The past year has been one of significant change for the East Coast startup ecosystem, as a tumultous global economy made its presence felt in Atlantic Canada. Here’s a look back at some of the biggest innovation stories of 2022:

Many top-performing startups raised big.

One of this year’s top funding stories was the same as last year: Dartmouth-based advanced materials startup Meta Material raised millions of dollars from public markets.

Meta went public on the Nasdaq in 2021 via a reverse listing, raising about US$160 million in the process. This June, the company sold more shares for another US$50 million ($64 million at the time). That meant Meta produced the largest capital raise of any innovation-driven company in Atlantic Canada for the second year running.

The announcement came in the wake of Meta announcing it would buy the assets and intellectual property of Devens, Mass.-based Optodot for US$48.5 million, signalling a move into next-generation battery technology as it seeks a way to monetize its system for using artificial intelligence to design materials with properties not found in nature.

Mara Renewables, which makes algae-based ingredients for nutritional supplements, baby formula and food, also raised $39.5 million in a May round led by Toronto specialist VC InvestEco Capital. The deal was the second largest of the first half, after Meta.

In July, Halifax’s Milk Moovement, which makes supply chain management software for the dairy industry, raised a US$20 million round of Series A funding as it looked to expand its product development team and cement its rapidly expanding foothold in the lucrative United States market.

And earlier this month, Halifax medical device maker ABK Biomedical closed a US$30 million Series C funding round as it worked to commercialize one cancer-treating technology and pursue United States Food and Drug Administration approval for another.

Key changes at the ecosystem level kept founders on their toes.

In September, we reported that uncertainty in the East Coast startup ecosystem had reached heights we had not seen before. Entrevestor principal Peter Moreira wrote that changes at startup support organizations had left founders uncertain about the future of some components of the innovation community.

We have a better idea of where the ecosystem stands now.

At Halifax startup hub Volta, where CEO Martha Casey left to rejoin former boss Richard Florizone at the International Institute for Sustainable Development, serial entrepreneur and former Volta chief innovation officer Matt Cooper has been chosen as her replacement.

Also in Nova Scotia, the merger of provincial venture capital Crown corporation Innovacorp and business development group Nova Scotia Business Inc. into Invest Nova Scotia has been completed. Details of premier Tim Houston’s plans for the new agency are not yet fully public, but so far, it has continued to operate many of the same programs offered by its forbearers.

At the New Brunswick Innovation Foundation, meanwhile, outgoing director of finance and investment Raymond Fitzpatrick has been replaced by John Alexander and Peter Goggin, both sharing some aspects of his role. Although no replacement for former director of research Laura Richard has yet been announced.

In Newfoundland and Labrador, Florian Villaumé left the top position at the Memorial Centre for Entrepreneurship to become the new head of IT industry association TechNL. Longtime entrepreneur Ed Martin in turn took the helm at the MCE. 

The labour market added uncertainty.

For much of the year, there were not enough skilled workers to fill all the job openings in the community. Now, early signs suggest the pendulum could be swinging to the opposite extreme.

Founders interviewed by Entrevestor until this fall overwhelming reported rising staffing costs and difficulty filling open positions. Kathryn Lockhart, CEO of online startup incubator Propel, said in April companies she worked with were paying salaries in the high five figures and even low six figures for developers.

And a September survey of regional tech companies by Saint John-based industry group TechImpact found nearly half of respondents were ramping up hiring — although those figures include established businesses, not just startups.

But last month, data from Halifax early-stage VC fund Concrete Ventures showed that for the first time since general partner Patrick Hankinson began keeping records, net job creation among the region’s innovation-driven companies fell to almost zero in the third quarter.

Hankinson — who analyzes employment at Atlantic Canadian startups based on LinkedIn data — found that in the third quarter, Atlantic Canadian startups added a mere 16 new jobs, compared to 179 in the second quarter and 478 in the first quarter.

And earlier in the year, in July, Fredericton- and Miami-based Introhive, which just a year earlier had raised the largest equity funding round in New Brunswick history, announced it was laying off about 16 percent of its workforce in preparation for an anticipated recession.

“We’re focusing on more conservative growth until the recession, and then once the recession is over we’ll be pushing the pedal down again,” said CEO Jody Glidden at the time.

So far, Atlantic VC has weathered the industry downturn well.

Atlantic Canadian venture capital deals have so far mostly defied the industry’s global slide, as the region’s companies raised more money in the third quarter than in either of the two prior, according to data released in late November by the Canadian Venture Capital and Private Equity Association.

The organization’s Canadian Venture Capital Market Overview found that Atlantic Canadian companies raised $76 million this quarter, compared to $51 million last quarter and $64 million in Q1.

Two provinces, Newfoundland and Labrador and New Brunswick, radically outperformed not just their previous quarters, but their entire first half, raising $25 million and $40 million, respectively. In the first half, Newfoundland companies raised $11 million and New Brunswick startups raised $23 million.

Nationally, the venture capital markets had their worst quarter so far this year, with startups raising a paltry $896 million from 144 deals, compared to $1.65 billion in the second quarter and $4.5 billion in the first, making the apparent resilience of Atlantic Canadian markets particularly notable.

When Britain's leading global affairs magazine, The Economist, hosted its World Ocean Tech and Innovation Summit at the Halifax Convention Centre in October, Clearwater Seafoods Co-Founder John Risley offered some advice to entrepreneurs about weathering the VC downturn. He said now more than ever, entrepreneurs who are “technocrats” more than salespeople need to find a co-founder with good soft skills.

"The consequence of capital being more difficult to find will be that better quality businesses will get supported, and ones that probably didn't have a particularly good chance of succeeding won't," he said.

"And that is really down to the people skills of the founding entrepreneurs. How good are they at communicating? How good are they at selling their ideas?"