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Quick Takes: Quantum proves the allure of possibilities

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Newsletter published on:
February 11, 2022
Quick Takes

What is the news?

This is a two for one based on two articles from the Globe & Mail:

  1. D-Wave plans on raising $340m USD by going public on the NYSE via a SPAC. $300m will be raised via the SPAC and $40m from a private placement from existing and new investors including PSP investments, NEC Corp, Goldman Sacs Asset Management, Yorkville Advisors and Aegis Group Partners
  2. IBM will build its first Canadian quantum computer by partnering with Quebec. The cost is $121m to build the system

What is Quantum computing?

Quantum computing is a new way to build computers. Instead of using binary bits (ones and zeros) - quantum computers leverages the understanding of quantum physics to use quibits that can be a mix of both one and zero to do the calculations.  The allure of Quantum computing is that it could hypothetically have exponentially more computing power than current computers.

Why does this matter?

If Quantum computers become more widely affordable, they can solve problems (and cause new ones) that we currently can’t tackle with current computers. This would represent a huge economic driver. For example The NRC of Canada estimates that the Canadian quantum market could be worth $142b by 2040.

Why is D-Wave SPAC-ing?

D-Wave is the perfect SPAC candidate because:

  • It's an interesting space for the public to invest in
  • Results are not good enough to raise private capital. The company was already re-capitalized before
  • It needs capital now

My guess is that it will perform like many other SPACed companies.

What about the IBM news?

Quebec is investing in its future and convinced IBM to make an investment it would not make otherwise. This is good for developing skills and industry in Quebec.

What are the takeaways for the community?

Many new technologies grow rapidly, attract investors, employees and high valuations due to the potential, but they never deliver on the potential. Until they do.

Quantum may or may not become mainstream one day, and if it does, it will unlock a lot of value. Until then, it will be the realm of large enterprises (e.g. IBM, Google), government and visionary startups. For employees, if you get lucky with your timing, you will make a fortune.

For Canada the investment makes sense.

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Alex's Must Reads: February 11, 2022

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Newsletter published on:
February 11, 2022
Must Reads
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More Notable Canadian News: February 11, 2022

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Newsletter published on:
February 11, 2022
Notable Canadian News
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Why Canadian Accelerators Need to Evolve, and Fast

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Newsletter published on:
February 10, 2022
Thought Pieces

Contributor Profile

Article By: Jonah Midanik, Managing Partner at Forum Ventures

In 2019, I joined Forum Ventures, an early-stage SaaS fund and accelerator based in San Francisco, New York, and Toronto, as Managing Partner. I was new to the Venture world, other than being on the other side of securing funding as a founder, and a few of my own angel investments. What I knew about accelerators came from my own time spent in Forum’s program back in 2016 when I was building my second tech startup Limelight, an Experience Economy marketing platform.

While I knew Forum Ventures through my time in their program, I needed to get to know the landscape of accelerators and incubators in Canada in order to talk to prospective founders about why we’re unique.


What I quickly realized was that in most cases, accelerators and incubators are a bad deal for founders. And since that time, the deal has likely gotten worse.

Before I unpack that potentially controversial statement, let’s take a step back and look at why accelerators started in the first place.

Y Combinator was launched in 2005 as the first accelerator in the world (funnily enough, they were also the first to move away from self identifying as an accelerator). YC started as a response to the lack of capital for early stage startups following the dotcom crash at the turn of the century. There also wasn’t a lot of information available back then for first time founders to launch a business, and in a highly SF-based tech club, startups across the rest of the US needed an in. YC gave them that.

Soon after, Techstars (2006), Plug and Play (2006) and Seedcamp (2007 in UK/Europe) followed, and since then, countless startup accelerators and incubators have been born with the global number reaching the thousands in 2021.

Today, traditional funds are offering more accelerator-like services and support than ever before as a way to differentiate themselves in an increasingly competitive market. In addition, large corporations are either launching or sponsoring accelerators, and many accelerators are launching multiple niche tracks, creating an even more crowded space.

The result: more capital and support available for early stage founders than ever before.

