, including many first-time women angel investors. Founded by Sherry Shannon-Vanstone, Profound Impact helps academic and industry researchers quickly find the right funding for their projects.

Serial entrepreneur Jeremy Hedges launched a new Kitchener-based startup to help students learn about climate change through educational technology kits. Forward Education produces “climate action kits” that enable students to build prototypes of actual technology solutions being used today to address challenges to the environment.

The Waterloo Region Entrepreneur Hall of Fame honoured six new members, all from the tech community. The latest inductees included serial entrepreneur Joseph Fung and the five co-founders of Sandvine Inc. – Marc Morin, Brad Siim, Tom Donnelly, Dave Caputo and Don Bowman.

Startup Genome’s Global Startup Ecosystem Report declared that the Waterloo-Toronto corridor is the largest innovation hub in Canada and one of the biggest in North America.

With the COVID-19 pandemic in the rear-view mirror, Communitech ramped up activities in the Hub. One of our most popular offerings – our networking and speaker breakfasts – returned with a sell-out crowd. More than 80 members of the Waterloo Region tech community turned out for a hot brekkie, some great networking and a chance to hear from two stellar founders – ApplyBoard’s Martin Basiri, who unveiled his new startup (Passage), and Friendlier’s Kayli Dale.

July

Waterloo Region jumped six spots to No. 18 on CBRE’s ranking of the top 50 North American tech markets. The number of tech workers in the region rose to 29,700 in 2022, up 52 per cent – or 10,100 jobs – over five years.

Earlier in July, a tech-worker migration report released by the Technology Councils of North America and Canada’s Tech Network found that between April 2022 and March 2023, 32,115 new workers moved to Canada. The communities that attracted the most were Mississauga, Montreal and Waterloo Region.

Waterloo-based RideCo announced a partnership with Uber to help public-transit operators offer more on-demand transportation options, address staffing challenges and augment fleet vehicles.

Meanwhile, MIMOSA Diagnostics – a graduate of Communitech’s Fierce Founders Intensive Track program – announced a financing round that it said will help the medtech startup expand into the U.S. market.

Waterloo-based online-training provider Axonify extended its partnership with Grand River Hospital to provide the ongoing training of frontline employees.

And Waterloo-based micro-LED maker VueReal said it would be putting more focus on the electric-vehicle market after contributing to the Project Arrow smart-car project.

Looking nationally, the federal government announced the first eight Canadian tech companies to receive support through Ottawa’s Global Hypergrowth Project, a new service to help scaling companies “go further, faster.” Three of the eight companies – Ada, AlayaCare and Clio – were previously named to Communitech’s Team True North, an initiative to support and celebrate high-performing Canadian tech firms.

August

Investment in Canadian tech surged in the second quarter with CDN$2.8 billion invested across 170 deals – the second largest Q2 dollar-wise on record, according to a report from the Canadian Venture Capital and Private Equity Association. The dollar total represented an increase of 140 per cent over Q1, and 45 per cent over Q2 of last year. 

Kitchener-based Vambora took some big strides in its quest to innovate traditional credit check systems. The company creates “trust profiles” that help international students and immigrants establish credit histories with landlords and financial institutions in Canada.

The Communitech Outposts program – an employer-of-record service – partnered with MaRS Discovery and the Toronto Board of Trade to deliver the Global Growth Series, a four-part panel series which helped founders learn about hiring talent in foreign markets and expanding sales teams internationally.

Started by founders for founders, Communitech has always been an active member of the Waterloo Region community. In that spirit, our IT team once again donated a number of surplus laptops to two student-focused programs in the region.

September

More big news on the acquisition front – U.S. industrial giant Rockwell Automation acquired Kitchener-based Clearpath Robotics and its fast-growing affiliate, OTTO Motors.

Clearpath was founded in 2009 by four University of Waterloo engineering students, originally for the purpose of using robots to “clear a path” through minefields. In 2015, Clearpath created OTTO Motors to focus on building autonomous mobile robots (AMRs) for moving material around manufacturing and warehouse settings.

In other news, Kitchener-based D2L (TSX:DTOL) made a push into the corporate-learning market with the unveiling of a new platform that offers one-stop shopping for businesses looking to upgrade the skills of their employees. CEO and founder John Baker started the learning-tech company in 1999 while he was still a systems design engineering student at UW. Today, D2L boasts 1,240 customers in 40 countries. 

In mid-September, the Communitech-led Fast Track Health collaborative held a showcase event that featured 10 Canadian tech companies pitching their solutions to a set of health-care challenges, which were identified by partners in the health-care sector. The event drew more than 90 attendees and highlighted the potential of data and technology to revolutionize health care.

Later in the month, the Fast Track Cities collaborative launched a call for solutions, inviting Canadian tech companies to propose solutions to a set of transportation and supply chain challenges that have far-reaching implications for cities, communities and the economy.

Meanwhile, Waterloo Region was well-represented at the recent Elevate Festival in Toronto. Communitech Chief Strategy Officer Joel Semeniuk spoke on a panel that urged founders to leverage the resources available in tech ecosystems. He also did an interview with the Canadian Press about AI regulation, which ran in the Globe and Mail and elsewhere. Other Waterloo Region tech leaders who spoke on panels at Elevate included Meti Basiri, co-founder and CEO of Applyboard; Kurtis McBride, CEO of Miovision; Ali Asaria, founder and CEO of Tulip; and venture capitalist and Communitech board member Janet Bannister.

