London’s tech industry is growing up, writes David Ciccarelli, with a
number of firms now tackling the scale-up challenge
CANADA’S TECHNOLOGY SECTOR covers such a broad cross section it’s hard to know what is tech and what isn’t. This issue of sector identification is exacerbated because all industries are enabled by hardware and software that provide conveniences in modern society
Policy makers and those actively involved in government recognize the issue, and while it may seem like there’s overlapping supports within the city, each serve a different purpose for each stage of a company’s lifecycle.
What is known is that London is emerging as a hub for digital media.
Case in point: 10 of the 2017 Profit 500 list of the fastest growing companies in Canada are headquartered here in London. As well, Deloitte’s Fast 50, now in its 20th year identifying and ranking the nation’s fastest growing companies, recognized five of those London tech companies in their recent list: Big Blue Bubble (30th), Arcane (38th), Voices.com (40th) and Big Viking Games (47th) and Diply (1) at the top of the list.
Beyond the winners is a cadre of local tech companies that have achieved significant scale already. Autodata Solutions and CarProof, both technology companies in the automobile data business, as well as Info-Tech Research Group, which provides content and advice for IT managers looking for guidance, come to mind. In addition, Race Roster, Northern and others are quickly rising up and making their mark.
Although Canada has been characterized as having a start-up problem, I can attest to the fact that the tech start-up community in Canada is strong. Start-up is simply a shorthand way of describing a small business that hatched from an idea, is in search of a business model and operates in conditions that could be best described as uncertain. A 2016 Brookfield Institute report states that Canada is home to 71,000 tech companies, and many of these would fall under that start-up definition.
The challenge for our economy is scaling up these companies, with the three primary pillars being access to capital, access to talent and access to customers.
Access to Capital
The common belief that it is nearly impossible for entrepreneurs to raise sufficient capital to run and grow their business is simply false. While this may have been the case in years past, the current landscape makes it very favourable for U.S.-based investors to cross the border and make investments in Canadian tech companies.
As a participant in the Canadian Technology Accelerator in Silicon Valley a few years ago, I had the opportunity to pitch our company to top-tier venture capital firms more than a dozen times. Our business was of interest to several investors, however the crux of the matter was our unwillingness to relocate to San Francisco or Silicon Valley. I returned to London with the conclusion that The Valley only invests in its own backyard.
Fast forward a handful of years, and our experience was dramatically different.
After completing our five-year strategic plan, we set out to find investors who would not only provide financial backing, but also the strategic advice required in order to be successful over the long term. Sure, we travelled the continent on a fundraising roadshow, but the reception was much warmer. There was a palpable sentiment that geography didn’t matter. What mattered most was that we were addressing a large market, we had a good team and a plan for how we’d deploy the invested capital. The result was an USD$18-million investment from Morgan Stanley Expansion Capital in San Francisco.
Access to Talent
London also benefits from three world-class educational institutions: Ivey Business School, Western University and Fanshawe College.
Ivey offers a unique opportunity for businesses to engage students through an Ivey Consulting Project. These projects range from market analysis and competitive intelligence to big data analysis. Western graduates are recognized for their academic intelligence and are, in turn, available for first movers who engage the university’s internship programs. Likewise, Fanshawe offers internships across a variety of disciplines. There is even financial assistance for businesses looking for interns or even to hire a new grad.
Should London companies need to hire from beyond the local talent pool, services like CityMatch act as a concierge and help guide new residents into the fabric of our community.
While competition for top science and engineering staff exists, people with expertise in these areas is growing in London. The challenge going forward is retaining them.
Access to Customers
Gaining access to the world’s largest market, the United States, is a mere hours away. Flying to the U.S. to meet customers is easily done, and fast-pass options like the NEXUS card, which can be obtained for trusted travellers, makes visiting for business even more convenient.
For start-ups, there are a variety of programs for emerging companies to taste the market, test and finally win customers. For instance, 48Hrs in the Valley is an excellent program for technology-based companies to learn about Silicon Valley, refine their pitch and even visit venture capital firms on the famous Sand Hill Road, where it’s been said that roughly half the world’s venture capital resides.
Longer stays in the U.S. are accessible through the Canadian Technology Accelerator, a five-month engagement offering programming, training, introductions and direct access into the businesses that so many of us look up to and admire.
Leveraging Our Current Resources
Canada, Southwestern Ontario and specifically London have all the resources needed to produce companies that can start, grow and succeed. Making the transition from a start-up to what is now being referred to as scale-ups (established businesses making the transition from their first million in sales on a trajectory to $100 million in sales) is our current challenge.
I’m confident that the companies listed here—and others to follow—have the support needed to gain access to capital, access to talent and access to customers.
David Ciccarelli is founder and chief
executive officer at Voices.com