Federal government seeks to support Toronto’s tech ecosystem with $ 14.6 million in loans for six companies
Six Toronto-based tech companies receive cumulative loans of $ 14.6 million from the federal government.
Loans are made through FedDev Ontario, the regional development agency for southern Ontario. An announcement from FedDev Ontario says the agency seeks to strengthen Toronto as a key technology sector through these loans, as well as create the conditions for the growth of the post-pandemic economy.
Over the past few years, Toronto’s tech ecosystem has gained an international reputation and 2019 and 2020 has been ranked by CBRE as one of the largest and fastest growing technology markets in North America.
“What we’ve heard loud and clear is that the venture capital market is tight right now.”
However, the region experienced significantly reduced risk activity during the COVID-19 pandemic. According to Hockeystick’s Ecosystem Reports, which track technology deals by size and volume across regions, Toronto’s total funding fell to $ 213 million in the second quarter of 2020, very underperforming compared to previous quarters.
Despite this, more recent data from the Canadian Venture Capital and Private Equity Association found over the entire year, Toronto remained the most popular site of VC activity in 2020 with $ 1.2 billion out of 164 transactions.
“What we have heard loud and clear is that the venture capital market is tight at the moment, access is difficult,” Economic Development Minister Mélanie Joly told BetaKit in an interview.
“As the market opens up and there are more and more opportunities in the world for these companies, venture capital [firms] and banks are sometimes very risk-averse, ”she added. “This is [where we come] at stake because we’re the ones helping to mitigate some of the risk, being the first to fund and lend that money to these companies.
EnergyX Solutions is one of six companies that pledged funding. The company receives a loan of $ 500,000 to expand its customer base in North America and strengthen relationships with existing customers by increasing the automation and predictive analytics capabilities of its platform. EnergyX is a marketing automation company enabling energy suppliers to engage their customers in energy efficiency programs.
Sensibill, which offers financial tools and gives financial institutions personalized information to help their clients adopt healthier financial habits over the Internet, receives $ 2 million. This loan will support a three-year global expansion into European, Latin American and Asia-Pacific markets, which will allow the company to attract new business opportunities.
Last year, Sensibill raised $ 5 million in debt financing from CIBC Innovation Banking after downsizing. The startup attributed the layoffs to the pandemic.
Humi, which offers a human resources, payroll and benefits solution, receives a loan of $ 1.9 million that will help the company launch new platform features, expand its Canadian customer base and diversify into new global markets.
Kepler Communications receives $ 3.8 million to build a state-of-the-art nanosatellite manufacturing plant, making it the first Canadian company to mass-produce nanosatellites.
Nulogy is receiving $ 3.4 million to expand its supply chain management software platform, build capacity to support growth, and focus on export development activities.
Opus One Solutions secures $ 3 million to accelerate the commercialization of its advanced analytics software platform, GridOS, an AI-powered power grid management and optimization platform for utility companies.