Technology community: Tracking Ottawa's evolution

An autonomous pod from Aurrigo parks near a mobile dummy at Ottawa's newly rebranded Area X.O autonomous vehicle test track. PHOTO BY DAVID KAWAI

Tracking Ottawa's evolution to a 'software town'

The way Nick Quain sees it, anyone looking to chart the future of Ottawa tech simply needs to track the flood of venture capital into the city since the start of 2021.

While other businesses across the region were reeling from the pandemic, a new generation of software firms in sectors that were barely on local entrepreneurs’ radar during Ottawa’s original telecom boom – areas like e-commerce, cybersecurity, logistics and health-tech – have attracted the kind of eye-popping VC deals not seen since those heady days of the late 1990s and early 2000s.

“You’re starting to see the transformation becoming complete of Ottawa becoming a software town,” says Quain, the vice-president of venture development at Invest Ottawa.

As head of the local economic development agency’s incubator and scaleup programs for the past four years, Quain has had a front-row seat to witness the rise of a new kind of tech startup.

These aren’t your father’s budding unicorns. Unlike the hardware companies that fuelled the dot-com boom two decades ago, these startups – think last-mile delivery provider GoFor or online health-care platform Fullscript – specialize in software that’s underpinning an increasingly interconnected world in which the internet touches every aspect of our daily lives.

“They’re not telcom, Kanata-based companies,” Quain says, noting Silicon Valley North’s centre of gravity has shifted from its traditional base thanks to an emerging group of young founders who prefer

to live and work downtown. “They’re Ottawa-based software companies.” As even a casual observer of the local tech scene knows, Ottawa’s evolution from a hardware to a software town didn’t happen overnight. The shift really began more than a decade ago and accelerated as Shopify steadily grew into an e-commerce behemoth, inspiring a new generation of tech visionaries to launch their own software enterprises. Their efforts are now bearing fruit, with investors pouring more than half a billion dollars into local startups over the past 12 months. Quain and others believe it’s the start of a trend that will only accelerate in the years to come. “The funding is there, the NICK QUAIN incubators are there,” says Jason Flick, who sold his Kanata software firm, You.i TV, to Warner Media last year for more than US$100 million. “I feel like now we’re back to the heyday of lots of startups.” Surveying the local tech landscape, Flick likes what he sees. Shopify shined a spotlight on e-commerce, triggering a wave of new local companies aimed at solving pain points for a new class of online merchants. Already gaining traction before the pandemic, those startups have seen their growth shift into overdrive amid the pandemic-fuelled e-commerce boom.

Rewind, for example, which backs up data for online storefronts and services such as QuickBooks, has scored nearly $100 million in fresh equity in 2021 alone. Meanwhile, online bug detection platform Noibu saw its revenues soar nearly 600 per cent year-over-year in 2020. “If you look at their platforms and their market opportunity size, there’s a whole whack of Shopifys in there,” Flick says. “Hopefully those create some new areas and markets for us.” Quain agrees, pointing to GoFor and fellow Ottawa-based delivery startup Trexity as examples of local businesses catering to the other end of the e-commerce chain that are coming into their own. “We’re sitting in the shadow of the Shopify mafia,” he says. “Where’s a better place in the world to figure out the next tech-enabled e-commerce software company?” At the same time, Flick and Quain say Ottawa is poised to help drive innovation in another one of technology’s next great frontiers: autonomous vehicles. Some of the industry’s biggest players, such as Accenture, BlackBerry QNX, Ericsson, Microsoft and Nokia, are working with local firms SmartCone, SMATS Traffic Solutions and others to test high-tech sensors, drones and other smart-city infrastructure at Area X.O, a 16-kilometre network of roads in the city’s south end. While Flick is bullish on self-driving cars, he thinks Ottawa has the potential to carve out a lucrative niche as a drone development hub. “To me, I think drones are going to be just another part of society like planes and cars,” he says. “There’s so much to be done there.” With features such as mobile dummy test targets that simulate real-world interactions between driverless cars, pedestrians and cyclists as well as farmland where the latest in self-driving tractors are put through their paces, Area X.O could put Ottawa in a prime position to steer the future course of AV tech, Quain says. “It really is a smart city playground,” he says. “It’s not just there to test how a vehicle can speak to a network.” The next few years will also see a rapidly emerging new crop of female founders make their mark on Ottawa tech, Quain adds. Initiatives such as SheBoot, a bootcamp for women founders, and Backbone Angels, an early-stage VC fund backed by past and present Shopify executives that’s aimed at startups helmed by women and non-binary founders, are helping to narrow the yawning gender gap in a traditionally male-dominated industry, he says. About one-third of the companies in Invest Ottawa’s accelerator program are led by women, up from 10 per cent a few years ago. Quain expects the number of female tech leaders in Ottawa to keep rising as women-led startups such as Growcer, Heirlume, Vaultt, Welbi and others inspire other would-be entrepreneurs to take the plunge. “I’m looking forward to seeing that balance out in the years ahead, and I think that’s just going to accelerate JASON FLICK with things like SheBoot and Backbone Angels right in our backyard,” he says. All in all, Flick says, the Ottawa tech industry’s best days are still to come. “We’ve got momentum now,” he says. “We have so much going for us.”