The COVID-19 pandemic is an unprecedented event that has forced all businesses to re-evaluate their markets, risks, and priorities. In this time of volatility, predicting the future of venture capital is admittedly challenging. However, there are encouraging signs in the Alberta tech startup ecosystem that build on recent growth and successes in the province. Several startups are well-positioned to meet the current challenges head-on, while others are recalibrating to new metrics and constraints by pivoting to different models. We can find opportunities in crisis and see encouraging support through the establishment of new government programs and the emergence of new resources from all sides of Canadian tech. In this article, we turn our attention to the startups who are tenaciously striving toward new possibilities, as well as recognize some of the successes in Alberta over the past year.
Alberta Experiences Strong Start to 2020
Alberta Venture Capital investment in 2020 has kicked off to a rousing start with several notable financings, including Calgary-based Symend’s $73 million CAD ($52 million USD) Series B raise led by Inovia Capital’s Growth Fund. Symend is one of many Alberta companies scaling rapidly to serve those financially affected by the current situation through a customer engagement platform designed to better connect with financially at-risk customers.
Alberta Enterprise portfolio fund companies Showbie, SAM and Dryrun, have experienced exponential growth during the COVID-19 situation. The simplicity of the Showbie and Socrative (acquired by Showbie) applications have shined as countries and education systems switched to distance learning, literally overnight. These technologies have allowed teachers to carry on with their virtual classrooms and have enabled students to learn from home – with Showbie seeing 6x teacher signups and Socrative signups exploding to 125,000 teachers over a one-month period.
Meanwhile SAM, a global disruption monitoring platform leveraging artificial intelligence to analyze social media and deliver relevant news to users, is helping teams make informed decisions with increased speed and accuracy to keep people safe when it matters most. Today, SAM is helping some of the world’s largest sectors stay one step ahead of the pandemic with crisis alerts that notify of new and emerging developments, such as lockdowns, closures, evacuations, and unexpected risks related to COVID-19. Record usage during this time has spurred SAM to raise $3.6M CAD in new funding to fuel growth. SAM is an Accelerate FundI company.
The economic challenges of COVID-19 have made cash flow modelling more essential than ever to inform decisions on managing operating costs, hiring or layoffs, and funding new projects. With so many possible scenarios for lifting of social distancing and available government relief, businesses are mapping multiple models for the months ahead. Dryrun’s flexible and highly visual cashflow modelling software saw a 1,300% increase in signups in recent weeks, with new customers coming from 31 different countries and across 70 different currencies!
Further encouraging investment news is Alberta Enterprise’s launch of a third early-stage angel co-investment fund, Accelerate Fund III, with a $10 million investment. Accelerate Fund III will provide Alberta technology entrepreneurs with a continued source of startup capital. Fund III will be managed by Yaletown Partners with the support of The A100, the same investment team that oversaw Fund II. “We are excited to announce Accelerate Fund III, especially at such a moment of economic and global health uncertainty,” commented Kristina Williams, CEO of Alberta Enterprise Corporation. “The fund is a great early-stage capital resource for the rapidly-growing Alberta tech sector. With this latest deployment of capital, we invite early stage tech companies to stay and grow here, and to expand Alberta’s technology jobs and innovation.”
Alberta Reports Best Year on Record by 40%
After years of building a solid foundation, Alberta’s tech ecosystem is gathering meaningful momentum. 2019 was a record-breaking year for the province of Alberta, which posted a 10-year high of VC startup investment activity, with a total annual volume of $227 million spread across 39 deals. This was a 40% increase over the next closest year on record ($162 million in 2013) according to theCanadian Venture Capital Association (CVCA) 2019 Venture Capital Overview Report.
CVCA Venture Capital Overview Report 2019
Average deal size in Alberta was $5.8M, higher than the Canadian average of $5.6M when mega-deals were excluded (with Alberta average deal size increasing by 61% over last year’s $3.6M).
