Queen/King West : Innovation + Job News

"While nearly all high growth technology startups have historically emerged from no more than 3-4 startup ecosystems, namely Silicon Valley and Boston, this trend appears to have reached its end. Simultaneous with a global explosion of entrepreneurship has been an explosion in the rise of new startup ecosystems around the world, and a newfound maturity in others."

So begins a new report from the Startup Genome called the Startup Ecosystem Report (available for free online, though registration is required). And among those ecosystems that are currently flourishing: Toronto, which ranks the highest in Canada on the report's index, and eighth in the world. (Vancouver is right behind us in ninth; more surprisingly Waterloo is further behind, at sixteenth.)

All cities in the index are compared to Silicon Valley (which predictably is the benchmark first-place ecoysystem) across a variety of metrics. While we are similar to Silicon Valley in terms of our level of ambition, our technology adoption rates, our sector mix and mentorship support, one key area of difference, according to the report, is that "startups in Toronto receive 71% less funding than SV startups. The capital deficiency exists both before and after product market fit."

While that may sound like grim news, it actually provides a very useful roadmap for future growth. The report goes on to conclude that the current under-investment in Toronto-area startups "presents a large opportunity for investors. Moreover, "policy makers can help closing the funding gap by attracting late-stage venture funds through tax breaks and incentives, and investor-friendly policies."

Writer: Hamutal Dotan
Source: Startup Ecosystem Report

Steve Cosman was out travelling in Peru with some friends, and ran up against a very ordinary, very modern problem. Everyone had photographs of their trip, but they couldn't easily exchange them. It's a glitch many of us encounter on our own, even—without adding other people into the mix. We have photos on camera memory cards, on our phones, uploaded to our Facebook profiles, on old computers we haven't thrown out yet, all images we want to keep, often taken at the same time, but none of them in the same place or accessible in the same way.

Enter MyShoebox, a Toronto start-up that launched less than a month ago and has already racked up more than six million uploads.

MyShoebox is, as its name suggests, a virtual shoebox—a place where you can upload all your photos from any camera or device, search and flip through them easily, and store them securely. It's a way for people "to be able to unify their photo collections" to prevent them "becoming fragmented over multiple devices," explains co-founder Kalu Kalu. He and Cosman started MyShoebox in the hope of helping us make better use of our images as technologies multiply. The app is available for Windows, Mac, iOS and Androd operating systems, and provides free, unlimited storage for photos up to a certain resolution (1024 pixels). A pro version costs $5/month, allowing users to store photos at full resolution.

With several thousand people signed up already, MyShoebox is "definitely looking to hire," Kalu says. In particular, their current three person team is looking for engineers.

Writer: Hamutal Dotan
Source: Kalu Kalu, Co-founder and Chief Technology Officer, MyShoebox

Like many startups, Shopcastr is learning to roll with the punches.

Founder Matt O'Leary began his adventures in online shopping experimentation in July 2011, with an idea called Hipsell. His idea was to create a "beautiful shopping experience in the classified space"—essentially to "disrupt" existing sites like Kijiji and Craigslist and help users "unleash the power of [their] basements." What he quickly learned, however, is that the stock in people's basements runs out very quickly; it's retailers who have the capacity to meet ongoing consumer demand.

At least, they have the products to do so. Putting those products online, however, isn't the easiest task. Order satisfaction, suppy management, keeping listings updated—there are a host of new tasks that come with opening an online version of your shop, tasks which can be difficult and expensive for small retailers to manage. And so after conducting a series of customer-discovery interviews, O'Leary changed his approach and developed Shopcastr, a platform that enables small Toronto retailers to easily conduct online sales. He's racked up more than 600 participating stores so far, with the help of an initial $150,000 round of seed funding.

Now Shopcastr is planning to take its model of hyperlocal online shopping to new cities. They've just announced $1 million in new financing from a number of investors, including initial backer Mantella Venture Partners (MVP) and the MaRS Investment Accelerator Fund.

First on the expansion list: sites for New York and San Francisco, which O'Leary is aiming to do by the end of the year. His next Canadian target is Vancouver.

