Technology for resource-based industries like mining, oil and gas, or forestry have reached the point where technology solutions are continuously improving the efficiency, accuracy, communications, and more on a daily basis. BC’s resource focused tech sector has the potential to attract significant investment to the province, further boosting both sector’s economic impact. However, one of the biggest challenges continues to be attracting sufficient investment facilitating the broad growth of early stage companies.
New government initiatives are likely to help address this problem: We are excited to see the effect of new initiatives announced by the provincial and federal governments on investment activity in BC!
The State of BC’s Tech Sector
We’ve reached an age in which technology is everywhere. From our desktop computers to the mini-computers in our pockets, technology has become an intrinsic part of our everyday lives. While this is true on a personal level, it seems that more and more, this is true on a professional level as well.
In the past, technology was a business tool. Today, it is the business.
The innovative solutions that technology creates supports the growth of a more competitive economy. The state of investment in BC must be focused to allow technology that supports backbone industries in the province to continue growing as critical economic drivers, employers, and broad based contributors to the economy. This year’s first-ever BC Tech Summit is proof of the important role the tech industry plays in the economy.
There is a healthy network of angel investment in the province, providing early seed rounds to new startups and encouraging the development of the sector. But venture capital investment, which is crucial to growth beyond the startup stage, has been deficient and in decline in BC in recent years, according to the 2014 Technology Report Card published by KPMG and BCTIA.
Access to Investment
Access to capital for early stage firms is a challenge that continues to plague the startup community in B.C. This is in stark contrast to the access to capital opportunities for companies located in places such as Silicon Valley, New York, and other forward-planning economic ecosystems. However, with the appropriate support, it’s today’s startups that will become the next Hootsuite or Electronic Arts. While many established companies have been able to secure funding, early stage companies continue to face funding challenges. The lack of access to local capital sources also increases the likelihood that a company relocates outside of BC and becomes successful elsewhere.
The recently announced $100M BC tech fund proposed by the provincial government, along with the federal government’s $50M fund to boost small-business exports, should greatly contribute to investment opportunities in the province’s tech sector. The province has developed a BC tech strategy, aiming to help the sector’s growth, with the tech fund being one of three main pillars. The federal government’s fund will be used to help small and medium sized enterprises (SMEs) offset up to 50% of costs when seeking to expand their business internationally.
The federal Liberal election platform called for a new plan for Canada’s environment and economy that would also commit to investing $200M annually to create sector-specific strategies for developing innovative, clean technologies in resource-based industries like forestry, mining, agriculture, and energy. An additional $100M per year will be invested in organizations that support the development of cleantech firms.
It’s with much anticipation that the technology industry awaits details regarding these new government initiatives proposed to inject capital into the tech economy. There is tremendous hope that a significant allocation will be provided to startup organizations.
Developing a More Competitive Economy
The Alacrity Foundation has a deep history rooted in tech and innovation. With almost 40 years of investment experience prior to founding Alacrity in 2009, we’ve worked with numerous companies in all areas of technology and across sectors to strengthen the local economy. We are looking forward to supporting these new initiatives and are especially excited for the potential they could help unlock!
Since inception, we’ve used our extensive network of colleagues and peers to help attract significant angel and venture capital investment to BC tech companies. Using the knowledge and experience of the market, Alacrity’s advisors have also helped entrepreneurs create companies that fill a gap or need. Others have joined Alacrity through our Investor Readiness Program, focused on helping these established companies ready themselves for investment.
Additionally, we encourage our portfolio of companies, including Referral SaaSquatch, Echosec, and Tutela Technologies, to participate in the greater tech community. To that end, numerous representatives from Alacrity Foundation and participant companies will be attending the BC Tech Summit to increase their awareness of activity within the ever-broadening technology community and to share information about themselves with others.
By working with entrepreneurs in information and communications technology, cleantech, and life science domains, we have the potential to support the creation of innovative tech solutions that can be applied in a wide variety of areas. These solutions will increase the effectiveness of companies across many fields, thus strengthening the economy overall and helping to put BC on the global technology map.