Welcome to the City of Champions
Edmonton is quietly becoming one of North America’s hottest and most intriguing technology and innovation hubs. The city is now home to more than 900 technology companies and nearly 35,000 technology professionals. The CBRE also ranked Edmonton as the continent’s fastest growing technology sector, having doubled the number of businesses since 2018 and added more than 12,000 technology-focused jobs since 2015.
While those numbers are certainly impressive, perhaps even more striking is the amount of investment local entrepreneurs are bringing to the city. In 2020, Edmonton start-ups closed 39 deals valued at a total $168 million — a sixfold increase over 2019 despite COVID-19 and its cooling effect on the global economy. Investment seems poised to continue through 2021 as well, with a staggering $78.5 million closed over five deals in January alone, which is only marginally less than the collective $83 million between 2018 and 2019.
What Edmonton lacks in name recognition compared to Silicon Valley, Boston, or Toronto, it more than makes up in community, intellectual firepower, and growth potential. The local start-up community is active and thriving. And it’s not just founders who are paving the way forward. The city is also home to a wide range of educators, mentors, incubators, and investment funds who are providing valuable insight, capital, and confidence the ecosystem needs to thrive.
There’s reason for its participants to feel optimistic about the future, too: Several homegrown entrepreneurs have already demonstrated it’s possible to build, grow, and successfully exit disruptive and globally successful businesses in Edmonton. The University of Alberta’s computer science and AI research programs are two of the top-ranked in the world. This brings significant clout, diverse perspectives, and streams of much needed talent into the local innovation ecosystem.
Also worthy of note is Edmonton’s decidedly lower cost of living and cost of doing business compared to other hotbeds of innovation in Canada and around North America. Cheaper housing, lower taxes, and reduced business overhead doesn’t just help entrepreneurs stretch their dollars further, it’s also an attractive lure for high demand talent that will be increasingly vital in the decades to come.
What sets Edmonton apart?
Certainly, it seems the dollars, people, and key infrastructure are in place to keep Edmonton growing into a national and global innovation powerhouse. But these numbers hardly scratch the surface. Business may be about numbers, but innovation is about people and ideas. No story would be complete without also hearing what’s happening on the ground and getting the insights and perspectives of those who are living innovation and entrepreneurship in Edmonton every day.
What sets the community apart? What are the barriers to reaching its full potential? What will be the keys to Edmonton’s success in the years ahead?
MNP reached out to four thought leaders currently immersed in the local technology and start-up scene for answers to these questions and more. What follows is a candid look at the social, economic, and institutional drivers of innovation and entrepreneurship in Edmonton and what they think the city needs to reach its potential in the years ahead.
Panelists
Kristina Milke, Managing Partner, Sprout.vc
Kristina Milke is an Edmonton-based business owner, investor, fund manager, and mentor. Her diverse professional background includes roles at a domestic aerospace firm, fintech giant Intuit Canada, and Edmonton-founded investment education website Investopedia where she served for several years as CEO. She was also co-founder of Valhalla Private Capital — a venture fund aimed at simplifying access to entrepreneurial financing.
Today, Kristina is the founder and Managing Partner at Sprout.vc, a unique venture capital fund geared at helping traditional investors deploy their capital in the unique and often challenging technology space. With its first round fully deployed, Spout is now raising its second round which will focus on financing seed-stage western Canadian start-ups in the business-to-business software as a service (B2B SaaS) sector.
Kristina is also a founding mentor and current board chair at ThresholdImpact University of Alberta Venture Mentoring Service (VMS). The program mentors more than 100 University of Alberta Alumni through the process and starting and operating a business.
James Kierstead, President, Levven Electronics
James Kierstead is an Edmonton-based innovator and serial entrepreneur, perhaps best known as a founder and former owner of Blue Falls Manufacturing. Its subsidiary Arctic Spas is a leader in the hot tub and swim spa market and currently operates in more than 30 countries around the world. However, that may be soon to change with his star rising rapidly as a disruptor across the internet of things, smart home, and building construction sectors.
James’ latest brand, Levven Electronics, is a global leader in wireless and internet-connected construction technologies. Their products include high-quality, fully integrated, and user-friendly wireless light switches, audio equipment, and control modules. These devices are reducing waste, lowering costs, and rapidly transforming how buildings are built and operate.
James is also highly active in Edmonton’s technology and innovation community. He is a member of several innovation-focused discussion and collaboration groups and lends his years of experience and expertise to founders hoping to get their ideas off the ground.
Amir Reshef, Co-Founder and CEO, dealcloser, inc.
Amir Reshef is an Edmonton-based entrepreneur, innovator, and former corporate lawyer with a large multi-national firm. He co-founded dealcloser, a game-changing legal technology platform, in 2017 to alleviate the tedious administrative burden on corporate lawyers.
Amir and his co-founder have gained international acclaim for their application and its potential to eliminate many non-value-added tasks, streamline the business transaction process, and save time and money for firms and their clients. Dealcloser is currently in use at dozens of law firms around the world and recently secured $1.75 million in seed round financing.