There is also an abundance of information about building a company available so founders no longer need accelerators for business education. And connections to investors – the other value accelerators used to provide – are easier to make regardless of where you live via Linkedin, social media, and online communities.  

All this to say, with much less of a need for what accelerators used to bring to the table (money, information, connections), and more services being offered across early stage funds, accelerators and incubators need to redefine their value in the 2022 market or founders will (and should) choose another route. Let’s dig into what that could look like.

Since accelerators/incubators often take a large percentage of equity from founders, they need to justify this by building shoulder to shoulder WITH founders, and not just running a program for them with one-off mentor advice.

There are a number of ways this shift in offering could look, but it should have some or all of the following elements:

  • The entire investment on day one, and enough money to get founders to their next stage. Founders:  No money = no equity. Period.

  • A single, dedicated resource who cares, who gets deep in your business with you, and who gets to know the real you – your cracks, vulnerabilities, and fears. Only then can they give you authentic advice about your business, and help you through the mental aspects of the journey (see next point).

  • Support for mastering the inner founder game. Starting a company is demanding, complex, and psychologically challenging. Peer support, honest feedback, and coaching are all needed here. The founder’s job is hard, and needs to be made easier.

  • Community entrance. Many first time founders haven’t been part of the tech ecosystem and might not know any other founders to go through the journey with. A good accelerator will have an engaged community of founders waiting to embrace you and provide the support you don’t even know you need yet.

  • True US investor access for Canadian founders, affording you a much larger sum of capital than is available in Canada.

As a founder, if you’re…

  • Not getting capital but giving up equity;

  • Don’t have an investment and operating team by your side who truly care about your success;

  • The accelerator/incubator to make a material impact on your business in the form of Outcomes, not Advice (i.e. new customers, traction);

  • Not successfully raising a decent size round because of a lack of investor connections and/or preparedness;

… you’re likely getting a bad deal.

So, with that being said, here are two categories that I believe accelerators/incubators are going to continue to be valuable in this year:

1. The “Big Boys” like Y Combinator

These accelerators have investor brand recognition (which can translate into future investment), huge communities given the hundreds of founders they invest in each year, and lots of money to go around.  What they don’t have: a close-knit community or 1:1 support (there are simply too many startups in each cohort) and therefore the inability to really get to know founders and their businesses, and in turn give advice that’s right for them as people.  Still a great fit for many.

2. The “Smaller Specialists”

These accelerators and incubators are smaller and therefore provide that 1:1 attention. The team can go deeper into your business and market and by spending more time with founders they can support on a whole other level. This type of support then trickles into fundraising, as investor introductions are made on a personalized basis, i.e. a good fit for your business. Communities are also closer, which only multiplies the support founders get. Their brands are not as well known, so if that’s what you’re after, the first category is a better fit for you.

Any incubators or accelerators that don’t fit into one of these two categories will probably struggle to provide founder value or generate meaningful return for their investment in the next few years.

There really is no reason in this current market for high performing founders to give away equity without an investment. Most founders don’t have time to sit in startup school – they need to be building their business, and they need to get support, guidance, and advice about THEIR business WHILE they build it. And community can make a material difference in founder mental health and is therefore a must have for accelerators.


Takeaways for Founders:

If you’re thinking about going through an accelerator, make sure you’re walking into a situation that’s going to materially push your business forward. For most, that means money, support, community, honesty, partnership, and U.S. connections.  That is what is going to continue to drive our Canadian entrepreneurs to make their mark on the world, as we continue to evolve into a world class ecosystem.

*Jonah is supporting Founders on their journey to building world class companies out of Canada - while still founding companies of his own.
Connect with Jonah on LinkedIn or follow him on Twitter to learn more.*

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Hiring Company of the Week: PhenoTips

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Newsletter published on:
February 9, 2022
Company Spotlight
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Each week, we feature an innovative company that's hiring. This week, we take a closer look at PhenoTips, a a Toronto-based medical genetics software startup.

How are you innovating?

PhenoTips is a Toronto-based medical genetics software startup hiring in Canada.

