Waterloo Tech Highlights for September 2020 

Our goal is to provide you with a monthly primer on significant news events from private Waterloo-based technology companies in 5 minutes or less. 

ApplyBoard raised an additional C$70M and announced a partnership with ETS, the testing company.  Other investors included Index Ventures, Blue Cloud Ventures, Harmonic and others.

Acerta raised US$7M in a funding round from OMERS Ventures, M12, StandUp Ventures, Radical Ventures, EDC and Techstars.

Clearpath Robotics raised an additional C$6.6M from McRock Capital in an extension of their earlier $40M raise announced in June.

Brink Bionics raised C$350k in seed funding from RiSC Capital and Hello Ventures.

Water Refined pivoted to create a powerful yet safe COVID disinfectant for use in public spaces, recently receiving an FDA DIN Number required to sell.

Plum customer ScotiaBank eliminated resumes and switched to hiring graduates with Plum profiles instead.  Plum also added Tata Steel as a global enterprise customer.

KA Imaging received FDA 510(k) clearance and Health Canada approval for their dual energy X-Ray device and started a C-19 trial at a cancer center in Toronto.

Grobo is now shipping to Europe.

RideCo now operates on-demand transit for the City of Houston.  They have four of the ten largest cities in the US and Canada.

TextNow hired Andrew Shin as their new head of Engineering.

Bartesian has a happy new customer.  This TikTok video has over 3M views.

Emmetros launched a new version of SparxConnect, enabling communication with care workers who span multiple organizations.

The Globe and Mail released their ranking of Canada's fastest growing companies.  Local mentions include TruLocal (#14), Encircle (#33), Intellijoint (#37), Voltera (#74), ThinkLP (#96), Smile (#121), eleven-x (#256), Bridgit (#274), Miovision (#311), and TextNow (#369).

Chris’ Thoughts

COVID's Silver Linings

One of my daughters helps source stories for this newsletter.  She is trying to assemble 19 great COVID stories that speak to hope and transformation.  Stories of people, who either because or in spite of COVID have made themselves or their world significantly better than it was before.  If you know of any great stories you think should be told, she would love to hear about them.

Truth and Accountability

A couple months ago I wrote that over 80% of the UW Software students were going to the USA.  A few asked me for data to support this.  I admit to sloppy editing and it appears that fewer of our grads will move to California this year.  I was incorrect.  So let's look at some recent data and discuss the implications for the state of entrepreneurship in Canada. 

Three recent studies to point out:

First the Waterloo Software Engineering Class of 2020 survey taken in May after the COVID lockdowns changed everything says that 84% of their class plans to work in the USA and 16% in Canada. More surprising to me, the median first year base compensation lands at $98k for Canadian jobs and $180k for the American ones (both amounts in $CAD).  That's a tough hill for Canadian tech companies to climb to attract the best of the best.

Then the UW Systems Class of 2020 survey has 45% of the class taking a job in the US.  The salary gap remains - $72.5k for Canadian jobs and $161k for US ones (all in CAD).  From these two surveys, it appears that American jobs pay about 100% more than Canadian ones.  Factoring in extras like signing bonuses, equity, relocation and perks, the gap is actually higher.

Finally, Rob Darling looked at LinkedIn profiles of UW grads from the classes of 2017-2019 for CS, Computer, Software, Systems, Electrical and Mechatronics Engineering.  He found that 38% of them are currently working in the US with the Computer Science class bringing down the average (31% in the USA) and the Software Engineers bringing it up (62% in the USA).

People almost always behave rationally.  I've seen salespeople do crazy things to maximize their comp plans, even working against corporate interests. So why do so few software graduates from Waterloo stay in Canada and start companies?

If you could make over $150k per year, how much would you give up and for how long to have a ~10% chance at a $5M payday?  After ten years making $75k that's over $750k of opportunity cost.  Does wage inflation and higher public market valuations lead to more attractive startup valuations? It's probably a problem that solves itself over time as supply-demand imbalances even out, and all those additional Computer Science kids graduate.  In the meantime, I'd love to work out how to create incentives to encourage more of the best and brightest to stay and work as entrepreneurs or improve our scaling companies.

Moving On

While the stories here focus on companies instead of ecosystem, I want to acknowledge Paul Salvini's time running the Accelerator Center as it comes to an end.  Quietly letting tenants take all the credit and providing service befitting a start-up has been exactly what scaling companies in this region need.  He's been a quiet helper for many, myself included.  Thank you Paul.

Waterloo Tech Highlights is a communication initiative run by a group of experienced investors and strategists who would like to receive and share real news about the vibrant Waterloo, Ontario tech community.

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Chris Wormald @cwormald