To accomodate this growth, Shopcastr is hiring, hoping to double their current staff complement of six within the year.

"We are in desperate need of some additional support on the tech side more than anything else," O'Leary says; they are looking for at least one more developer and some design talent to start in the coming months.

Writer: Hamutal Dotan
Source: Matt O'Leary, Founder & CEO, Shopcastr

Kobo last made headlines in November 2011, when it was sold to Japanese e-commerce giant Rakuten Inc. In its first major venture under new ownership, the Toronto-based eReader company is set to launch a self-publishing platform at the end of this month.

The venture, called Kobo Writing Life, aims to help writers manage their own publications more effectively, as well as retain a greater percentage of royalties than with competitors currently in the market. Writing Life will provide authors with real-time analytics and data to help them fine-tune their offerings, via a metrics dashboard; users will then be able to tweak specific elements, like cover art or price in individual markets, on the fly. Writers will receive 70 per cent of the royalties from any publications priced between $1.99 and $12.99, and 45 per cent from books priced outside of that range.

Mark Lefebvre, Kobo's director of publisher and author relations, told us that Writing Life began when Kobo asked writers "What can we do to make it easier, not only to get into the catalogue but to become more successful?" One key reply, he says, was provide more information: writers want to know how their publications are doing in as much detail as possible.

Lefebvre sees three kinds of writers especially benefiting from the new platform: what he calls "the Terry Fallises," who have fully developed works but can't get an agent or publisher; writers who have traditional publishers but have some pieces (say shorts stories or novellas) that don't fall into their usual type of writing; and writers who are already self-published in Canada and want to explore foreign markets.

Kobo began the project with just a "bare bones" staff, Lefebvre says. It's tripled over the past three months, with about 30 people in total working on Writing Life. The company is aggressively hiring staff to work both on Writing Life and other products; about 35 positions are currently open at the company.

Writer: Hamutal Dotan
Source: Mark Lefebvre, Director of Publisher and Author Relations, Kobo

Over the past year, innovative Queen-and-Spadina-based startup Shiny Ads has raised more than $1.36 million in capital and added two new staff members to its team, bringing its total number of employees to six.

Launched in January, 2010, the service offers an automated self-serve way for media companies to accept and serve small advertisers on online and mobile platforms. The company had grown to four staff by last March, when president Roy Pereira says the company raised $470,000 in capital to finance growth in a round led by Intertainment Media, Maple Leaf Angels and York Angels. That private fundraising triggered a $197,500 loan from the federal government agency FedDev Ontario. Pereira says that after receiving the money from FedDev, the company hired two new sales staff—bringing its sales team to three—to kick-start growth.

"We have subsequently raised another round this January of $700,000" from the original three private investors, Pereira says.

The next step is hiring two more software engineers.

"Our pipeline is better than it has ever been and we are closing larger premium publishers," says Pereira. "Overall, that gets us into a better place for a larger financing round later this year that will allow us to grow even faster."

Writer: Edward Keenan
Source: Roy Pereira, President, Shiny Ads

When Upverter officially launched its web-sharing software for hardware design at the prestigious Demo conference in fall 2011, the company went from 500 Beta users to 1,500 users in a single day. Now they're up to 3,500 "early adopter" users, says company co-founder and CEO Zak Homuth, as they plan to launch a second version of the software this spring.

In a nutshell, the product can be described as "Google Docs for hardware," allowing designers and engineers to collaborate on the web while designing machines and other real-world objects. "Building real things is really hard and it costs a lot," Homuth says. "We're trying to make that easier."

Homuth and his two co-founders were friends and roommates as engineering students at the University of Waterloo, when they decided to try to solve some of the field's problems by introducing the kind of team-sharing software that had already been introduced to office functions and software design. Homuth says the field of industrial design software was well-established and can cost tens of thousands of dollars, and perhaps because of its maturity as a software sector, it has been slower to see innovation.

