It’s been a banner year for tech companies in New Brunswick, one of the most active provinces when it comes to the number and value of venture capital deals.
Sonrai Security, which raised $18.5-million (U.S.) in a Series A funding round earlier this year, is one of the more high-profile examples with funding and research support from the New Brunswick Innovation Foundation (NBIF) when it came to attracting investments from inside and outside the province.
NBIF has been supporting these kinds of high-growth start-ups for nearly 20 years and is continuing the momentum of the province’s growing research and start-up community with a focus this year that will help them succeed on the global stage.
The organization’s 2019-2020 strategy will see the organization take an even more deliberate and active role with the companies and researchers they support.
On the research side, NBIF will be focusing on not only funding innovative research but helping bring that research into commercialization.
“Traditionally, NBIF has been a bit more on the side of research administration, cutting cheques, processing applications, but not so much working directly hand-in-hand with researchers,” says Laura Richard, director of research at NBIF.
“What we’ve been hearing when we’re going out talking to the community is cries for help from researchers trying to move the technology and innovations they’re developing out of the academic environment. Meaning into a place where they’re being used and developed into things you could buy on shelves and new technologies that increase their manufacturing capabilities. What we see as our goal with this strategy is helping researchers bridge that gap.”
That means the NBIF team will be working more closely with the researchers they fund so they can help guide them in making those critical next steps.
“We want to be there beside them, helping them reach milestones, make contact in industry and be there working with them,” says Richard. “We have a lot of internal expertise on our team related around doing applied research … we have a lot we can offer the researchers to help them commercialize. We want to take advantage of that going forward.”
When it comes to investing, over the next two years, NBIF will be writing bigger cheques but to fewer companies.
“A lot of those are going to be follow-on investments in our current portfolio. I feel like from our venture capital buckets of funding, we are going to be more selective but give more money to companies we think can grow at a rapid rate,” says Ray Fitzpatrick, director of investments at NBIF.
“Before we would dole out smaller amounts of money to many companies, but it didn’t give them all the money that they needed to be successful. We’re trying to do away with that strategy and take on a bit more risk, by backing the companies that we believe have a chance to succeed.”
That doesn’t mean the province’s new start-ups will be left in the cold. Fitzpatrick says NBIF will continue making investments into new companies through its Startup Investment Fund.
“We’ll put in $100,000 to $200,000 into those companies,” he says. “We’ll probably do around six to eight of those this year. The criteria for adding those new start-up companies hasn’t changed either. We’re looking at the fundamentals which include the product, market team and, financials”.
This new approach will help allow NBIF to work more closely with the companies they are investing in to help them succeed.
We’re trying to take our personal experiences and what we’ve learned, plus the experience here at NBIF and hopefully add some value to the start-ups in our portfolio as opposed to just closing deals and cutting cheques,” says Fitzpatrick.
For Fitzpatrick, NBIF’s new strategy shows the maturing of New Brunswick’s start-up and research ecosystem. What was once a scene of many new, early-stage companies and entrepreneurs, is now producing ventures that are making a global impact.
“We felt we had a pretty big portfolio and we had seeded quite a few companies,” he says. “Now, it’s time to put the money into them to help them grow.”
NBIF’s track record of success bodes well for the new strategy that builds upon what’s already worked well for the organization. NBIF and Fredericton-based Envenio were recently awarded a 2019 Regional Impact Award by the Canadian Venture Capital Private Equity Association (CVCA), the national professional association for the venture capital and private equity industry.
Just as plants have now sprouted from seeds with summer upon us, companies like Fredericton-based eChart are ready for their next growth cycle with support from investors like NBIF, which contributed $200,000 to the company’s latest funding round.
“The long-term care software market is expected to grow to $5.6-billion (U.S.) by 2026,” said Fitzpatrick. “eChart Healthcare is well poised to succeed in this fast-growing market.”
Keep an eye on NBIF’s news page for more announcements like this on the horizon.
This story was the first in a series of ongoing stories sponsored by NBIF.