In Canada’s largest oil and gas producing province, investors who have been made wealthy by the energy sector are starting to open their pockets to a budding local tech industry.
For years, Alberta’s startup technology sector has complained of a lack of access to homegrown venture capital. Tech entrepreneurs in Alberta have historically had better luck going to Silicon Valley for funding than trying to raise money locally.
But that’s starting to change. Alberta’s tech sector broke an all-time record for venture capital investment in 2020, closing $455 million in deals.
And though full-year figures will not be publicly available until March, Alberta government figures show that as of September 2021, the province had already surpassed 2020’s record for venture capital dollars invested by 5.5 per cent.
“We’re waiting to get the final results for all of 2021, but it looks like it’s going to be a significant increase, with a new record,” said Doug Schweitzer, the province’s minister of jobs, economy and innovation.
Whatever the final dollar figure turns out to be, at least half of that funding will likely still have originated outside of the province, particularly from U.S.-based investors, said Zack Storms, founder of Startup TNT — an Edmonton-based non-profit that works to stimulate investment in the tech sector.
But Storms said a growing amount of the investment capital flowing into the province’s startups is locally generated.
“We are starting to see more Alberta investors,” Storms said. “There’s also a lot of new venture capital funds popping up. Local, homegrown and other Alberta VC funds — I think there’s more to be had there than I’ve ever seen.”
David Edmonds, who sits on the board of The A100 — a Calgary-based non-profit whose aim is to help the next generation of tech entrepreneurs thrive in Alberta — said for many years, high net-worth individuals in the province were hesitant to invest in the tech sector, preferring to invest in oil and gas and other more familiar industries.
But he said that has changed dramatically in a short period of time.
“It started a couple of years ago with certain family offices, as the next generation comes forward,” Edmonds said. “Three or four years ago, you could see that there was a sentiment shift toward the big companies — Amazon, Apple, etc. If you’re an investor watching trends, you see that you want to be part of that. And to be part of that, you have to do some portfolio mixing.”
“Tech is an untapped market. And in the past, (Alberta investors) have been scared,” said Ashif Mawji, an Edmonton-based partner with Rising Tide VC. “It’s been kind of ‘I see it, but I don’t understand it.'”
Mawji, who also invests privately, will launch a new Alberta-based venture fund next month. He said it’s significant that this time, much of the capital is coming from people without a tech background.
“These are folks who have made their money in construction, in real estate, in oil and gas. But they have the confidence now,” Mawji said. “Not to directly invest in a tech company yet, but they’re confident enough to go into a fund, where the risk is diversified.”
If confidence in Alberta’s tech sector is growing, it’s likely due at least in part to a string of high-profile success stories. Last year, Calgary-based software firm Benevity achieved envied “unicorn” status when British-based Hg Capital LLP purchased a majority stake in the company in a deal valued at US$1.1 billion.
Other companies — like Edmonton-based Jobber and Calgary-based Symend, which raised more than US$60 million and US$100 million respectively in recent funding rounds — have also attracted attention.
“When people start to see these companies in Alberta that are commanding some significantly high valuations and raising some serious money, I think they start to say ‘there is something here,'” Mawji said. “And the VCs have started to take note.”
While Mawji said tech is currently booming all over the globe, Alberta’s industry has benefited from public and private sector efforts to encourage diversification during a string of downturn years for the province’s traditional oil and gas economy.
But even with oil prices booming once again, boosters say tech in Alberta will continue to attract ever growing amounts of investment capital. Schweitzer pointed out that some of the companies attracting seed and early-stage funding right now will grow into larger, more mature companies capable of attracting larger dollar amounts.
“We anticipate that in the years to come, the venture capital numbers in Alberta are going to grow quite exponentially, because there will be more and more companies getting to those later stages,” Schweitzer said.
This report by The Canadian Press was first published Feb. 8, 2022
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