Alberta Enterprise portfolio funds Inovia Capital and Panache Ventures were again identified among the most active funds in Canada in 2019 based on number of deals.
PwC MoneyTree Canada Report 2019
PwC/CB Insights MoneyTree Canada 2019 reported Calgary startups raised $117 million USD ($157 million CDN) in H2 2019, driven by both larger deal size and an increase in deal activity (which doubled!).
Unsurprisingly, the report found that early and seed-stage deals made up 50% of Calgary funding in H2 2019.
Highest Growth Rate: Total Deal Volume & Number of Deals
Alberta also saw the highest 3-year average growth rate of total VC deal volume in Canada at 84%, when compared with the leading provinces of BC (71%), Ontario (18%) and Quebec (20%), even when mega-deals are included. In addition, Alberta had the highest growth rate for total number of deals, both in 2019 and across a 3-year average, across all Canadian provinces! (St. Johns Newfoundland-based startup Verafin’s $515M raise from September was excluded, as this deal was primarily private equity.)
For the first time ever, Calgary was included as a top 5 city for Canadian VC in 2019, being ranked fourth for total deal volume both in the CVCA 2019 Venture Capital Overview and PwC MoneyTree Reports for the full year 2019. This growth of both total deal volume and number of deals is a clear indication that Alberta’s early stage tech ecosystem is demonstrating maturation.
Notable 2019 Alberta Investment Deals
Ambyint, Calgary/Houston – Provides step-change improvements to oil & gas production volumes and operating expenses with production optimization technology spanning all well types and artificial lift systems. Ambyint utilizes a combination of advanced physics, subject matter expertise, and artificial intelligence to enable full-field visibility, control, and optimization of wells. With deployments in all major North American basins, the company announced a $15 million USD ($19.9 million CDN) Series B funding round on February 4, 2020 led by Cottonwood Venture Partners with participation from Mercury Fund and Ambyint’s management team. Ambyint is a Builders VC investment. Builders VC is an Alberta Enterprise portfolio fund.
Communo, Calgary – Operator of North America’s fastest growing talent platform & community- intended to help advertising and digital agencies source talent based on a host of compatibility factors. Communo’s app-based marketplace provides small & large agency owners access to tens of thousands of vetted creative professionals, tens of millions of dollars of project-based work, and valuable training and professional development resources to help firms grow more profitably. In December 2019, Communo secured over $3.3 million in seed funding, bringing their total raised to $4.3M, including investment from notable investors Andrew Kortina – founder of Venmo, CEO of Complex Rich Antoniello, W. Brett Wilson, Kevin Weatherman, Frank Palmer, and ICM Asset Management (Alberta). Communo is a Panache Ventures investment. Panache Ventures is an Alberta Enterprise portfolio fund.
Decisive Farming, Irricana – An integrated digital farm management platform solution that connects farmers, farm service and technology providers in one collaborative software platform. The platform acts as the farmer’s primary operating system. It supports everything from planning & budgeting, variable rate fertilizer & seeding, agronomic soil testing, field & inventory management, weather, sensors and crop marketing. Decisive Farming is committed to increasing farmer profitability, sustainability and technology ease-of-use. The platform currently has over six million acres, being used on 40 different crop types in North America and the firm has strategic partnerships with leading distributors across the agriculture value chain. The company was acquired for an undisclosed amount by TELUS on December 12, 2019. Decisive Farming is a McRock Capital and Accelerate Fund I (AFI) investment, both Alberta Enterprise funds.
Ingu Solutions, Calgary – Developer of miniaturized mobile sensors intended to provide oil and gas companies immediate and affordable access to pipeline assets. The company’s inline sensors detect leaks, geometric defects and deposits that threaten pipeline performance and safety with zero-downtime, enabling companies to eliminate human intervention, reduce inspection costs, strengthen preventive maintenance and lower repair and replacement expenditures. Ingu Solutions secured an undisclosed amount of growth capital from Energy Innovation Capital, Chevron Technology Ventures, Bluesky Equities and other investors November 5, 2019.
