The new year kicked off with big news.
First, Waterloo-based Magnet Forensics (TSX: MAGT) agreed to be acquired by U.S. private-equity giant Thoma Bravo in a deal valued at CDN$1.8 billion – the biggest exit in Waterloo Region tech history.
The agreement, which still needs shareholder and regulatory approval, would see Thoma Bravo combine Magnet with Atlanta-based Grayshift LLC, another digital-forensics company that Thoma Bravo acquired in July 2022.
There’s no word yet on what the deal means for Magnet’s 400-plus employees or the company’s Waterloo headquarters. However, Magnet said that founder Jad Saliba and CEO Adam Belsher will each hold “critical leadership positions” in the combined company, and that Magnet Chair Jim Balsillie will serve on the board.
The other big news in January was the completion of OpenText’s acquisition of British SaaS company Micro Focus. The US$5.8-billion deal makes Waterloo-based OpenText one of the largest software and cloud businesses in the world.
OpenText says it plans to reduce its newly combined workforce by eight per cent, but it didn’t specify where those reductions would take place.
The two big deals aside, much of the tech world is still navigating a prolonged patch of economic turbulence.
Google-parent Alphabet is the latest tech giant to lay off staff, announcing a global reduction of 12,000 jobs. The company has yet to say how the layoffs will affect its Canadian operations. As of April 2022, Google employed more than 1,400 people at its Kitchener offices. Alphabet has announced that it’s closing its DeepMind AI facility in Edmonton and consolidating it with offices in Toronto and Montreal.
Elsewhere, Michele Romanow stepped down as CEO of Toronto-based fintech Clearco after the company announced its second round of significant layoffs in six months.
Other Canadian tech companies shedding jobs in January included Vancouver-based Hootsuite and Thinkific, Calgary-based Benevity, Montreal-based Lightspeed, SSENSE and Shakepay, and Toronto-based Clutch, Venngage, #Paid, GoBolt and PartnerStack.
Amid the January layoffs, Globe and Mail ROB reporter Tim Kiladze suggested in a column that the global tech sector has an unhealthy “cult-like” focus on founders and valuations. The current downturn, he argued, may lead to a healthier ecosystem that’s more focused on building companies with stronger foundations.
Meanwhile, Communitech continues to support displaced Canadian tech workers through its Work in Tech job board and through The Help List, a roster of tech talent that helps connect skilled workers with companies that are hiring.
Communitech also announced a new partnership with the Vector Institute that will support Canadian SMEs and their ability to leverage AI as a tool for growth and competitiveness.
Through this partnership, Communitech and Vector will help build a talent pipeline in AI, machine learning and data security by connecting employees with collaborative learning opportunities through the Vector Talent Hub, Communitech’s Work in Tech job board and Communitech Hive.
Female tech founders are worried that market turbulence will impact them more than their male counterparts, according to a story by The Canadian Press.
One of the people interviewed – Caitlin MacGregor, founder of Waterloo-based recruitment-tech company Plum – said she is particularly worried about the general lack of investment capital.
“Women get a smaller percentage of the available capital, and then if that capital gets even smaller, the percentage that goes to women gets even smaller,” she said.
Added Halifax-based VC Rhiannon Davies: “There’s still a push for token investment in women’s technology, as opposed to a real shift to say this is the direction we need to go.”
Despite the economic headwinds, founders still need to plan for the future.
Michael Litt is doing just that. The CEO and co-founder of Kitchener-based Vidyard, a video-for-business company, has hired a new COO. Jonathan Lister, former VP of Global Sales Solutions at LinkedIn, has international scaling experience and will drive Vidyard’s sales, marketing and customer service functions.
Meanwhile, Waterloo-based VueReal – which uses nanotechnology to improve the production process for microLED displays – has made two key appointments.
Tim Baxter, a former CEO of Samsung North America and Senior Executive at Sony and AT&T, has joined the VueReal board and will serve as Chairman.
Earlier in the month, the company announced that Rick Coccimiglio, former Communitech COO and VP Finance and Operations, is the new CFO.