The company was founded out of a collaborative project between a Computer Science research group at the University of Toronto and a genetics laboratory at SickKids. During this project, researchers found they needed a software tool that did not yet exist, one that could record a patient’s phenotype, family history, and genetic data in structured and computer readable formats, all stored in one accessible database. Today, PhenoTips is led by COO Dr. Pawel Buczkowicz, whose approach is informed by his background in cancer genetics and Lean Six Sigma-informed workflow expertise, and CEO Dr. Orion Buske, who draws on his background in rare disease genetics and computer science.

Why you launched

At the inception of PhenoTips’ software and company, the mainstreaming of genetics was on the horizon, offering a future in which everyday medical care is personalized to an individual’s genome. With this accelerated use of genetic medicine comes a clear need for medical genetics software that can manage genetic data. Electronic Medical Records (EMRs) lack the family history management, interoperability, and data coding and sharing abilities essential for rare disease diagnosis as well as powering genomic medicine. PhenoTips’ flagship software was the perfect foundational structure on which to build a powerful medical genetics suite that could fill in the gaps left by EMRs to enable the mainstreaming of genetics.

2022 ambitions

In 2022, PhenoTips has ambitions to accelerate team growth by doubling the number of PhenoTips employees compared to 2021. This rapid growth will position the company to scale up PhenoTips technology to meet growing demand, and continue their expansion through health systems in Canada, the US, and the UK.

Company Culture

The PhenoTips team is united by common goals and a shared vision, one which focuses on creating impactful change to genetic medicine and bolstering high-quality, lifesaving, patient care. Employees hold equity stake in the company and enjoy flexible hours and remote/hybrid work options (dependent on current covid guidelines), as well as a strong focus on work-life balance. PhenoTips’ company culture is collaborative, tight-knit, and quirky with an emphasis on diversity and inclusion.

Key facts:

The PhenoTips team consists of 17 individuals with three open roles, two of which are in tech. The team is rapidly expanding as a result of the closure of a recent oversubscribed seed fundraise led by GreenSky Capital Inc. and the Toronto Innovation Acceleration Partners. PhenoTips software is used by genetics industry leaders including SickKids, the Children’s Hospital of Eastern Ontario (CHEO), the National Institutes of Health (NIH) Undiagnosed Diseases Program, and multiple NHS Trusts, including Cambridge University Hospitals.

You can learn more about PhenoTips and their opportunities here

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Company to Watch: Codex

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Newsletter published on:
February 7, 2022
Company Spotlight

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Every Monday, we profile a company to watch that's innovating in their industry.

Today we are profiling Codex - code collaboration that answers the burning technical questions in your codebase, right in your IDE!

What is Codex?

Codex instantly understand what's happening in your codebase and add 'the why' of code for better knowledge and context sharing between teams.

See how it works

What else can Codex help with?

Helps with onboarding customers faster

Codex can help new teammates understand their repositories faster and at scale—it's like multi-tenant pair programming. Allowing your staff and sr. engineers to focus on the mission critical, let Codex handle the rest.

Helps with requesting context from colleagues

Codex highlights a codeblock in your favorite IDE and request context, Codex will automatically find the teammates who worked on the code by running git blame for you and ask them your question. Once they respond you’ll be notified and it will be written to Codex —so all other teammates will benefit from the context.

What is the story behind Codex?

Codex founders, Karl Clement (COO), Saumil Patel (CTO), and Brandon Waselnuk (CEO), started the company as a side-project in a quest to add a context layer on top of a git repo to help onboard new engineers into a codebase. When they showed their prototype to friends in engineering leadership positions, all of them asked for an early build of the product. A month after its month, year Y Combinator funding, Codex began a private beta with 25 companies ranging from teams of 3 to hundreds.

Read the full article here

*information courtesy of usecodex.com

To learn more about Codex, visit their website here

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Quick Takes: Hopper takes on Airbnb to increase revenue and improve unit economics

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Newsletter published on:
February 4, 2022
Quick Takes

What is the news?

Late last month, the Globe and Mail reported that Hopper was building a short-term home rental offering into its app-based offering.  

