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Newfoundland and Labrador tech companies say being in the province, with co-operation between other businesses, is key to their success — and they believe big things are still to come.
CoLab Software was founded in 2017 by Adam Keating and Jeremy Andrews, two Memorial University engineering graduates who returned to the province after working for companies in Silicon Valley — the southern San Francisco Bay area.
The company has 180 employees with plans to grow to around 300 by the end of the year.
“We started to realize that it’s possible to build anywhere. And the second part is, we actually just felt we had a much better competitive advantage building at home because people wanted to join,” CEO and co-founder Adam Keating told CBC News.
He said they’d be just one of a million companies trying to launch in California, but they are unique in Newfoundland and Labrador.
“We’re incredibly proud now that we made that choice. Even if the flights are a little difficult getting in and out of the province, it is a really special part of what we do,” Keating said.
CoLab is “ambitiously Canadian,” he said, and matches the ambition found in Silicon Valley, adding a number of local companies realized they can also compete on a global level.
CoLab was ranked the 57th fastest growing company in all of North America by Deloitte Technology Fast 500 last year.
“My goal is actually for Newfoundland and Labrador to raise more money than all of Atlantic Canada, maybe eastern Canada. Keep going. Why not? It’s totally possible to keep doing that and playing our size,” he said.
Keating said he’s optimistic about the future of the province’s tech sector, and expects two to four new Verafin-size companies in the province in the next five years, followed by a “whole batch” after that.
In 2020, the online security and anti-fraud company Verafin was acquired by Nasdaq in a $2.75 billion US deal. The success of the locally grown company kickstarted years of speculation on what the next big company could be.
WATCH | There tends to be a lot of connection between people that helps them learn from each other:
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Success with investments
Pelorus Venture Capital founding partner and president Chris Moyer said it took the right ingredients to create a vibrant tech sector in the province, pointing to Killick Capital investor Mark Dobbin and Memorial University’s Genesis Centre, as well as mentorship, competition and collaboration amongst companies.
“We’ve seen it over and over again that the entrepreneurs, along with the right amount of capital, along with the right amount of mentorship and guidance can build world-class companies in St. John’s and the rest of Newfoundland and Labrador,” Moyer said.
The venture capital fund is heading into its third round of funding for local tech companies. So far, Moyer said they’ve been very successful.
“For every dollar our investors gave us … in that first fund, we’ve now given a dollar and a half back. That’s a tremendous success,” he said.
Pelorus Venture Capital’s Chris Moyer says there’s a number of unique factors that have helped N.L.’s tech sector. (CBC)
Initially there was skepticism that N.L. could create another Verafin because of the relative population size, he said.
“Now all of a sudden, there’s two more that are clearly on their way to be that type of company,” he said, adding there are another few companies looking like they could also grow and investors are excited.
‘Talent density’
Brent Pretty, founder and CEO of AI financial advisor Verlo, previously worked for Verafin before leaving to launch his own company, which is currently onboarding their first customers with a plan to go live in early March.
He also chose to base his company in St. John’s, in part, because of his family.
“Ultimately, it’s an easy decision not to move because Newfoundland is an incredible place with a lot of talent,” Pretty said.
Verlo’s Brent Pretty says it can be hard for a small company to compete for talented hires. (CBC)
However, despite what he describes as the “talent density,” it can be challenging for a company of his size.
“There’s only so much talent to go around. There are only so many people you can hire, and Collab and Spellbook and Verafin are doing a fantastic job of hiring that talent,” Pretty said.
“So for smaller startups like ourselves, it’s a little harder these days to find … those diamonds in the rough, because everyone is kind of wise to it and everyone’s looking for the same talent pool.”
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