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I lately wrote about Wattpad co-founder Allen Lau’s name for Canadian buyers to be extra cutthroat. That e-newsletter installment seemed on the dismal numbers Canada’s VCs put up in opposition to our neighbours to the south when it comes to deal depend and {dollars}. This week, we’re diving deeper into the dialog.
Ryan Henry, accomplice at Sand Hill North, invests primarily on the pre-seed and seed phases. Last 12 months, he switched from primarily investing in Canadian startups to writing 80 to 90 p.c of his cheques within the US. Why?
One of Henry’s main complaints is that Canadian corporations “spend too much time” constructing a product, going to market on the seed stage. “Many of the best companies that grow very quickly down in the States are in stealth mode for a couple of months and then launch very quickly, go to market very quickly, and get hundreds of thousands of ARR within the first couple of months,” he mentioned. “That would be abnormal in Canada.”
On the flip aspect, Topicflow CEO Amin Palizban informed Alex Riehl that he had a troublesome time with Canadian buyers for his firm’s $2.5-million seed spherical. The former 7Geese CEO, who ended up elevating solely from US buyers, mentioned Canadian VCs frequently informed Palizban he was too early for funding, and requested for sophisticated deal phrases. The distinction elevating within the US was “night and day.”
On LinkedIn, some founders cautioned portray Palizban’s expertise as uniform, whereas others mentioned founders privately inform one another to not trouble attempting to lift in Canada (BetaKit has heard the identical in our DMs).
It’s not simply elevating from the US: some founders are uprooting their corporations solely. CMD Capital’s Matt Roberts mentioned seven founders have personally messaged him to say they’re leaving Canada.
“Everybody will talk about capital gains, that’s part of it, but I’m hearing people say they’re leaving because of general things like the high cost of living,” Roberts mentioned. “Experienced founders in our ecosystem are choosing not to do it again.”
Are they fleeing a ‘go-for-bronze’ tradition? Panache Ventures’ Chris Neumann doesn’t suppose Canadian founders lack ambition. He does imagine that the Canadian ecosystem is lacking key components, main founders to determine “the best path to fulfill their ambitions involves leaving Canada.”
It’s a tricky tablet to swallow heading into Canada Day. But as Neumann notes in his weblog submit, Canadian tech (on all sides) may benefit from listening to some constructive criticism.
Thanks for studying on and ’til subsequent week,
Bianca Bharti
Newsletter Editor
Burn season
On June 25, greater than 100 tech sector leaders and finance professionals attended the BetaKit Talks: In the Black, hosted by Float. The candid dialog featured Rob Khazzam, CEO and Co-Founder of Float, Christian Weedbrook, CEO and Founder of Xanadu, and Hanna Zaidi, VP, Payments Strategy and CCO of Wealthsimple. Read their insights from our restricted occasion collection, which convenes and engages Canadian tech on top-of-mind points and challenges.
Float is Canada’s solely enterprise finance platform for managing all non-payroll spending in a single place. Sign up for Float and get early entry to Bill Pay and Reimbursements.
TOP STORIES OF THE WEEK
BetaKit wins General Excellence, Small Publication at SABEW Canada Best in Business Awards
BetaKit took residence two awards at SABEW Canada’s tenth Annual Best in Business Awards Monday evening.
BetaKit obtained the 2023 award for General Excellence, Small Publication, whereas reporter Josh Scott obtained the Jeff Sanford Best Young Journalist Award.
“Holy shit, we won,” posted BetaKit editor-in-chief Douglas Soltys to social media.
(Read extra)
Pay hole between males and girls in tech tripled over 5 years
The pay hole between males and girls working in tech practically tripled between 2016 and 2021, underlining the rising inequality within the sector, in accordance with a brand new report.
Public coverage group The Dais, based mostly out of Toronto Metropolitan University, launched a report Thursday titled “Canada’s Got Tech Talent,” which discovered that males made $20,000 extra on common than girls in 2021. The hole has widened since 2016, when males made $7,200 greater than their feminine counterparts. In 2021, males earned $91,000 on common, whereas girls earned $71,400.
