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TMX POV - The Emergence of the Alberta Innovation Economy

February 18, 2020

A few years ago it might have been unthinkable to be hosting a tech investor day in Calgary, but just last week Toronto Stock Exchange (TSX) hosted its inaugural Calgary Tech Investor Day to highlight the work being done by both public and private companies. The event featured a great turnout, generating lots of enthusiasm and interest, which comes as no surprise given Calgary's rise as one of the hottest regions for producing innovation companies in Canada.

The diversity of Alberta's tech companies was on full display at our Investor Day, where we featured organizations like Quorom Information Technologies Inc. (TSXV:QIS), a SaaS company that provides a portfolio of software and services to automotive dealerships, and Orpyx Medical Technologies Inc., a medtech company that developed insoles to help people with diabetes better manage their feet. (A full list of presenting companies can be found below.)

TSX and TSX Venture Exchange (TSXV) have seen tremendous growth in terms of companies utilizing the public markets to help support their growth. The total market cap of Alberta-based innovation companies has nearly doubled over the last five years on TSX & TSXV, for a current total of $10 billion. Comprised of 44 companies across multiple industries, innovation companies in Alberta have tapped the public markets to raise $1.3 billion in equity capital over the last five years.

While a $10 billion market cap is impressive, some success stories aren't even included in this statistic. One company that's unaccounted for is tech unicorn Shareworks by Morgan Stanley (previously known as Solium Capital), a SaaS company that helps companies manage their employee stock options and cap tables. Solium Capital originally listed on TSXV in 2001, utilizing public capital markets to raise $2.3 million. Their growth through public capital markets eventually garnered the attention of Morgan Stanley, which subsequently purchased Solium last year in a transaction that valued the company at $1.1 billion CAD.

Solium's story is just one of many, as an increasing number of groups are starting to take notice of opportunities in the Alberta region. Just recently, The National Angel Capital Organization (NACO), a group committed to advancing the early-stage entrepreneurial ecosystem in Canada, announced that they were opening a Western Canada Regional Headquarters to foster growth in the region.

Calgary's venture capital community raised $134 million last year, a strong showing that landed them on the PwC Money Tree report as one of the top cities for funding in 2019. One positive takeaway I found from the report is that early/seed stage deals made up 50% of Calgary's funding round in H2 2019, which bodes well for helping to create future tech unicorns in the region. This is particularly important as tax credit cuts may hurt early-stage tech companies in the near future.

As Calgary shifts focus on developing an innovative and business-friendly environment, and with 27% of degree completions at post-secondary institutions coming from STEM programs, I believe Alberta is well underway in laying the foundation for what could be a transformative decade for the region's innovation economy.

 

List of Presenting Companies:

Public Companies

Flurotech (TSXV:TEST): FluroTech is a cannabis and hemp testing technology organization headquartered in Calgary, Canada. Our mission is to create tech that maximizes safety and quality for both our clients and consumers.

OneSoft Solutions Inc. (TSXV:OSS): OneSoft Solutions Inc. is a provider of software solutions for select markets, all of which are developed using Microsoft's new Cloud technologies. Our mission is to acquire, manage and build next-generation software businesses that will provide specialized, mission-critical cloud software solutions to address customer needs. We have a proven track record of innovation, and are now implementing strategies which we believe will provide our customers with revolutionary software and benefits, and our shareholders with exceptional returns.

Quorum Information Technologies Inc. (TSXV:QIS): Quorum is a North American company focused on driving dealerships' revenue through developing, marketing, implementing and supporting its portfolio of software and services for automotive dealerships.

 

Private Companies

Ambyint: Ambyint has been delivering best-in-class artificial lift optimization solutions to E&P customers since 2004. The company was founded in Calgary, Alberta as Pumpwell Solutions with the mission to improve artificial lift performance and production by leveraging proprietary mathematics. Ambyint began selling its market-leading controllers and VFD packages to customers in Canada in 2006, and by 2012 was actively acquiring data, monitoring, and optimizing thousands of horizontal and vertical wells across Western Canada.

Blacksquare: Blacksquare provides direct to consumer turnkey marketing, operations, logistics, and distribution technology-enabled managed services, as well as ecommerce software as a service (SaaS) and data analytics.

Hoot Research: Provides executives, investors and brokers with user-friendly, fast, transparent, reliable, cost-effective tools and data.

Pandell: Pandell is a leader in delivering Software-as-a-Service (SaaS) products and services to 500+ energy companies in Canada and the United States.

Orpyx Medical Technologies: Orpyx® Medical Technologies Inc. empowers people with diabetes to maintain mobility. The company's core product line, the Orpyx SI Sensory Insoles with remote patient monitoring, helps manage and prevent diabetic foot ulcers and limb loss through advanced foot sensor technology and real-time analytics. Orpyx technology is also used by researchers to access clinical-grade plantar pressure data for health and human performance applications in the fields of sports medicine, therapeutic applications and footwear design.

ZayZoon: ZayZoon was created to end predatory lending. ZayZoon accomplishes this goal by partnering with payroll companies and employers to bring employees access to Early Wages On-Demand. ZayZoon's On-Demand access to wages has given employees control over their paycheck, reduced financial stress and eliminated the need to take on unnecessary debt.

Source: TSX Market Intelligence Group.


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Dani Lipkin

Innovation Sector Head 
Toronto Stock Exchange & TSX Venture Exchange


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