Entrevestor reported in September that Innovacorp had sold all its shares in the publicly listed company shortly after it listed on the Nasdaq, realizing proceeds of $104 million. That’s a return of 35 times on the $3 million investment Innovacorp had made in Meta over about six years.
However, at the time of that revelation, it was not known what would happen to the proceeds. Some people in the innovation community had been hoping Innovacorp would retain the money so it could be used to further develop the startup ecosystem. These people said that the money would not have to remain within Innovacorp per se, but should be used to improve the ecosystem that had produced the windfall and supported companies like Meta.
The provincial government, on the other hand, faces huge financial pressures. It is projecting a $445 million operating deficit in the fiscal year that ends March 31, 2022. What’s more, the government of Premier Tim Houston has promised to spend about $430 million in new money to improve healthcare in the province.
Finance Department spokesman Gary Andrea confirmed on Monday that $101 million has been transferred from Innovacorp to “General Revenue”, meaning it will be used to cover the costs of general government operations.
Meta produces materials that alter light, either by magnifying, repelling or filtering it. The company is best known for its metaAIR venture with Airbus, which is producing a transparent covering for airplane cockpit windows that can filter out laser attacks. It is working on a range of other applications, from healthcare to geothermal energy.
When the shares began trading on the New York-based Nasdaq exchange in June, Meta noted that one of its largest shareholders was Innovacorp. However, the Crown corporation’s mandate calls for it to invest in startups rather then hold the shares of publicly listed companies. That and the opportunity to book a healthy gain no doubt led to the decision to exit the investment.
One of the people who believed the proceeds from the investment should have remained with Innovacorp is George Palikaras, Meta’s Co-Founder and CEO. In October, he said during the Entrevestor Live virtual conference that young, high-growth companies in Nova Scotia need support. On Monday, he said he would have liked to have seen support for medtech and deep technology companies in particular.
In an email, he said: “With further capital support by the Province, it would allow Nova Scotians early access to cutting edge technologies that help improve patient outcomes while at the same time helping startUp companies grow, export globally and attract foreign direct investments . . . to the region.”