(Read extra)
Susan Hawkins to guide Payments Canada as president and CEO
On Aug. 12, Hawkins will formally assume the position, which has been held by interim co-CEOs Kristina Logue and Jude Pinto since Tracey Black stepped down from the place in April after selecting to not renew her time period. Once Hawkins begins, Logue will resume her position because the company’s chief monetary officer, whereas Pinto will resume as chief supply officer.
Hawkins joins Payments Canada from TD Bank Group, the place she labored for over 5 years, serving as international head of enterprise funds and govt vice-president of US funds.
(Read extra)
Why SaaS shouldn’t sleep on buyer success in a down market
For Matt Roberts, the times of encouraging explosive progress have given approach to pressing instructions to stave off loss of life.
As the co-founder and normal accomplice at CMD Capital bluntly put it: “Cash today is hard to find, and so expensive to get.”
SaaS companies are inclined to fare a lot better in down markets, mentioned Roberts, thanks partly to the predictability of recurring income. But they’re now more and more in danger, as enterprise clients minimize prices and streamline current contracts.
(Read extra)
From God’s Pocket to YVR, how a BC program is giving startups a significant testbed for scale
In 2020, cleantech startup Moment Energy was a staff of 4 figuring out of a storage in Port Coquitlam, BC.
The firm had created an modern power storage resolution utilizing repurposed retired electrical automobile batteries. Their early clients had been a handful of distant, off-grid websites together with a chilly water dive resort referred to as God’s Pocket, off the northern tip of Vancouver Island.
Today, the corporate is working with a world airport that sees tens of millions of passengers every year.
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Don’t miss out on two nice Canadian tech occasions
Tickets are nonetheless obtainable on the Startup Train from the Greater Toronto Area to Startupfest!
Travel in fashion with chartered enterprise class vehicles alongside buyers, startups, and mentors headed to Montréal, July 9-12. Register now to entry BetaKit’s 15% low cost.
And the Super Early Bird supply ends as we speak for Elevate’s world-class Tech + Innovation Festival, Oct. 1-3, at Meridian Hall in Toronto. Get your #ElevateFest2024 tickets for as much as 50% off right here.
Funding, Acquisitions, and Layoffs
TOR – Haloo – $4.7M CAD
TOR – e-Zinc – $42M CAD
TOR – Healwell invests $2.7M CAD in xAI
TOR – IGM Technology receives strategic funding by Lead Edge Capital
TOR – INOVAIT invests $10.7M throughout seven initiatives
KWL – CoGuard receives OpenAI grant
OTT – Raven Connected – $10M
OTT – FedDev invests $20M throughout 9 corporations
OTT – Feds make investments $2.4M in two Ontario accelerators
QBC – Gaia – $18M CAD
MIA – Hut 8 – $150M
HFX – Innerlogic – $1.3M CAD
The BetaKit Podcast
This deep tech PE agency was drawn to Canada by the information
“In Canada today … if you look at the inventory of 20,000 great technology companies, 60 percent of those have never met an investor. Because they’re really busy at meeting customers.”
Jolt Capital managing accomplice Jean Schmitt joins to debate why he made Montréal his deep tech personal fairness agency’s North American HQ, and the alternatives for funding he sees throughout Canada.
Teladoc Health Canada releases research that reveals over 78% of Canadians discover accessing psychological well being assist within the well being care system a problem
Teladoc Health Canada, a number one supplier of digital healthcare companies, lately partnered with Modus Research to survey over 1,600 Canadians to make clear the psychological well being wants of Canadians and the persistent challenges they face in accessing assist.
Key highlights:
• 71% can be extra possible stick with an employer who absolutely supported their psychological well being wants
• More than 78% who accessed psychological well being assist report that navigating the well being care system to seek out this assist was “somewhat difficult” or “very difficult”
• 53% discovered it difficult to find an expert who can successfully assist them. Of those that obtained care, solely 28% had excessive ranges of confidence of their analysis
For extra info, please go to https://www.teladochealth.ca/expert-care/mental-health/
Feature picture courtesy Unsplash. Photo by Igor Kyryliuk.