Amir is a passionate supporter of the Edmonton start-up community. He is keen to pay forward the significant support and mentorship he received as an early stage entrepreneur — and is active in many Edmonton-based start-up communities, helping other local entrepreneurs get their businesses off the ground.
Ashlyn Bernier, Chief Operating Officer, samdesk
Ashlyn Bernier is an Edmonton-based community leader, educator, and technology executive. She is currently Chief Operating Officer at samdesk — a fast-growing AI and big data-powered global disruption and monitoring platform — and serves as a director with Innovate Edmonton.
Ashlyn holds a Ph.D. in lab medicine and pathology and a master’s degree in technology commercialization. Having switched her career focus from academia to start-up innovation, this unique background has nonetheless been an invaluable gateway to a variety of operational and leadership roles. She previously led operations at Halifax-based sports genetics start-up and was the inaugural manager of the ThresholdImpact University of Alberta Venture Mentoring Service (VMS).
Ashlyn’s relationships throughout the Canadian start-up and innovation sector are unparalleled. In particular, her position at VMS has helped her connect with both the leaders and grassroots upstarts in the Edmonton technology and innovation sector, where she continues to provide guidance, support, and insight to help the community thrive.
What’s happening in the Edmonton technology and innovation sector? How would you describe our community right now?
KM: There have been some great successes locally, and with that has come more supports for early-stage founders to start a company.
Albertans in general have a lot of grit and a strong entrepreneurial spirit, and we’re starting to see a lot of folks coming out of post-secondary who want to go straight into entrepreneurship. They’re not interested in working for someone else. That requires courage — but it also requires a unique skillset.
It takes a village to raise a start-up. We need more founders coming back into the system as coaches and mentors to continue the growth and momentum in Edmonton and across Alberta.
JK: It’s incredible how many NGOs and small incubator-style support groups exist in Edmonton to help entrepreneurs grow their ideas. Everyone is welcome to take part in our community. The diversity we’re seeing as result has really highlighted the role of innovation in every business and across all sectors of the economy.
I think some of the major successes we’ve seen emerge from Edmonton in recent years has given smaller star-ups the confidence to put their ideas out there. It’s made it easier for entrepreneurs to access capital and facilitated many exits.
The more exits we see, the more decentralized our community is becoming. Entrepreneurs are now coming back as mentors and investors, which makes it possible for more entrepreneurs to try, and increases the likelihood more of them will succeed.
AR: I think people would be surprised to see how much start-up output comes from Edmonton. We have a world-renowned university which has produced some intriguing spinoff businesses in the fields of AI, life sciences, and resource sciences. We’ve also had some major success stories which people may not realize started in Edmonton — but have undoubtedly inspired other local founders and made it possible for raise capital and ultimately create jobs in the city.
Our community is extremely grassroots. Every founder I know in Edmonton is willing to talk to anyone who wants advice. I benefitted from that myself when I was starting out. There’s just an outstanding mentality of giving back because everyone got help from somewhere when they were starting out. There are a lot of genuine and earnest people in our community who want to see people, companies, and the city succeed.
AB: The innovation community in Edmonton has been going through a cycle of fits and starts over the past 10 to 15 years. It’s hard to get a sense of why that happens, but a lot of it comes down to having the right supports and resources in the community.
We’re in a bit of a surge right now, so the challenge is how to keep that moving. It can be extremely difficult to regain that momentum when things cool down. The way our community has weathered the pandemic is encouraging, though. The glue has held together, and things are really starting to build.
What does the community need to keep driving forward? How do we keep the momentum moving forward?
KM: I would love to see some Alberta Investor Tax Credits reinstated. The idea that it only helps the rich is false. All else being equal, if I’m a B.C. investor that gets a 30 percent tax credit to invest in my province, that’s where I’m most likely to put my money. This puts Alberta companies at a disadvantage when they’re trying to raise capital from an out of province investor.
We also need to make sure we’re not de-funding our post-secondary institutions so much that we can’t create enough talent locally. It’s only going to get more competitive to hire and retain talent as people are increasingly able to work for anyone, from anywhere in the world. The more we can focus on and nurture homegrown talent, the better.
We also need to do a better job to shout out and celebrate our success stories. That hype is what is going to show people what’s possible and keep them pushing forward.
JK: I’d like to see the Alberta and Canadian government make it easier to fast-track immigration for people in the technology industry. Talent is always going to be a limiting factor, and it’s already a challenge we frequently run up against.
We also need to play to our strengths. In a similar vein, the University of Alberta has a world-class machine learning program that churns out exceptional computer science talent. We need to create programs that funnel students into local small businesses rather than losing their valuable skills and knowledge to other innovation hubs.
Another positive step would be more programs to move start-ups from the ideation phase to an investment ready business. Entrepreneurs need support to scale up which largely doesn’t exist right now. Yet our history has shown what that can do to drive innovation in our ecosystem.
AR: On a basic level, what we really need is more start-ups. The success rates being what they are, the longevity of our community depends on more people taking the chance on developing a minimum viable product and seeing what kind of traction they can build. Maybe a small grant to help incorporate or build a proof of concept could help. Whatever we can do to encourage more start-ups is a good thing, because it’s ultimately a numbers game.