The company, based out of Montreal, announced this week that they would be adding short-term home rentals to their offering. This also includes hotel bookings, car rental, and options to book flights as well. This is in an attempt to better target the 25-35 year old customer.

Why are they launching this product?

Hopper mentioned that they sell $1b USD worth of hotel rooms per year but they claim that half of the lodging spend that customers make go to alternative accommodations. So they feel adding short-term home rentals could increase revenues by another $1b.

According to Apptopia, Hopper has been downloaded roughly 70m times.

Why does this make sense for Hopper?

This is a later stage company taking advantage of its distribution. They have acquired 70m customers, and growing app installs will be relatively expensive at this point.

By adding a new product that they believe will generate $1b USD in incremental sales to their installed base, they are:

  • Increasing revenue growth rate
  • Increasing customer loyalty - customers do not have to go somewhere else to purchase their short term rental
  • Increasing the lifetime value of their customers - this allows them to pay more to attract new customers and provides another vector of growth

Takeaways for the community?

This is why there is a startup saying:

Will the startup gain distribution before the incumbent innovates or vice versa?

This is also another reason why you see some companies scale quickly despite losing money per customers. They believe they will be able to find products to cross-sale to the customer, in order to make the relationship profitable.

In this week's episode, we were joined by Art Harrison, Co-Founder of Daylight to discuss their recent acquisition news.

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Alex Must Reads: February 4, 2022

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Newsletter published on:
February 4, 2022
Must Reads
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Notable Canadian News: February 4, 2022

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Newsletter published on:
February 4, 2022
Notable Canadian News
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Spotlight: Lab2Market

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Newsletter published on:
February 4, 2022
Company Spotlight
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Dalhousie’s next Lab2Market cohort dedicated to supporting 11 women-led teams from across Canada

Dalhousie University announced this week, the launch of Lab2Market (L2M) Halifax Winter 2022 cohort, which will include 11 researchers from 5 universities across Canada. This cohort is focused on supporting women in research with the mentors, facilitators and entrepreneurial leads all being leading women in their fields. The teams are conducting research on diverse topics such as automated circuitry design, fatigue management, ocean waste, and pharmaceutical development.

The 16-week program will equip graduate and post-doctorate researchers with the skills required to assess the commercial opportunity for their research and extend it beyond the doors of university laboratories. Teams will focus on validating their ideas through customer discovery by identifying a problem with commercial value that they can solve.

While Statistics Canada notes that 60% of Atlantic Canada’s graduate students are women, just 36% of Lab2Market’s past participants have been women. Meanwhile, only 14% of new start-ups in Atlantic Canada are women-led, and less than 4% of all venture capital goes to women-led companies according to Entrevestor’s Atlantic Canada Startup Data 2020. Through this Lab2Market women-in-research cohort, Dal Innovates aims to empower a new generation of women leaders, entrepreneurs and scientists.

Participants will be provided with hands-on support, access to mentorship, a tailored curriculum, and the opportunity to receive $15,000.00 in funding. Each research team includes three participants: the graduate student or post-doctorate fellow, the applicant's supervisor or primary investigator, and an industry mentor from a related business sector.

Participating teams stem from Dalhousie University, Memorial University, University of Alberta, University of Toronto, and Saint Mary’s University.

The program is based on the successful I-Corps program in the United States, and the ICURe program in the United Kingdom. Led by Dalhousie University, Ryerson University, Memorial University, and University of Manitoba, funding to participating teams is provided with support from the Government of Canada through the Atlantic Canada Opportunities Agency (ACOA) and the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), Mitacs as well as the Ocean Startup Project.

Lab2Market is one of a suite of offerings from Dal Innovates that help deliver innovation and entrepreneurial skills and attitudes to students. Teams can go on to participate in the Ready2Launch accelerator, which is an intensive 3-month pre-accelerator to help teams advance and spin-out new start-ups.

To date, Lab2Market has graduated 120 teams from cohorts across Halifax, Toronto, St. John’s and Winnipeg.

Interested future applicants can find more information at lab2market.ca.

