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When analyzing our data on the Atlantic Canadian startup community over the past few years, we’ve noticed that startups that collaborate with post-secondary institutions outperform the broader community. Once again, with our study of companies in 2017, we have found that innovation companies working with universities (and in a few cases with communities colleges) have stronger revenue growth and raise more capital than others in the community. The university-affiliated companies aren't quite as strong in terms of employment growth, but it is strong nonetheless.
Each year, Entrevestor collects and analyzes data from interviews and surveys with Atlantic Canadian startups, and we’ve just completed our report on the community in 2017. This year, we’re working with some groups that support our research to produce articles that explore key aspects of the ecosystem. Today, Springboard Atlantic has asked us to look at the performance of startups and high-growth companies that work with universities and colleges.
The relationships between these institutions and startups take several forms. Some startups grow out of research conducted at universities. Others (especially life sciences companies) work out of the institutions’ facilities. Others may have come up through university programs, like Launch Dal at Dalhousie University, the Genesis Centre at Memorial University, or the Technology, Management & Entrepreneurship program at University of New Brunswick.
We found that 134 startups and high-growth companies – more than one-quarter of the total startup community on the East Coast – have some form of relationship with post-secondary institutions. And these 134 companies are growing strongly.
Several companies working with universities shared their revenue data with us, and in total these companies doubled revenues in 2018. This means they outperform the broader community by about one-third in terms of sales growth. The revenue growth is strong in part because several of these companies that work with universities are reporting revenue for the first time.
In terms of attracting equity investment, these companies raised a total of $51.7 million in 2017 – about 45 percent of the total equity funding in the community. To put that number in perspective, $51.7 million is almost as much as the total East Coast startup community raised in 2015.
We also witnessed strong growth in new companies that have relationships with universities. Some 32 companies launched in 2017 are working with or out of post-secondary institutions, and they represent more than one-quarter of the startups launched last year.
This shows that university entrepreneurship programs are effective in producing the next generation of regional startups. Some of the most exciting new companies in the region, such as Pfera (UNB), CoLab Software (Memorial University) and Graphite Innovation and Technologies (Dal), have come up through university programs.
The one category in which the university-affiliated startups lagged the overall community was in job creation. The total employment of the companies working with universities was 951 jobs, which is up 24 percent year-on-year. It’s strong growth, but it’s a few percentage points shy of the employment growth at the other startups. We believe the reason for this is there are several tech companies that do not work with universities that are adding staff at a crazy pace, and they are influencing the overall stats.
Still, the fact that university-affiliated companies are increasing staff by 24 percent annually is a testament to their growth potential. And the other metrics: in sales growth, fund-raising and the generation of new companies, demonstrate how colleges and universities contribute to the startup community.
About Springboard Atlantic:
Springboard Atlantic is Atlantic Canada’s commercialization network representing the collective academic research and development capacity of 19 universities and colleges across the region. More than 30 professionals work on behalf of Springboard within their institutions bridging academia and business, and fulfilling Springboard’s mandate to bring world class ideas to the marketplace while solving some of the most significant challenges facing industry. With over 6000 research deals done in the last 3 years, the Springboard network stands as a leading model in Canada to drive industry and institution collaboration, and to mobilize innovation.