October

October was a good month for investment in Waterloo Region tech.

Kitchener-based FluidAI Medical announced a US$15-million Series A raise. The medtech scale-up, which uses artificial intelligence and nanotechnology to monitor a patient’s post-operative condition, said it will use the cash to enhance its medical-record integration, fuel international expansion, hire additional employees and develop new solutions to assist medical professionals with post-operative patient care.

Miovision also had some welcome funding news. The Kitchener-based maker of traffic-management technology closed a CDN$36-million add-on to a CDN$260-million raise announced earlier this year. The combined CDN$296 million will help Miovision continue to grow organically and perhaps through acquisitions, CEO and co-founder Kurtis McBride told Tech News.

In other investment news, BDC announced an additional $50-million injection into its Seed Venture Fund, which provides much-needed support for emerging Canadian startups. The fund will focus primarily on promising pre-seed and seed-stage software companies within enterprise SaaS and other software verticals, including Digital Health and FinTech, that are using AI in their products and services.

Waterloo Region’s thriving medtech scene got a healthy boost in October with the official opening of McMaster University’s innovation centre in the Communitech Hub. Dubbed ‘MACcelrate,’ the centre will strengthen the university’s existing collaborations with Waterloo Region’s growing medtech community. Those ties involve McMaster’s expertise in health sciences and clinical trials, and Waterloo Region’s proven strength in commercialization. 

Pfizer Canada announced the first three winners of its inaugural health-care innovation accelerator program, which was created in partnership with Communitech. The three companies – CANImmunize of Ottawa, PharmaGuide of Richmond Hill and Wave View Imaging of Calgary – were chosen through a competitive process and will share $1.4 million.

The Communitech Hub was filled with plenty of Gemütlichkeit on Oct. 12 as the tech community came together for an Oktoberfest-style day of learning, networking and celebrating. The Techtoberfest event attracted more than 500 founders, investors and partners from the local ecosystem, the Waterloo-Toronto corridor and farther afield for a variety of workshops, panel discussions, peer-to-peer talks and socializing.

November

Kitchener-based cybersecurity startup Cavelo announced a raise of CDN$5 million in venture capital. The raise was led by Canadian VC firm Inovia Capital with participation from existing investors. It follows a pre-seed raise of CDN$1.3 million back when the startup launched in early 2021.

Communitech and partners Invest Ottawa and North Forge hosted a virtual event to launch ElevateIP services in Ontario, Manitoba and Saskatchewan. Communitech was awarded $38 million in federal funds in late 2022 to help deliver ElevateIP, a federally funded program that helps startups protect and leverage their intellectual property.

Multimodal trip-planning startup RideShark swam away with $25,000 in prize money at a Communitech-led Fast Track Cities Showcase. The event featured five Canadian technology companies presenting solutions to a set of transportation and supply chain challenges that have far-reaching implications for cities, communities and the economy.

Communitech brought Whistler-based entrepreneur and leadership coach Shannon Susko to Kitchener for a breakfast event and workshop with founders. The author and athlete shared the core elements of her “metronomics” and 3HAG approach to growing a company. Both involve setting a clear three-year strategy and a commitment to building an “A player” leadership team that’s aligned and dedicated to success, Susko said.

December

Cleantech startup and Fierce Founders grad Friendlier closed a $5-million seed extension, an extension of an earlier $2.5-million seed funding round. Guelph-based Friendlier was started in 2019 by University of Waterloo grads Kayli Dale and Jacquie Hutchings. 

Tali AI closed a round of financing that will help it ease the paperwork load of doctors and clinicians. The startup’s technology transcribes and synthesizes doctor-patient conversations, capturing elements like the patient’s story, physical examination details, doctor’s assessment and treatment plans. This information is integrated into the electronic medical record software, streamlining the documentation process for both doctors and patients. 

Kitchener startup GeoMate continues to navigate the digital-mapping space for mobile technology, according to a profile story in Tech News. The company was launched in 2019 by remote-sensing and geomatic experts Nastaran Saberi and Amin Gharebaghi. GeoMate creates maps that are designed to meet the demands of the smart mobility industry, catering to applications such as autonomous vehicles, delivery robots, autonomous shuttles and sidewalk robots.

Communitech President and CEO Chris Albinson showcased the Canadian and Waterloo Region tech ecosystems to an international audience through an hour-long video interview with the Global Innovation Management Institute (GIMI). The focus was on Canada’s role as a global innovation leader and how we’re using a combination of AI, immigration and trust to solidify and promote our reputation as the best place in the world to work in tech. 

It was a lively month in the Hub. Communitech’s Outpost team, which provides a employer-of-record service to help founders hire talent in foreign markets, teamed up with the Toronto Region Board of Trade to offer a well-attended Executive Certificate workshop on international sales and trade. As well, Communitech partnered with the Greater Kitchener-Waterloo Chamber of Commerce to hold a cybersecurity workshop for founders in the Hub.

That’s a wrap for 2023. All the best for the coming year!

This edition of the Roundup compiled by Alex Kinsella and Kevin Crowley. Sign up to receive the Roundup each month by visiting communitech.ca/technews and scrolling to the bottom of the page.

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