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Koho's raise becomes one of the largest FinTech funding rounds ever raised in Canada

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Newsletter published on:
February 2, 2022
Quick Takes

ICYMI - Koho announced a MASSIVE raise on February 1st, and TechTO was the first to bring you an in-depth chat with their CTO Jonathan Klein, after the news broke. Here's what you may have missed.

What is the news?

Toronto-based FinTech startup Koho has secured $210 million in Series D financing to democratize access to wealth creation in Canada.

Why is this a big deal?

This deal becomes one of the largest FinTech funding rounds ever raised in Canada, comprising of $150 in primary capital, $10 million in secondary for early shareholders and members of the Koho team, and a $50 million debt facility.

The round was led by US-based holding company Eldridge, with follow-on funding from past investors Drive Capital, TTV Capital, and Portage Ventures. BDC, HOOPP, and Round 13 Capital also participated in the round. According to the company, the new funding puts Koho “very close” to a $1 billion unicorn valuation.

The investment from Eldridge is notable, given its prolific portfolio of investments including Wealthsimple, Epic Games.

*info courtesy of BetaKit*

What are the takeaways for Founders, Entrepreneurs and the Tech Community?

Not every company starts out a rocket ship, some need to build infrastructure and a strong go-to-market strategy. This seems to be the case with Koho, which raised it’s first round in 2015, but has now raised $325m+ since 2019, due to rapid growth and product expansion.

Distribution and customer relationships are a strong asset, undervalued by first time founders. Koho went to market with a prepaid card offering, and has grown its customer relationship with new products like instant pay and savings account. Our guess is that those products generate significant revenue and getting an active customer to use a second product is much cheaper than acquiring and activating a customer. Koho now has 350k+ customers that they can cross sell to.

Due to strong entrepreneurs and Covid, the incumbent financial institutions are now seeing their core business being challenged faster than they ever expected. We  imagine if you asked any of the bank executives if they felt 'threatened' by consumer FinTech firms in 2019, they would have said no. Now they are seeing Koho, Neo and Wealthsimple grow rapidly. Furthermore all the Canadian banks are looking to hire thousands of engineers but if you were an engineer interested in working on financial products would you rather be at TD or Koho?

In case you were wondering, if Canadian financial services was a venture size or Canada size opportunity, after the last several months the answer should be clear. Selling financial services only to Canadians is a venture scale opportunity.

Finally, the changing venture financing market is having an interesting impact on Power Corp. They now look like geniuses from a market timing perspective by being the major investors in the mid 10s but as their winners raise money they are losing controlling shares in those companies.  

Want to work at Koho?

Koho are hiring in all roles, including Backend (Golang/AWS), Frontend (React), Data Engineering, DevOps, Marketing Analytics and Data Science.

Perks include:

  • 3 Weeks Vaca, Unlimited PTO
  • RRSP + Options
  • 2 performance reviews a year
  • 3 in-house Coaches
  • Wellness and Health Spending
  • Remote First

Visit their careers page to learn more and apply!

Article and info courtesy of BetaKit

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Hiring Company of the Week: Forma.AI

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Newsletter published on:
February 2, 2022
Company Spotlight
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Each week, we feature an innovative company that's hiring. This week, we take a closer look at Forma AI, a company that's helping customers close more deals with their AI-powered incentives.

How are you innovating?

Forma.ai opens a new world of possibilities and turns your sales compensation program into a powerful business driver. We’re merging AI with human controls to turn sales compensation into a science. Forma.ai isn't your traditional software solution. And we're not your typical software company either.

Learn more about Forma AI here

Why should someone join your team?

We’re a team of 90 that’s doubled in the past 12 months. We’ll double again in the next 12. Then again, and again. We’re looking for driven individuals who are excited about creating a product that will forever change the way salespeople are paid!

We’re a technology company so we pride ourselves on our ability to experiment with and master new technology. We love clever solutions and great design, and we’re always ready to try out new ways to do something old.

Forma AI is hiring!

If you're interested in joining their team, visit their careers page to learn more about their opportunities

Want to showcase your company and jobs to over 50,000 subscribers? Reach out to jared@techto.org for more information on how you can leverage our community for your hiring!

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