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 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.”
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.
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.
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.
The Start Alberta platform is stewarded by the Venture Capital Association of Alberta (VCAA) and Platform Calgary, with the mandate to connect investors to a diverse pool of startups, fostering connections that otherwise could not be made.
About Alberta Enterprise Corporation:
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.