We also need to become a culture that celebrates failure. There’s a big stigma around failure which is unfortunately misplaced. Nobody wants to fail, of course, but people who fail make for incredible entrepreneurs. There have been a few companies in our community I really admired which failed publicly. The entrepreneurs disappeared and we lost a lot of valuable knowledge and experience as a result.
We need more start-ups and less stigma, so people are willing to take risks.
AB: Investing taxpayer dollars in accelerators, investment capital, and talent will only deliver a worthwhile return if there’s a thriving and supportive community to build from.
You can think of our community as the soil that grows businesses: There’s no point in planting anything if the soil isn’t fertile. Grassroots initiatives and sweat equity can only take the ecosystem to a certain point. It also needs the support of partners, service providers, and arm’s length government agencies to feed the soil and help start-ups grow.
Another way to look at things is from the perspective of a funnel. The only way to get big companies is to start out with smaller ones. Pouring investment and sponsorships into the top of the funnel ensures a constant stream of support and resources are available for entrepreneurs who need it, which ultimately encourages more people to join the community.
The problem, of course, is community is extremely difficult to measure. It takes time to see the return on investment. So, beyond financing and mentorship, we also need partners and leaders to advocate for the time and money, and other resources we’re putting into innovation and entrepreneurship in Edmonton.
What do you see as the future of the Edmonton innovation community? What are you most excited about?
KM: First, we need to define what we mean by “this sector,” or “the innovation community.” Every business has a technology component these days. No industry has a monopoly on innovation. We throw the word diversify around all the time, but diversification is imperative. The only way we can encourage growth is by growing and investing in multiple sectors.
Any place can build any kind of technology company. If we want to create high amounts of knowledge-based jobs in Alberta, we need to support them. We need experience and expertise around, and we need to create momentum. We can’t afford to take our foot off the pedal.
JK: The interesting thing about Edmonton is it’s always had a broad range of skillsets: manufacturing, distribution, construction, development, etc. We’re finally starting to realize that technology isn’t another item on that list — every business is a technology business. As our definition of innovation continues to catch up, we’re going to see our community become more inclusive and we’re going to see it accelerate.
Innovation isn’t just software and platform development. Everywhere in the world is trying to develop software and platforms. We need to play to our strengths. The oil and gas and construction sectors need innovators too — nobody in the world knows how to weld tanks the size Alberta can.
Once you start ticking those things along, you begin to see a wide range of possibilities for us to keep moving forward in areas where we’re already strong.
AR: I think it’s also important to recognize we’re just beginning our journey. Edmonton has been trying different things. Our communities are experiments, just as start-ups are experiments. There is a lot of promise, but we’re still in the early days and our community is still very grassroots.
In the near term, I think we’re going to see some of our current successes continue to grow. Longer-term, Edmonton needs more giant companies. I hope to see more businesses cross the threshold into the scale-up phase — more seed rounds, more series A rounds.
We’re still figuring things out, but now I’d like to see some stronger direction as the community matures.
AB: We have great service providers, investment, and talent here in Edmonton. I’m excited to see some of the accelerators coming to town and the potential of some recent investments to stimulate our community.
The next challenge is to connect our community to the broader global innovation community. We need to import more people and connections who can help amplify our brand and build on our existing strengths. I think there is potential to link our local Edmonton network to other innovation hubs across North America and around the world.
Any additional thoughts, or ideas you’d like to share?
KM: I’d love to highlight the ThresholdImpact Venture Mentoring Service (VMS). We have more than a hundred mentors from various backgrounds and multiple companies come through the program. Some companies have been with us since inception, which speaks to the value of the relationship with their mentors — and the value mentors get from working with mentees.
It’s also worthwhile to point out that there are more angel investors and funds in Edmonton than ever. They’re playing a massive role in creating talent and wealth in our city and the province in general — and not just financial wealth, but educational wealth, better quality of life… the list goes on.
JK: There is a great story in Edmonton. We have this culmination of so many organizations feeding and bringing our community together, numerous businesses that have made an impact on a global scale, growing co-operation on a shared set of values. Owning that story and finding a way to communicate it on a national scale is vital to help people understand the options and opportunity here.
AR: Edmonton is an early-stage start-up with early stage traction, and it’s coming into its own. It has figured a lot of things out. It’s trying to figure out other things. But there are a lot of people invested in its success.
I don’t think there’s any doubt our community will be successful. We just need to be patient, keep hold of that community focused mindset, continue championing more start-ups, and more people and more ideas flowing into the pipeline.
AB: Based on my experience in other innovation hubs, I think Edmonton suffers from a slight case of little brother syndrome, which is preventing us from owning who we are and reaching our potential. It’s a huge waste of time and talent trying to be the next Toronto, Boston, or Silicon Valley.
We are the only Edmonton, and we need to get comfortable with who we are. We need to appreciate and nurture the potential in our ecosystem, and we need to be willing to stand up and shout about it.
Other cities will get attention and financing, we can’t do anything about that. Maybe we don’t always receive the recognition we deserve. But saying, “us too!” isn’t going to help our community stand out. Only confidence and a certainty in who we are can do that.
This story originally appeared on MNP. Find the original post here.