The company got an early boost through a Silicon Valley residency at the Y Combinator incubator, but came home to Toronto to establish itself. "We came back for the talent," Homuth says. "The money goes three times as far, and we're hiring the same guys as the companies in the Valley hire, from the University of Waterloo and the University of Toronto, but we're offering them the city environment that they want, that feels like home."  The company has raised three rounds of funding so far, and expects to raise more revenue for a broader marketing push after the new version is launched this spring, likely in April.

Homuth says his team has grown from the three original founder to seven staff now, and expects that after the spring launch, the team will double in size.

Writer: Edward Keenan
Source: Zak Homuth, Founder and CEO, Upverter

Cisco is out recruiting 100 graduate-level engineering staff right now as part of a five-year expansion of R&D at its two Toronto locations and its location in Ottawa.

"We'd like to bring in as many people as quickly as we can," says Paul Howarth, the company's director of strategic initiatives. "We're out on campus now, hiring up to 100 people for this year."

In a recent announcement, the provincial government heralded its investment of $25 million in Cisco under a memorandum of understanding signed last year. The agreement will see 300 new jobs created in Ontario—a doubling of Cisco's R&D staff—with roughly half of those new hires working in the company's Scarborough and Liberty Village offices, according to Howarth. The move is a bounce back for Cisco, which had trimmed its Canadian workforce by five per cent last year as it focussed on its core activities in response to the global economic downturn.

Howarth says that the investment from the province is a key factor in the multinational company's decision to expand here. The favourable corporate tax regime alongside Ontario's stable economy are also factors.

"Aside from that, the key thing is access to talent. Toronto is a hotbed for software development. It may not be well known as such, but it is," he says, citing the concentration of top-tier universities in the area.

Writer: Edward Keenan
Source: Paul Howarth, Director of Strategic Initiatives, Cisco

When Yonge Street first wrote about Liberty Village-based solar startup Morgan Solar in 2010, it was big news that the company had secured $5 million in seed capital and landed a top-notch CEO. The innovative energy creators have grown since then, so much so that this month they announced they had raised an additional US$28.8 million in venture capital. The financing will expand Morgan Solar's production of its revolutionary Sun Simba lightweight panels, and expand its sales efforts.

Among the investors is Enbridge, the large natural gas utility, which has invested $10 million (US$9.8 million). According to a statement from Enbridge VP Chuck Szmurlo, this is the energy giant's first investment in solar technology.

"We’ve been excited for a long time about the potential for solar electricity, and we’re now pleased to help advance innovative ideas that will help reduce costs and enable the increasingly economic deployment of this emissions-free energy source. We look forward to playing a role in Morgan Solar’s growth."

The announcement caps a big year for Morgan Solar on the capital front. In May the company announced it had raised US$16.5 million.

Writer: Edward Keenan
Source: Emma Hemmingsen, communications manager, Morgan Solar Inc.

Toronto-based medical imaging innovators Tornado Medical Systems will receive $750,000 in financing from the provincial government's Health Technology Exchange (HTX) to commercialize its innovative breast cancer medical imaging technology.

In announcing the investment, HTX said the investment will help create jobs while allowing sharper diagnoses in breast cancer cases. Tornado's "world-class medical technology" should cut down the need for need for repeat surgeries.
 
The company was founded in 2009 as a partnership between Toronto's Sentinelle Medical Inc. and the Thunder Bay Regional Research Institute. Headquartered in Toronto, it now has offices in Thunder Bay and Ithica devoted to developing diagnostic medical imaging tools. By the start of this year, the company had grown to employ 20 people, and launched a wave of new hiring in February. The company is currently hiring more than 11 new staff, and is expected to continue growth as it commercializes its technology.
 
Dr. Stefan Larson, CEO of Tornado, said in a statement that the HTX funding would fund more technological development as well as clinical trials for the technology.
 
Writer: Edward Keenan
Sources: Stephanie Evans, Operations Manager, HTX; Thunder Bay Regional Health Sciences Centre

At the 2011 Ernst & Young Entrepreneur of the Year Awards last week, Toronto entrepreneur Razor Suleman was recognized in the business-to-business category for his company Achievers.

