After the funding announcements emerged from St. John’s, the postings began to appear for job openings with the companies.

Clockwork Fox Studios, Sentinel Alert, HeyOrca!, and Sequence Bio had all just raised money from local institutions and were now hiring.

In the past year, St. John’s has witnessed an evolution that many in its startup community had been working on for a long time. It has had an active community, mentorship and work areas for a while, but now there are new funding streams in place that are generating growth.

“It’s incredible for the community,” said Peter Gifford, Propel ICT’s St. John’s-based ‎Entrepreneur in Residence. “At the moment, we’ve got very active seed-stage investors who are not only investing their capital in the companies but are also investing their expertise.”

Two factors led to the funding growth. The Newfoundland and Labrador government teamed up with several parties to form the Venture Newfoundland and Labrador fund, which is managed by Pelorus Venture Capital. Meanwhile, Killick Capital, the investment fund of the Dobbin family, realized gains from a few exits and was in a position to redeploy capital.  

“When we looked at the investment opportunities available in St. John's they were skewed to earlier stage companies,” said Mark Dobbin, who heads the fund. “We decided to respond to this market by investing in more companies at smaller amounts per company.”

Sentinel Spends a Week with d{}

Through last autumn and winter, Venture NL and Killick spearheaded a funding drive into four growth-stage companies in St. John’s:

- Sequence Bio, $1 million, co-founded by Tyler Wish and Chris Gardner. The St. John’s company that analyzes genetic data to improve medical outcomes received $500,000 in equity funding from both Killick and Venture NL. Founded in 2013, Sequence works with partners to analyze vast sets of data from gene pools to get a deeper understanding of which people are at the greatest risk of contracting a disease.
- Clockwork Fox, $1 million, founded by Ed Martin. The educational game producer landed $750,000 in new investment from Killick and Venture NL. It also received funding from Pluto Investments, Petten Holdings, and Joe Antle. The company’s flagship product is Zorbit’s Math Adventure, a game-based learning system for early math that aims to improve K-3 learning outcomes.
- HeyOrca!, $625,000, co-founded by Teo and Sahand Seifi.  HeyOrca! is an online platform that helps marketers collaborate on social media content. The company, which operates out of the Genesis Centre, is a graduate of the PropelICT Build program, allowing it to tap into a $150,000 convertible note from BDC Capital.  The other investors in this round are Venture NL and Killick.
- Sentinel Alert, $525,000, co-founded by Sarah Murphy and Jason Janes. Sentinel produces software that can detect when a worker has had an accident or may soon have one. The software is originally being used on devices like smartphones, but the company hopes to eventually partner with a hardware company to produce a wearable device. The company received investment from Killick, Venture NL and a private angel investor.

These deals amount to just over $3 million, which is significant but not earth-shattering. What’s interesting about the recent funding wave is the various sources. In addition to individual and family investments, several institutions have invested in Newfoundland lately. BDC Capital is a direct partner in Venture NL and made a direct investment in HeyOrca! In addition to these investments, Halifax-based Build Ventures in late 2014 invested $3 million in St. John’s-based Celtx, which makes software for the film industry.

The greater significance is what comes next. These companies are now in a position to raise more money, assuming they build their operations significantly. And as the St. John’s success story Verafin has demonstrated, the real economic benefit comes in the later stages.

“A percentage of our fund is dedicated to follow-on investment,” Pelorus investment manager Chris Moyer recently told Entrevestor. “Private funds allow everyone to work together to push the companies forward…. In all our investments, angels that invested in our fund invested their own money in the companies as well.”