After the dire shortages of PPE early in the pandemic and slow rollout of the COVID vaccine, Canada is making a concerted effort to entice new manufacturing entrants into the market. And it’s starting to pay off.
Massachusetts-based drug maker Moderna is developing an mRNA vaccine manufacturing plant in Canada by 2024. Two battery cell manufacturers have recently announced they will set up shop in Canada, one in Quebec and one in Ontario, with plans to build gigawatt hour–scale cell manufacturing facilities.
“These new facilities will cause a ripple effect on our economy,” says Jason MacFarlane, head of advanced manufacturing services at MaRS Discovery District, “such an increase in local jobs, shorter delivery times, innovation, reliable quality and a smaller carbon footprint. It can also be a win-win situation for Canadian startups looking to break into markets abroad,” he says.
Robert Bush, founder and CEO of Rivelin Robotics, a U.K.-based company that uses sensors, digital twins and computer vision to make an automated platform for metalworking, has been eyeing the Toronto and Montreal markets for some time, given its strength in additive manufacturing and artificial intelligence research. When presented with the opportunity to be part of a new four-month manufacturing incubation program aimed at helping launch U.K. startups into North American markets, he jumped at the chance.
“North America is one of the best regions for adopting new technologies,” says Robert Bush, founder and CEO of Rivelin Robotics. “Manufacturers have been crying out for more automation within additive manufacturing and this partnership will increase our exposure and chances of adoption into this sector.”
Led by Innovate UK, the British government’s innovation agency and MaRS Discovery District, the program offers Rivelin Robotics and seven other British advanced-manufacturing startups targeted workshops, advisory support and networking opportunities to help the participants sharpen their value proposition and better understand the needs of North America’s manufacturing community.
More Canadian companies jump into the investment game
Investments have been pouring into startups during the pandemic at record levels. Now large Canadian companies are getting in on the action.
Toy giant, Spin Master, the company behind the franchise Paw Patrol, announced a $100 million fund for games and entertainment last week. And that comes hot on the heels of Thomson Reuters’s launch of an early-stage fund for new media and information technology.
Corporate participation was on the rise, making up 39 per cent of all Canadian deals, a 2018 PwC and CB Insights report found. In an interview with Betakit, Michael Dingle, PwC’s national technology sector leader explained that corporates were finding that the risk-reward of investing in Canadian innovation and technology at earlier stages made good business sense.
“These entities are challenging the traditional distribution inside of the market and are providing these corporates with something they don’t otherwise have,” said Dingle.
Industry observers attribute this latest flurry of corporate venture investment to a new pool of angel investors, increases in valuations and an overall knowledge and comfort with the startup space.
Maya Kotecha, co-founder and co-CEO of Hoot Reading, was thrilled to hear that Spin Master was getting into the venture capital game and better yet, that it would be investing in Hoot Reading. “Spin Master is a really exciting match for us. Not only can we tap into their incredible diverse portfolio of innovative toys, entertainment franchises and digital games, but they also have a huge customer funnel through their digital companies, as well as an incredible brain trust at building massive brands in the kids space,” says Kotecha.
However, startup founders need to make sure corporate venture capital is the right fit for them, cautions Lance Laking, managing director of the MaRS Investment Accelerator Fund, one of Canada’s most active and successful venture capital funds.
Companies at the seed stage, Laking says, need value-add investors to support their growth from seed to series A, not just funding.
“Startup founders have to be conscious of other conditions and risks,” he says, noting that when it comes to corporate VC funding, this could include, “exclusivity, a lock up from other potential strategic investors or acquirers, and big company procedures and processes that hamper the speed and execution advantage inherent to startups.”
For Kotecha, this was something she says Hoot Reading considered before partnering with Spin Master. “We are very selective about who we bring to the table. Anybody looking to grow their business with outside capital is looking to maximize the value they get from those funds. Partnering with Spin Master gives us significant advantages for our business that we felt was above and beyond what traditional investors could provide. We do, however, have very experienced investors also as members of the Hoot family and we leverage their value accordingly as well,” says Kotecha.
IN OTHER NEWS:
Trusscore, a maker of sustainable building products (including walls to separate livestock), raised $26 million, led by Round 13 Capital’s Earth Tech Fund. The company says the proceeds from the round will help support further research and development into other concepts like digital paint and fire resistance surfaces.
InteraXon makes devices that help people learn how to meditate and sleep better. It recently launched a second generation of Muse S, a plush brain-sensing headband that uses real-time biofeedback to help a wearer fall asleep, stay asleep and now go back to sleep if you awaken during the night.
Toronto-based healthtech company Steadiwear secured $1.1 million in financing. The company says it will use the funding to help with the commercialization of its new product the Steadi-Two, which is a second-generation stabilizing glove that can adapt to a wider range of hand tremors in people with Essential Tremor and Parkinson’s disease.
Prodigy Education, an edtech leader in game-based learning is expanding beyond math games with a new English language arts game. The new game is expected to fully launch in the spring of 2022, but the company says that teachers and parents can apply now for early access.
- Construction software provider Bridgit raised $24 million in a Series B round that will help the company hire more staff, further its product development and increase market share.
BrainBox AI, which makes heating and ventilation systems more flexible and efficient in commercial buildings, raised $29 million and will use the funds to further deploy its technology.
Disclaimer This content was produced as part of a partnership and therefore it may not meet the standards of impartial or independent journalism.