Joe Timlin of CIBC Innovation Banking talks about states that are punching above their weight.
Less than a decade ago, Alberta's global reputation had little to do with the province's tech ecosystem, but according to Joe Timlin, managing director of CIBC Innovation Banking, the province is quickly emerging as a key destination for investment and influence.
“The ecosystem has matured and we've had a lot of well-known venture capital and private equity firms make their first investments in Alberta, and now I think they're realizing the opportunity there and want to invest further,” Timlin told BetaKit.
Once known for its oil and gas industry, Alberta now boasts a network of more than 3,000 technology companies. This growth, combined with an influx of global capital and a growing reputation in artificial intelligence, has made Alberta an increasingly popular tech destination.
For Timlin, this signals the beginning of a tech ecosystem that, while still young, has the power to carve out a place for itself in the global tech space.
A region rich in trade
Looking at Alberta's ecosystem from a deal perspective, the province is certainly booming: According to the Canadian Venture Capital & Private Equity Association, Alberta companies raised a total of $707 million across 86 deals in 2023.
That's actually down slightly from the previous year, but Timlin noted that Alberta has consistently performed well compared to the rest of Canada. The robust deal activity looks set to continue into 2024, with Timlin noting that the last four deals in Western Canada took place in Edmonton.
“These are top-tier technology investors coming north of the border to raise capital on a large scale.”
Joe Timlin
“Alberta raised almost $1 billion of the $7 billion in venture capital and private equity that was pumped into the whole of Canada last year, so on a per capita basis we're definitely punching above our weight,” he added.
CIBC Innovation Banking is a leader in providing non-dilutive capital in the province, offering start-ups both support and alternatives to equity financing.
Alberta is home to some of Canada's top venture firms, including Innovia Capital, BDC, Pender, Yaletown Partners and Panache Ventures.
But perhaps the most striking development has been the influx of global capital into Alberta companies, with companies like Benevity, Jobber and Neo Financial attracting investment from big names like General Atlantic, JMI, Sageview and the Peter Thiel-backed Valor Ventures.
“These are top tier technology investors coming north of the border to raise capital on a large scale,” Timlin said.
“The success and scale of Jobber and Benevity in particular shows there's nothing we can't do in Alberta,” he added.
AI positions Alberta as a global player
AI remains at the forefront of tech conversations today, and Alberta has been quietly honing its expertise in the field for years. The University of Alberta is home to one of Canada's oldest and most important computing science faculties, and has contributed to both the theoretical foundations and practical applications of computing.
The Alberta Machine Intelligence Institute (Amii) is a standout player in Alberta's AI sector. As one of three Canadian centres of excellence in the pan-Canadian AI strategy, Amii not only advances world-class AI research but also plays a key role in translating scientific breakthroughs into real-world industrial applications.
The provincial government is also committed to making Alberta an AI powerhouse, allocating $30 million for AI as part of its 2022 innovation strategy. Alberta Innovates, the province's innovation corporation, also pumped $30 million into Amii last year.
Startups such as GeologicAI, PayShepherd, RetinaLogik and Mercator AI, all of which are leveraging artificial intelligence, have been actively closing deals in recent years.
“In Alberta, we're really committed to bringing machine learning to market, particularly AI and machine vision,” Timlin added.
Young but a sign of success
Alberta has been home to numerous grassroots ecosystem support organizations for many years, Edmonton is the birthplace of Startup TNT, now a pan-Western Canada angel investment conference, and Calgary's Innovation Week and Launch Party is an annual event showcasing the breadth and depth of Calgary's tech sector.
“Everything is in place for Alberta to get there. I don't think there's anything that's going to stop them.”
Other events in Alberta, including the Banff Venture Forum, the Alberta Venture Capital Association's ski conference and the upcoming InVenture Conference, are all aimed at creating unity and sparking conflict between the province's startups and investors.
“A lot of the innovation, especially the team building, is happening at this quasi-social level,” Timlin says. “Behind these events, venture capitalists and private equity investors show up a day or two early and stay a day or two late, scouring Alberta for investable opportunities.”
Although Alberta's tech ecosystem is maturing, Timlin believes it is still an emerging market, and one of the key challenges identified is the relative shortage of senior-level talent in the region compared to more established tech hubs such as Vancouver and Toronto.
“It takes special talent to grow a company from $10 million ARR to $100 million to hundreds of millions, and that's incredibly hard to accomplish when everyone in the company is in the biggest job of their life,” he added.
But the problem may be resolving itself given the province's recent success in attracting talent: its “Alberta is Calling” campaign attracted more than 17,000 people from other parts of the country between July and September 2023. Alberta is one of the few provinces in Canada that is attracting new residents.
While Alberta is seeing a rise in anchor companies and new talent, Timlin said the province recently joined a list of Canadian tech regions that can claim to have homegrown unicorn companies and ancillary services talent, such as legal and accounting, to support continued growth and success.
“There aren't any big private equity or IPO exits in this market yet, but everything is in place for Alberta to get there,” Timlin added. “I don't think there's anything that's going to hold them back.”
Feature image courtesy of Kelly Hofer on Unsplash/BetaKit Illustration.
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