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Venture capital & Manitoba’s tech sector

Putting money where it matters

Buy low, sell high. High risk, high reward. Pretty simple concepts, right? 

But like most things, the deeper you look into something the more complicated it gets. The Manitoba Government has announced a venture capital (VC) fund to help spur investment in the province and it is another strong indication that the province is positioning for growth. 

Getting in the game
Startup TNT is one organization helping to educate potential investors and make investing a social experience. Gloria Thom, from the Manitoba branch of Startup TNT, explains how their organization works to connect potential investors with companies seeking funding. 

“We really work to educate people on why investing in this asset class is really important. We want to make this type of investing, essentially angel investing, enjoyable and approachable for our accredited individuals who really care about building and investing into their own communities and seeing strong economic development happening in their own backyards,” says Thom. 

Angel investors and venture capitalists are injecting money directly into startups and growing businesses in exchange for promises of future wealth. In Manitoba, there have been investment funds operating for decades, but the growth of organizations investing in technology has looked to keep pace with the growth of the new technology ecosystem itself. This presents a lot of opportunities for people to get involved in investing in tech specifically and investment in general. 

Grant Kook, President, CEO and founder of Westcap Mgt. Ltd., the fund manager of Retail Venture Capital (RVC) Fund Golden Opportunities Fund Inc., took a proven formula for VC investment in Saskatchewan and helped bring it to Manitoba almost 14 years ago. “We started Golden Opportunities in Saskatchewan 24 years ago,” says Kook. “Following our success in Saskatchewan, the Manitoba government of the day asked if Westcap would bring our experience and product into Manitoba. Now, Golden Opportunities is available in both Saskatchewan and Manitoba and the fund has grown to approximately $400 million in terms of assets.”

Testing the waters
How can we de-risk investing in technology and help the Manitoba tech ecosystem continue to grow? 

Thom suggests a good starting point is an informal get together Startup TNT hosts for potential companies and investors. “We’ve been doing our TNT—which stands for Thursday night tradition, by the way—in Winnipeg now, for exactly 27 weeks,” says Thom. “These happy hours allow entrepreneurs to get together in just a casual networking setting to share their stories of what they’ve been up to, the highs and the lows or just blow off some steam and take a break with other people that are going through some of the same things,” she says. 

Once a company is a little further along it is likely a great time to engage with Golden Opportunities. “We always have time to listen to entrepreneurs and engage at various stages of a company’s life cycle,” says Kook. “This includes Series A, VC, growth capital and mature companies that are succession planning and seeking transition of ownership to the next generation. We’re from the Prairies, and we invest in companies and people from the Prairies.  As we engage and hear local stories, we are able to identify opportunities where we are aligned and become partners.” When investing in these companies, Westcap provides more than capital—offering value through strategic guidance, governance, and networks as well.  

Growing up
It’s an exciting time in the province for investment. There have been several huge deals and some amazing companies getting started in the province—and the ecosystem is ripe for further growth. 

Grant Kook points to Librestream Technologies Inc., a local technology company based in Winnipeg which Golden Opportunities added to its portfolio in 2016, as just one example of what can happen when a company receives the right investment at the right time. Librestream Technologies innovated the world’s first augmented reality remote expert solution, and today the company has grown to be a leading provider of augmented reality and remote collaboration solutions with Fortune 2000 customers with aggregate annual revenues of $3.2T using its Onsight augmented reality platform. “In today’s tech market, as tech stocks and tech funds do a little bit of pullback, it’s important that these companies have enough capital to get through ups and downs in the market and this company is well-positioned.” 

“For people that are looking at this from a risk perspective—take a look at what the government is doing. Look at what the banks are doing. Look at RBCx, look at BDC and how they’re starting to really recognize the role that they play in helping to make sure that these companies are able to grow legs and get off the ground,” says Thom. “I think both of those things from a government and banking perspective, should give some comfort around the fact that this is a place where you want to start putting some money down.”

Shining a light
Manitoba also makes its mark nationally in the Canadian tech space and that should not go unnoticed. 

“From a company perspective, I think sometimes people forget that companies like Callia Flowers, Neo Financial, and GoOil were born in Manitoba. GoOil is currently the fastest growing company of its kind in Canada with a very ambitious growth-minded founder at the helm,” says Thom.

“One of the sector’s biggest successes this year, and something we’re all excited for, is the infrastructure that’s ramping up to support Manitoba’s startups. Between the province’s announcement for a VC fund, StartUp TNT coming to Winnipeg, North Forge’s Angel Network, and Manitoba’s Women in Tech Meetup Group (a collaboration between Tech Manitoba, New Media Manitoba, and North Forge), which recently formalized support from BDC, we have funding options and supports that benefit Manitoba companies. The next year is really going to showcase how our companies are taking advantage of these new resources, and I expect announcements highlighting the record-breaking year for capital raised,” says Kelly Fournel, CEO of Tech Manitoba.

It’s not just industry diving deeper into tech investment and growth. 

“I think we’re on a great path to ensuring that we have a really strong, strategic partnership with the University of Manitoba,” says Thom. “I’ll be going to their next open house for their Faculty of Science and speaking to some of their students that are just starting down their entrepreneurial journey and giving them some guidance and education around how to pursue angel investment.”

Down the road
The newly announced Manitoba government-backed VC fund is another great step according to Kook. “This is a tremendous initiative by the current Manitoba government as they recognize and want to fuel more access to patient equity capital to further support local, small and medium-sized businesses,” he says. “In terms of capital, the Manitoba ecosystem hasn’t been as well developed for some time. That’s one of the key reasons why we entered Manitoba. We continue to believe that there are significant opportunities to support small and medium-sized businesses in the province. Anytime you can create a more mature capital ecosystem it’s better for everybody.”

Manitoba is a province on the cusp of tremendous opportunity, and the collaboration of government, industry, capital and educational institutes is going to drive business growth.

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