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Tuesday, September 17, 2019

Fed dollars to boost region’s tech companies

Communitech is one of three Ontario incubators to share in the $52.4 million announced during PM’s stop in the region

Justin Trudeau’s post-budget, pre-election stops across the country turned into a boon for the tech sector when the Prime Minister stopped in Waterloo Region last week.

Part of Trudeau’s two-day visit included announcing funding for three technology groups in Ontario, including Communitech, which positions itself as the hub for tech companies in the region.

The government will spend $52.4 million through FedDev Ontario on what is called a “Scale-Up Platform.” It is to be distributed over five years in Waterloo Region, Toronto, and Ottawa. Kitchener-based Communitech will receive $18 million. Toronto’s MaRS Discovery District gets $17.5 million, and Invest Ottawa benefits $16.9 million.

The goal is to create 18,000 skilled jobs in the province.

Chris Plunkett, Communitech’s vice-president of external relations, said the money would be directed towards long-term growth.

“We’re working on helping high-growth companies become even larger,” said Plunkett. “We’re helping them by building out their sales processes, providing strategic advice, helping them with investment, and with a lot of their talent acquisition and organizational structure. So it’s not a direct ‘you take the money and hire jobs with it’; it’s really about growing companies, so you have long-term jobs in the region and across Ontario in the tech sector.”

Labelled as the first of its kind, the Scale-Up Platform will support 30 companies in southern Ontario to grow and achieve revenue objectives of $100 million or more by 2024. It is also expected to generate $11 billion in revenue, as well as attract $4 billion in investment. Plunkett said this will help Communitech go above and beyond original revenue goals for start-ups.

“We’ve done a lot over the years helping start-ups get to that $5, $10, $20 million in revenue. We kind of tap out on how we can help them around that point,” said Plunkett. “So focusing on how we build up that expertise at Communitech that we can continue to provide them that help as they go past $10 million in revenue.”

The organization plans to hire a team that will provide help and advice to rapidly growing start-ups, as well as talent in human relations. Plunkett noted that the group’s growth coaches are often overbooked.

Communitech notes it has helped to transform the regional economy over the past decade by supporting more than 3,000 companies in the creation of 16,000 jobs and attracting $1.7 billion in investment.

A portion of the funding will also benefit partners of Communitech, including the University of Waterloo’s Velocity Program and Wilfrid Laurier University’s Incubator Pad. Each will use the funding for what benefits their specific program. For example, Velocity will be using the funds to build a larger lab space.

“Velocity has plenty of companies that use what we call deep tech – science and biology areas – so they need more research lab space, and more ability to help companies. The thing with deep tech companies is they take longer to grow – it takes longer to develop the product,” said Plunkett.

“They need to be able to have that space and that capacity to help some of these companies in the more advanced science areas. They’ll be using the money to build out a 3,500-square-foot lab in their space that will have a lot more high-end scientific equipment.”

Regional Chair Karen Redman welcomed the announcement.

“Sometimes I despair that the Canadian dream is to do something innovative, grow your company, and sell it to an American,” said Redman. “This will allow us to have a good idea, start your company, grow your company, and keep upscaling your company because we will now connect investors and provide the capacity that these start-ups need to continue to be sustainable, growing entities and employers in Canada. And that excites me. I think it’s money very spent.”

Veronica Reiner
Veronica Reinerhttp://www.observerxtra.com
Veronica Reiner is a Reporter Photographer for The Observer.

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