Founded originally in 2002 as I Love Rewards, Achievers offers client companies employee recognition software that allows peers and supervisors to give each other rewards for excellence in the workplace. The software employs social media-style tools to allow employees a platform to work together achieve organizational goals, and offers real world rewards for excellence.

"There is a significant demand for results-driven recognition solutions that offer more than that of traditional service awards," says Sarah-Beth Anders of Achievers. "The same stagnant rewards programs have existed since the 1940s, but Achievers is revolutionizing the industry with results-driven recognition tied with meaningful rewards."

Over the past year, the company has seen explosive growth, expanding from its Liberty Village offices to open a US location in San Francisco after raising $24.5 million in capital, according to Anders. The company also has an office in Boston. Across the three location, Achievers now employs 160 staff—double the number they did last year at this time. "We hope to double our number [again] within the next year," Anders says.

"The awards our company is recognized with—including Razor Suleman’s recent win as E&Y Entrepreneur of the Year in the B2B category—builds our brand and authenticates our success," Anders says in an email. "Receiving public acknowledgement helps to make our business reign top of mind among customers and prospects, and leads us that much closer to achieving our mission to change the way the world works." 

Writer: Edward Keenan
Source: Sarah-Beth Anders, Achievers

When Artez Interactive launched its service helping charities with online fundraising 12 years ago, the business was new and the concept untried. 

"When we started we never would have imagined how big it would become," says CEO and chairman James Appleyard. "Our first year, a charity we were working with raised $50,000 online and they were delighted. This year we've raised $100 million online for charities around the world."

The Toronto for-profit company has built an empire innovating for nonprofit clients, and now has offices in in the US, the UK, Australia and around the world. Recently it continued its tradition of pioneering when it was the first company to launch a fundraising application on Facebook's new Open Graph platform.  Open Graph allows third-party websites to publish user activity to Facebook, increasing the ways sites connect to Facebook.

Appleyard says that when the company helped define the concept of online fundraising at its launch, back in 2004, it developed a software product that could be customized and used by all charities. It has been refining and building on that same product as the online world has grown and evolved. "We invented the electronic tax receipt," he says, "and now those are used everywhere in the world. We invented the personal fundraising page, the first framework for fundraising on the iPhone and Android phones and now we're first to the table with Facebook Open Graph." Appleyard says the immediate future for the industry involves continuing to make fundraising easy across the "multi-channel online world... so that if you're a supporter, you can fundraise equally well using whatever tool you're using."

He says the constant innovation has led to constant growth for the company—at 50 staff, Appleyard says it's fair to say they've doubled the number of employees in the past three years. Artez has 10 open positions now, and expects to add another 20 new employees over the next 12 months.

Writer: Edward Keenan
Source: James Appleyard, CEO & chairman, Artez Interactive

"I started out to write a book about data literacy," says Pete Forde, co-founder and CTO of Toronto startup BuzzData, "to galvanize people to understand that data, as a democratic, free resource, could be used to create both good in the world and business value. That turned into a working principle." And that, says the web developer-turned-entrepreneur, turned into a company.

BuzzData, which had a soft launch roughly six weeks ago, sets out to allow people to share and work with data sets more effectively, improving on the traditional top-line presentation of spreadsheets and databases, while allowing direct and archived interaction between users. Already, with no formal marketing or advertising, the site has quietly attracted 1,800 core users to its free public version. These "data VIPs," as Forde calls them, are building a community the company hopes will demonstrate the utility of a premium collaboration product marketed to companies who work with data.

The project sprung out of a consulting job Forde and his firm Unspace were working on for an outside investor. He says their efforts began in earnest when a core team of three people, including co-founder and CEO Mark Opausky, started collaborating. Over the summer, BuzzData began hiring, staffing up its office near Queen and Spadina to employ 11 people. Their current staff size, Forde says, is expected to support the company as it scales up, with any future employment growth coming in customer support and logistics.

And the book? "You could say it's being written every day," Forde says. "There is still much to be written."

