Startups in Atlantic Canada attracted a record $166.6 million in private capital in 2018, while increasing their revenues strongly and adding about 1,000 employees, according to a new study from Entrevestor, which provides news and data on East Coast innovators.
Entrevestor on Friday released its Atlantic Canadian Startup Data Report 2018 – the most thorough assessment of the performance and growth of a regional startup community in Canada.
This is the sixth year that we have compiled and analyzed data on high-growth, innovation companies in Atlantic Canada, and the first that is open to the public on entrevestor.com. Previously, we sold the reports to clients, but this year the Atlantic Canada Opportunities Agency and Volta led a group of supporters that arranged to have our report posted for all to see.
“Entrevestor's report demonstrates the impact that Atlantic Canadian startups have on the region's economic growth, and represents an increased collaboration between key stakeholders in our innovation ecosystem," said Jesse Rodgers, CEO of Volta, Canada’s East Coast Innovation Hub. "More people and organizations are working together to collect and share information to highlight the Atlantic region's contribution to Canada's innovation economy, and that enthusiasm towards collaboration will be a fundamental part of catalyzing Atlantic Canada's ecosystem so it can reach its full potential."
The 52-page report’s main findings for 2018 are:
The community continues to grow – Entrevestor found 550 high-growth, innovation-driven companies in the region. There were a record 115 new companies (with strong growth in St. John’s) and 66 failures. Over the past six years, the number of companies in the community has increased by about 15 percent annually.
Record funding – Atlantic Canadian companies raised $166.6 million from founders, friends and family, angels, venture capital funds and strategic investors. The funding was led by $84.7 million raised by New Brunswick companies. The total raised in private capital did not include more than $24 million on stock markets, and we noted that more and more Atlantic Canadian innovators are listing on stock markets.
Employment rising – About 5,500 people worked directly for Atlantic Canadian startups at the end of 2018, up 22 percent from a year earlier. We estimate a further 2,500 Atlantic Canadians work for multinationals that acquired startups in the region and continued to grow operations on Canada’s East Coast.
Continued growth in revenues – Well over 100 companies reported their revenues to Entrevestor, and this data showed Atlantic Canadian startups’ revenues, as a weighted average, are growing at 75 percent annually. About 13 percent of the companies have revenues of more than $1 million.
The fastest-growing sector is life sciences – About half the companies in the community are in the IT sector, but the numbers in life sciences are rising. The life sciences companies made up 21 percent of the total, compared with 16 percent four years earlier.
The oceantech sector is becoming a reality – Boosted by Canada’s Ocean Supercluster, Atlantic Canada is now home to a young, vibrant group of ocean technology startups. Half these companies are less than three years old, but the group in total attracted $8.3 million in equity investment last year, employed 713 people and more than doubled revenues.
For a few years, we’ve been describing the Atlantic Canadian startup community as a pyramid, and each year we see the base of the pyramid widen with more companies launching. Our research into staffing, funding and especially revenue shows the companies at the top of the pyramid are growing in leaps and bounds.
As well as the partners who made the publication possible, we would like to thank Mike Hayes and Mike Cyr at Charcoal Marketing, Peter Eastwood at Eastwood Design, layout artist Akira Arruda, and Connor Kirby, who contributed graphics.