Prime Minister Justin Trudeau on Tuesday paid his first visit to Communitech in nearly three years and came bearing federal funding – funding designed to help Canadian tech companies scale.
Trudeau unveiled $52.4 million of new money to be administered by three Ontario-based innovation hubs – including Communitech – for what the government is calling the “Scale-up Platform,” a program that aims to help 30 companies reach $100 million in annual revenue by 2024.
“The new Scale-up Platform will give more startups the support they need to grow,” Trudeau told a packed room on the second floor of the Tannery building.
“We expect these investments to create 18,000 good, well-paying middle-class jobs, generate $11 billion in revenues and attract more than $4 billion in investment.”
The money is being distributed by FedDev Ontario over five years. Communitech will receive $18 million, MaRS Discovery District in Toronto will receive $17.5 million and Invest Ottawa will get $16.9 million.
“Tech companies that generate more than $100 million in annual revenue will be Canada's next generation of anchor firms,” said Communitech President and CEO Iain Klugman. “For the first time in decades, we have a crop of scale-ready firms that are on the path to $100 million. Our job – through the Scale-Up Platform – is to help those high-growth firms find the talent and capital to accelerate their growth. We need to pool our expertise, our networks, and our resources to help them compete globally and create good-paying jobs for Canadians.
“It’s a good day for Waterloo Region. It’s a good day for technology. It’s a good day for Canada.”
Trudeau, who was last in Waterloo Region some 19 months ago when he made an appearance at Hack the North, said that the Waterloo Region component of the Scale-up Platform “will be led by Communitech and its partners at the University of Waterloo Velocity, Waterloo Accelerator Centre and Wilfrid Laurier University’s Launchpad.” A portion of the money that Communitech will receive will flow through those partners.
“These partners will offer various programs to get local companies to really take off,” Trudeau said. “The new Scale-up Platform will give more startups the support they need to grow.”
Prime Minister Justin Trudeau stops for a selfie with employees of ApplyBoard during a tour of
Communitech on Tuesday. (Communitech photo: Sara Jalali)
Companies can access help they need through the programs and services of the three innovation hubs leading the Scale-up Platform. Notionally, Communitech will offer help to companies in the southwestern Ontario region; Invest Ottawa will help those in eastern Ontario; and MaRS will look after those in the Greater Toronto Area. The three hubs will coordinate when needed to make sure a company gets the help it needs from the place in the best position to offer it.
“For instance, if a medical device company in Waterloo Region needs access to an investor or a regulatory expert based in Toronto then we would reach out to MaRS to help support that firm,” Avvey Peters, Communitech’s Chief Strategy Officer, said.
Steve McCartney, President of Waterloo-based tech company SSIMWAVE Inc., and a former vice-president at Communitech, said he was encouraged by what he heard from the Prime Minister. SSIMWAVE, which helps broadcasters and video delivery chain companies monitor and improve the quality of their video products, is an example of a fast-growing, scaling tech company that the new program is designed to help.
“What’s key is the whole scaling thing,” said McCartney. “My time [at Communitech] was focussed on revenue – you have to, or you’re not going to hit that magical $100 million [number].
“So yeah, I’m in complete alignment with the Prime Minister, that you invest in scale.
“I’d love to see the practical pieces, but I think SSIMWAVE will be looking for whatever [the program] can do to help us. We’re very international. We sell abroad. That’s the kind of support we’ll need – proper assistance to help us intelligently go abroad and get it right the first time.”
The Prime Minister made special reference during his remarks to the emergence of Waterloo Region as driving force in the new economy, and singled out Communitech for its role in helping that unfold.
“We have all the right ingredients [in Canada] to lead the future – the future of technology and innovation are engines of prosperity,” Trudeau said. “Communitech knows this. You’ve been way ahead of the game for a long time. More than 20 years ago, you knew this region had what it takes to become an innovation hub so you set out to make what once seemed like a distant dream a reality.
“Today you support a community of more than 1,400 companies, companies that grow and thrive because of your hard work.
“This is great news not only for the sector but for the entire community.
When it comes to innovation, we can’t afford to get complacent. Countries around the world are trying to earn top spot in the new economy and while Canadian innovators have a head start, we need to keep up the pace.
Communitech President and CEO Iain Klugman takes the podium shortly before Prime Minister Justin Trudeau made a $52.4 million funding announcement aimed at helping tech companies scale. (Communitech photo: Sara Jalali)