Two lists of Canadian high-growth companies in the past few months have highlighted the fact that Atlantic Canada is still a long way from building tech companies with a truly national and global presence. However, the region is doing better than these lists – the Branham 250 and the Deloitte Fast 50 – would indicate.
Each year, the Montreal tech consultancy Branham Group produces a list of the 250 largest tech companies in Canada, based on revenue. The latest list doesn’t have a single East Coast company in the top 100. The regional leader is Mobia Technology Innovations of Dartmouth, which placed 115th with $32.2 million in annual sales. Others were: St. John’s-based Bluedrop Performance Learning (No. 126, with $23.4 million in sales); Fredericton’s PQA Testing (No. 180 with $10.1 million); and St. John’s-based Kracken Robotics (No. 231 with $3.5 million).
Then last month, the Deloitte Fast 50 was released without a single Atlantic Canadian representative. The global accountancy releases this annual list of the fastest-growing companies in Canada, based on three years of revenue data. The last Atlantic Canadian company on the list was STI Technologies of Halifax, which placed 41st in 2015. Since then: nada.
This poor showing matters because one of the credos of startup support organizations is that we’re out to build big companies, but we’re invisible when the big companies are recognized.
Atlantic Canadian companies do really well at the early stage stuff. (Just this weekend, I saw tweets saying Talem Health Analytics of Sydney has been accepted into the Hartford Insuretech accelerator in Connecticut, and Fredericton’s Beauceron Security pitched at the Demo Day of CyLon, a cybersecurity accelerator in London, England.) But the goal has always been to produce “unicorns”, which is techspeak for billion-dollar companies.
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The region is a lot closer to the Promised Land than these lists indicate. The problem is that dozens of Atlantic Canadian companies could be making these lists, but probably aren’t applying.
To make the Branham 250 this past year, a company needed annual sales of $1.7 million. I bet I could list 30 Atlantic Canadian IT companies that top that. Maybe 40.
The latest Deloitte Fast 50 is a bit more select. To be named to that list in 2018, a company needed three years of revenue history with total growth of 390 percent. A few years ago, we didn’t have enough established startups that could produce three years of sales history, but that’s not a factor any more. Lots of our high-growth companies left the pre-revenue stage since 2014. Is 390 percent growth over three years unattainable? Fahgettaboutit! Entrevestor’s data shows that one-fifth of the innovation companies in the region (about 100 companies) doubled revenues or better last year alone, and many of those companies have recurring revenues. Several companies could meet that threshold.
When I discussed the matter Friday with Ellen Farrell, business professor at St. Mary’s University, she said the region will eventually get bigger companies as the activity generated by exiting companies is fueling more growth. She added that applying for these competitions can be burdensome, which may discourage some companies. Yet, she wishes more companies would take the time to apply.
“If we do have companies that could apply and don’t, that’s a real shame,” she said. “I mean, we all want to revere them and worship them.”