Writer: Edward Keenan
Source: Pete Forde, co-founder and CTO, BuzzData

Nulogy, headquartered near Queen and Bathurst in downtown Toronto, has received up to $954,687 in financing from the federal government through its economic development agency, FedDev Ontario. The company will use the money to finance global expansion, according to CEO Jason Tham, as it launches its consumer products packaging software PackShop. This summer's federal announcement came just months after Nulogy received $3 million in private financing from a group led by Klass Capital.

Nulogy was launched in 2002 by a group of Waterloo University graduates to provide software to the consumer packaged goods industry. It has since well established itself through its PackManager software. As Economic Development Minister Gary Goodyear said in his speech at the Nulogy headquarters, "Our contribution to this company will help them research, develop and bring their new PackShop software to market. This innovative software will allow retailers, marketers and manufactures to customize the packaging design of any product. Since 2006, the company has significantly increased revenues and demonstrated the potential for continued rapid growth."

Tham said that the expansion of the company will grow in alignment with its "Living and investing locally, while competing globally" philosophy, saying "Nulogy will use this financing to expand as we secure new customers and enter new markets around the world." The expansion is expected, according to FedDev Ontario, to create 40 full-time jobs.

Writer: Edward Keenan
Source: Nulogy; Gary Toft, Director of Communications, Office of the Honourable Gary Goodyear

Local startup LeanIn reached a significant milestone earlier this month when it was among 20 Canadian firms that made a trip to Silicon Valley for the C100"48 Hours In The Valley" pitch and mentorship conference. The event allowed LeanIn and the other companies to meet and pitch venture capitalists and mingle with mentors in the digital capital of the world.

"It was pretty awesome to go and hang around in San Francisco and Silicon Valley for a 48 hour period," says Luke Davies, president of LeanIn. "We got to meet  a lot of influential Canadians who live in the valley who are incented to help us...we met 100 or so new friends in the valley who have joined our support network."

LeanIn's technology allows users to use search and social media tools within videos. As Davies puts it, the product allows users to search within videos for specific scenes, and to share specific scenes within videos with their friends on social media. Davies says the motivation came when founder and CEO Hescham Ghazal, already a successful technology engineer, set out to "look at online video because it's a massive market, and it's broken." Davies says that one of the key "really cool" assets of the software is to provide companies with analytics based on how users interact with their video content at the scene level.

LeanIn was incubated at the Ryerson Digital Media Zone beginning in May of 2010, graduating from the space just last month. The software can be set up by creators within any of the major online video platforms within 10 minutes. The company has developed key partnerships Brightcove and YouTube, among other key video giants, though Davies says that parterships they are attempting to set up with social media companies such as Facebook and Twitter could be just as key to their success. Already, they have grown to six employees, and plans are afoot to hire another six. "We're incredibly resource restrained right now, like a lot of startups, everyone is incredibly overworked. I'm literally the dishwasher," says Davies. "But we're undergoing a fundraising round in the next few months and we expect to hire another six or so people--to essentially double our staff--soon after that."

Writer: Edward Keenan
Source: Luke Davies, President, LeanIn

Anyone with a mobile device will know that Flash animation--such a wonderful tool on the desktop--doesn't translate all that well to mobile devices. That very problem inspired Chris Brady to found his startup Animated Media in late 2008. "He saw that Flash was a good tool to create content but not a good tool to run content on anything besides a desktop," says Lisa Brady, Director of Marketing (and, incidentally, Chris Brady's spouse). 

Brady and his team developed a technology that allows Flash to run on a less than 1 gHz machine, and to run in native applications for mobile phones including the famously Flash-free iPhone. The recent rapid acceptance of the company's product in Europe and around the world recently drew notice from the provincial government, who labelled Animated media an "Ontario Success Story."

The company has grown, Lisa Brady says, to six employees (they added one just this spring), and she says they're "always looking for other talent." She says that for now the company's focus is continuing to market the product and pick up more traction in an international ecoomic environment that has, over the past few years, seen R&D budgets shrink. "The prospects are really good, but the process takes time. We're just six people trying to get the message out there."

Writer: Edward Keenan
Source: Lisa Brady, Director of Marketing, Animated Media