One of the bright spots of the Atlantic Canadian startup community in 2019 was the strong showing by rural innovators, especially in Nova Scotia.

A stalwart of the startup community once told Entrevestor, “Innovation tends to be an urban phenomenon.” The fact that 90 percent of the companies covered in our 2019 Atlantic Canadian Startup Data report are based in cities certainly lends credence to that statement. But that is not to say that cities are the exclusive preserve of high-growth innovation companies. In the last couple of years, we’ve witnessed more methodical approaches to developing innovation in rural settings.

The reason innovators tend to thrive in urban environments is the proximity to resources – especially human resources. Funding agencies, universities, mentorship groups – they’re all based in cities. Most Atlantic Canadians live within a few hours’ drive of a city, so it’s not as if these facilities are inaccessible to rural innovators, and there are support groups for rural entrepreneurs. Andrew Button, the CEO of Mashup Lab, has been offering virtual curriculum for entrepreneurs for years, and Acadia University has championed innovation in the rural economy.

Then in 2018, Propel began to offer virtual curriculum for both its accelerators (one for early-stage companies, the other for scaling companies). That allowed rural IT companies the same programming as their urban peers. Also in 2018, Ignite opened in Yarmouth, to provide an innovation hub in southern Nova Scotia. A year later, Ignite opened a second base, this time in Stellarton, N.S. in Pictou County. The Spark Nova Scotia competition for entrepreneurs outside of Halifax was taken over by Permjot Valia and Sandra Goodwin in 2019, and it awarded $750,000 in prize money to 20 companies in the past two years.

In the past few years, we’ve seen an increasing interaction between the rural organizations, the companies they work with, and the support organizations in larger centres. Ignite has signed an agreement to cooperate with the Start-Up Yard at COVE in Dartmouth, and its companies like BlackWatch.Tech have been working out of the Dartmouth facility. BlackWatch also entered (and won $25,000 in) the Volta Cohort pitching event in May 2019. Enginuity, the Halifax engineering firm, has been helping rural companies like The Lobster Trap Company of Yarmouth make their prototypes and get products to market.

Rural Atlantic Canada Startup Fact Box, 2019

 Source: Entrevestor Data Bank

Nova Scotia has shown itself to be the farthest ahead in supporting rural innovation, with most of the programs described here taking place in that province. The province that has shown the least progress is Newfoundland and Labrador. Of the 86 companies we cover in the province, all but three are in the greater St. John’s area. There is work being done to address the situation.  In Corner Brook, Memorial University’s Grenfell Campus and the College of the North Atlantic have come together to form the Navigate Entrepreneurship Centre. And now that Genesis has solidified its St. John’s base with the acquisition of the Common Grounds co-working space (now Genesis Coworking), the organization aims to do more to encourage entrepreneurship in Western Newfoundland and in Labrador.

This year, the $55,000 BioInnovation Challenge, the main pitching competition in the region for life sciences companies, was won by SwiftSure Innovation from Pasadena on the West Coast of Newfoundland. Swiftsure is developing a device to facilitate the moisturization and cleaning of ventilator patients’ mouths and noses by flushing them with fluid.

Several rural companies have raised equity capital, including Miramichi-based fintech company Patchell Brook Equity Analytics, which raised $360,000 in the fall of 2019, after two years of strong revenue growth. The federal government’s main funding bodies – the Atlantic Canada Opportunities Agency and IRAP – have been strong supporters of rural innovation. Last year, these two bodies contributed $7.7 million to high-growth companies in rural parts of the region – more than three times the equity funding in these areas.

What’s more, we’re not seeing a surge of rural zombies. By our calculations, rural companies make up 10 percent of the startups in the region, and they account for 14 percent of the zombies we tracked in 2019.

Editor's note: We're now publishing excerpts from our 2019 Atlantic Canada Startup Data report. Today we're looking at the section on rural innovation. Please check out our previous stories here:

The 2019 highlights in PEI were big deals and ecosystem development.

The big story in Nova Scotia in 2019 was the evolution of the ecosystem.