Calgary’s innovation ecosystem gaining momentum
When John van Pol decided to bring his pipeline inspection technology innovation to Canada from the Netherlands in 2015, he thought the obvious starting point would be Ontario. But the co-founder and CEO of Ingu Solutions Inc. soon realized that he could increase his momentum by setting up shop in Calgary instead.
“We initially picked Kitchener-Waterloo for its reputation in terms of tech expertise and the university,” van Pol explains. “But we realized we were a bit far away from our major customers in Calgary and Houston.”
Fund raising was also challenging given the nature of their product and its applications. “We didn’t really connect to Toronto or Waterloo-based investors. They weren’t so fond of the industry,” he admits.
By 2017 Ingu was firmly ensconced in the Calgary startup community, where it rapidly became a fixture in all the right places. They first joined the newly launched District Ventures and IBM Innovation Space, an accelerator launched by Arlene Dickinson and IBM Canada.
In August of the same year, Ingu was invited to join the CTV (Chevron Technology Ventures) Catalyst Program™, an initiative designed to help early-stage, best of breed companies promote their technologies to the global oil and gas industry. Since joining them, Ingu has engaged in five pilot projects.
The Catalyst Fund gave Ingu great exposure to the industry, industry experts and investment opportunities, van Pol says. “They are the first major oil company to have a program like this for promising early stage companies that puts them on the track to growth and major investment.”
Ingu is also in the first cohort of the new Creative Destruction Lab (CDL) Rockies program, which is an extension of the University of Calgary’s Haskayne School of Business. It only took six weeks into the program for Ingu to close a $1 million equity round, van Pol says. “It all happened very quickly.”
Now that the company has gone through their pre-commercial stages, 2018 will be Ingu’s first full commercial year. Much of that has been achieved through the strength of the region’s innovation ecosystem, van Pol says. “The community has been extremely good for us in terms of networking and financings. There’s a real desire here to support early stage business in the oil and gas industry. Being here has made a world of difference for us.”
Claire Dixon, director of operations at CDL-Rockies, says Calgary’s startup community has a number of noteworthy attributes. The depth of research talent for one is particularly strong. “Across the CDL network, 40 per cent of new ventures come from university labs. In Calgary that number is over 60 per cent out of the University of Calgary and University of Alberta.”
CDL-Rockies currently has 21 ventures in the program, that run the gamut from nanosensors for brain implants to early detection technologies for colorectal cancer to AI solutions for continuous process optimization.
Dixon says that in discussions with VC firms, incubators and accelerators, she is seeing a growing interest in the quality of the ventures and startups in Calgary and elsewhere in Canada. “The talent is as good if not better than what we see in Silicon Valley, and we have the distinct advantage of being able to build sustainable teams in a place like Calgary at a lower cost.”
Investors are also keen, she adds. “Some investors in Calgary represent multi-generational family wealth and are looking to diversify investments beyond traditional industries and learn about emerging technologies that might impact their existing businesses. Others are already very active angel investors in the high tech space, some of whom also represent venture capital funds.”
This entrepreneurial activity has gained considerable traction within the past two years because of the structural change in the energy industry, according to Mary Moran, president, Calgary Economic Development (CED). “A lot of highly educated and talented people were displaced. But we also saw that those people don’t want to leave.”
Their willingness to stay provided ample opportunities for innovation to grow through diversification. “Talent is the number one ingredient we have,” she says. “We also have 40 million sq. ft. of economical office space and a relatively small downtown core, making for an ideal campus-like environment. What everybody else creating an ecosystem is clamoring for, we have.”
The city also boasts more millionaires per capita, many of whom are eager to carry on investing beyond just the energy industry, Moran confirms. Those other opportunities can be found in a wide range of sectors, including cleantech, agriculture, healthcare, and transportation. “A lot of sectors have to compete more effectively and efficiently through technology, whether that’s data, IoT, AI, cybersecurity, blockchain or autonomous vehicles. All industries are looking for innovators to help them solve problems.”
The last 12 months have been particularly prolific in terms of building up the community. New arrivals include Zone Startups sponsored by GE; Startup Calgary, which is in the process of a $100 million investment opportunity; and University of Calgary’s Hunter Hub for Entrepreneurial Thinking. “The connections are happening super, super fast,” Moran says.
Investors from outside the region are also starting to take notice. This year Calgary will be playing host to the Canadian Venture Capital annual conference. CED and industry players are also in the early stages of working with VCs in Silicon Valley and Portland.
A visible testament to the burgeoning ecosystem is the Edison Building (formerly Encana Place), which has been completely redesigned and upgraded to serve as a headquarters for collaborators, innovators and visionaries. It is now a major hub for ecosystem players, from startups and VCs to incubators and accelerators.
While Calgary’s innovation ecosystem may be relatively new, there has already been a change in the city’s persona, Moran believes. “Calgary isn’t what many have been led to believe. You are definitely seeing more sneakers than cowboy hats.”
*Please note that the $100M investment opportunity is in reference to the Economic Development Investment Fund (EDIF). The EDIF is a City of Calgary initiative and Calgary Economic Development will be the gatekeeper of the intake process.