Osperity (formerly Osprey), Calgary – Developer of a cloud-based platform designed to offer intelligent visual monitoring services. The company’s platform detects important operational events, analyzes related images and video with advanced computer vision along with data from other sensors and systems, enabling organizations to remotely inspect facilities and equipment, monitor site activity, optimize labor productivity and ultimately increase and manage more assets with fewer people. The company secured a $6 million funding round from Evok Innovations, InterGen Capital, Shell Ventures and Texas Ventures, closing December 2019. Osperity is a Builders VC investment. Builders VC is an Alberta Enterprise portfolio fund.
ParkChamp, Calgary – Parking optimization software using intelligent software solutions that allows any property to offer secure public parking saving properties money and operation costs, secured undisclosed seed funding from Birchcliff Ventures Q4 2019.
Smart Access, Edmonton – Smart Access helps large retailers unlock operational efficiencies by empowering their frontline workers with the right information, at the right time, in the right place. On December 30, 2019, they secured $1.5 million CDN in seed funding from Accelerate Fund II, Panache Ventures, Sprout Fund, Birchcliff Partners, Bluesky Equities, and Hummer Winblad. Smart Access is anAccelerate Fund II and Panache Ventures investment. Both are Alberta Enterprise Portfolio Funds.
Veerum, Calgary – Developer of an industrial Internet of Things (IIoT) platform designed to increase capital project productivity. The company’s platform uses digital twin technology and artificial intelligence to create a virtual replica of a physical project or environment that can be used to simulate, operate, and analyze actual or planned operations, while also building a single source of project truth. Veerum secured $2.5 million USD in funding from Evok Innovations, Suncor, Cenovus, InterGen Capital, plus previous investors including Brick and Mortar Ventures, Blackhorn Ventures, Builders VC and Creative Ventures. Veerum is a Builders VC investment. Builders VC is an Alberta Enterprise Portfolio Fund.
Virtual Gurus, Calgary – Owner and operator of a virtual service company intended to offer a full range of administrative, receptionist, social media, bookkeeping, and web development services. The company raised $1.2 million CDN in seed funding from Calgary investment collective The51, Vancouver-based Raven Indigenous Capital Partners, and Ryan Lailey in February 2020.
ZeroKey, Calgary – Developer of VR technology product intended to revolutionize human interaction with machines. The company’s technology provides wide-area, continuous, real-time and ultra-high accuracy positioning within large spaces and buildings, enabling companies in the AR/VR, manufacturing, supply chain management and logistics industries to solve automation, process optimization, digitization and a wide array of other enterprise/industrial problems easily. ZeroKey secured $565,827 USD in convertible debt from undisclosed investors December 30, 2019.
How to Find Alberta Companies
Start Alberta is a free and open source dealflow directory that provides an ideal medium for international investors to connect with Alberta entrepreneurs and identify investment opportunities. A strategic partnership between Start Alberta and Crunchbase expands Alberta’s richest database for the startup community – giving Alberta entrepreneurs even greater exposure to national and international investors. Under this partnership, Start Alberta’s database is directly linked to Crunchbase – which reaches over 55 million investment professionals worldwide.
Alberta Enterprise Corporation promotes the development of Alberta’s venture capital industry by investing in venture capital funds that finance early-stage technology companies. We focus on funds that have a strong commitment to Alberta, including a full-time presence in the province. In addition to capital, we support Alberta’s venture capital ecosystem by connecting investors, entrepreneurs, and experienced technology executives who share our passion for building a bright, innovative Alberta.
Since our inception we have committed C$198 million for investment to sixteen VC funds and the Accelerate Funds I, II and III, covering a diverse range of forward-looking industries including information technology, industrial technology, and life sciences. Our funds and their partners have invested more than $550 million into Alberta technology companies.