The important activity in the Nova Scotia startup community in 2019 was in the development of the ecosystem rather than the performance of companies.
Certainly, many companies had highlights, which we’ve already cited. ABK Biomedical raised $40 million in a VC round. CarbonCure Technologies was named the 2020 North America Cleantech Company of the Year. Appili Therapeutics listed on the TSX Venture exchange. Metamaterial Inc. began a listing process ithat it hopes will lead to a listing on the Nasdaq Stock Market in 2021. And overall, there was pretty good performance by the broader community.
With 100 rookie companies, the number of startups in the province increased to 371. Taken together, these Nova Scotian companies delivered impressive metrics, with jobs increasing 21 percent and revenue 34 percent.
Nova Scotia Startup Metrics 2019.
|Number of Companies||371|
|Funds Raised||$83.6 million|
|Number of Jobs||3,190|
|Job growth||21 percent|
|Revenue growth||34 percent|
Source: Entrevestor Databank
One thing to notice about the highlights above is that none of them are IT companies, even though IT accounts for more than 60 percent of the Nova Scotian startups. While the IT group includes several elite Nova Scotian companies like SimplyCast and Dash Hudson, huge strides have been made in other sectors, especially life sciences.
Startup Genome, the Silicon Valley-based evaluator of startup ecosystems, noted in early 2018 that the life sciences sector is one of the strengths of the Atlantic Canadian ecosystem, and it is certainly true in Nova Scotia. As the COVID-19 crisis deepens, it’s becoming more and more apparent that several Nova Scotia life sciences companies are advancing rapidly.
The real growth came in the ecosystem, as there were four improvements (some of which apply to the entire Atlantic Canadian ecosystem but are pronounced in Nova Scotia):
1. A Focus on Scaling – Nova Scotia Business Inc. will soon launch its third cohort of Scale Up Hub: Cambridge, in which companies commit to spending time in the Boston area to develop markets in New England. NSBI is interested in expanding the program to include other cities around the U.S. and the world. It is one of several programs that encourage the sales of growing companies.
2. Increased Emphasis on Research – Lab2Market and the Springboard Atlantic “Tables” (groups of academics and executives in target industries) are rolling out, accentuating the role of applied research in the creation of new companies.
3. Development of the Oceantech Ecosystem – Nova Scotia is far ahead of other provinces in generating new companies in the ocean space and supporting them with programs and facilities. The Start-Up Yard at COVE is growing in importance as its companies are attracting investment and drawing attention within the startup space. Start-Up Yard and the engineering firm Enginuity are working with groups like Ignite to provide an urban base for innovators from outside Halifax so they have access to the resources in the region’s largest city. And the Creative Destruction Lab-Atlantic, offered through Dalhousie University, has a stream dedicated to ocean technology, providing curriculum and funding opportunities. In total, the oceantech ecosystem is developing, and even attracting startups from outside Canada to spend time in Nova Scotia.
4. A Strengthening of Links Between Organizations – There has been an explosion of organizations working in the startup space in the past few years, and there are groups working to link the various components of the ecosystem. The Atlantic Canada Opportunities Agency has been working at this across the region for several years with the Atlantic Growth Strategy. Now ONSIDE – which stands for the Organization for Nova Scotia Innovation-Driven Enterprise – is working to provide a link between the various groups and strengthen their operations. In Halifax, the Halifax Innovation District, overseen by the Halifax Partnership, is performing a similar function within the capital city, acting as a conduit between the various support groups.
The Cape Breton startup community continues to advance with a few companies leading the way. Securicy, which helps SMEs meet the cybersecurity standards of the enterprise customers, launched its product in January 2019 and its revenues increased 3.8 times in 15 months. Orenda Software Solutions, whose solution interprets impressions about an organization and calculates the potential impact on its brand and reputation, received more than $850,000 in support from the federal government early in 2020. It intended to use the money to expand from five to 12 employees.
One final note about the Nova Scotian ecosystem is there should be a long-term boost from the launch of the Innovation Equity Tax Credit. The big move was the Finance Department raising the ceiling for qualifying investments from $50,000 to $250,000. That means a scaling company needing $1 million needs to find four angel investors, rather than the 20 previously. The added incentives for oceantech and life sciences companies should help those sectors in the long term.
Editor's note: We're now publishing excerpts from our 2019 Atlantic Canada Startup Data report. Last week we highlighted P.E.I. and today we've moved on to Nova Scotia.