Fresh off a US$19-million Series A round, Waterloo-based Odyssey Interactive is preparing to launch their first game – Omega Strikers – this spring.
The four co-founders who launched the game-development studio in 2020 had previously worked together at Riot Games in Los Angeles. When they decided to start their own company, they chose to locate it in Waterloo. (Waterloo EDC played a key role in smoothing their path back to Canada.)
“It just made sense,” says CEO Richard Henkel, citing access to talent, currency rates, and provincial and federal tax incentives as just some of the reasons he and his co-founders chose to locate in Waterloo.
For more about Odyssey’s journey, check out the story on Tech News.
Health-tech startup Signal 1 has begun a commercialization project with Grand River Hospital (GRH) to test the Toronto startup’s patient-focused AI tool.
The project is funded through the Coordinated Accessible National Health Network (CAN Health). The federally backed agency is working with Communitech to bring founders and hospitals together to overcome procurement challenges and get more Canadian-made innovation into the health-care system.
The Signal 1 project is one of three recent pilots at GRH funded through CAN Health. Others involve Waterloo-based KA Imaging, which makes mobile X-ray technology, and, previously, Waterloo-based Axonify, which provides learning technology for frontline workers.
Hub’s a hoppin’
The Communitech Hub in downtown Kitchener continues to be a popular stop for federal and provincial cabinet ministers.
The list of VIP guests in January included: federal Defence Minister Anita Anand; federal Minister of Innovation, Science and Industry François-Philippe Champagne; Ontario Finance Minister Peter Bethlenfalvy; and Ontario’s Minister of Economic Development, Job Creation and Trade Vic Fedeli.
Champagne popped by to congratulate Communitech on being one of five regional partners selected through a competitive process to deliver intellectual-property programming through the federal government’s $90-million ElevateIP initiative. Communitech’s share of the funding – $38 million over four years – is the largest portion of the program’s overall budget.
Meanwhile, Fedeli visited the Hub to announce the renewal of a program that helps founders accelerate development and commercialization of autonomous vehicles and mobility technologies. The partnership involves Communitech, the University of Waterloo and the Ontario government through the Ontario Vehicle Innovation Network (OVIN).
Kudos to our ecosystem colleagues at the Accelerator Centre in Waterloo. The AC ranked among the top five business accelerators in the world in the public/private category, according to the annual World Benchmark Study conducted by UBI Global. Another Canadian accelerator – the York Entrepreneurship Development Institute – was also listed among the top five.
“These programs outperform their global peers with regard to the value they provide to their innovation ecosystems and client startups, as well as the attractiveness of the programs themselves,” according to the report.
In other categories, the McGill Dobson Centre for Entrepreneurship and University of Toronto Entrepreneurship were both ranked in the world top five for university business incubators.
The University of Waterloo topped a list of Canadian universities whose researchers have collaborated on advanced-technology research with a Chinese army scientific institution, according to a report in the Globe and Mail.
Between 2005 and 2022, UW researchers co-authored 113 publications with peers at China’s National University of Defence Technology (NUDT). The University of Alberta had the next highest total, with 99 joint publications with NUDT in the same period.
Collaboration between Canadian universities and NUDT has raised concerns among security experts, including the Canadian Security and Intelligence Service (CSIS), according to the Globe story.
In response, one university told the Globe that Canadian universities look to the federal government to provide clearer direction on national security and research collaborations.
BlackBerry on the big screen
BlackBerry, a film about the Waterloo-based company that led the smartphone revolution, is scheduled to have its world premiere at the Berlin International Film Festival in mid-February.
Directed by Toronto-born filmmaker Matt Johnson, the film stars Jay Baruchel as BlackBerry co-founder Mike Lazaridis and Glenn Howerton as co-CEO Jim Balsillie.
In an era of “go big or go home,” Communitech columnist Melanie Baker explores the benefits of staying small. Not every founder or inventor wants to dominate the global market. And that’s OK, Baker says.
In another column, Baker looks at why people leave their jobs. Some are running away from something; others are running toward something new; and still others – those laid off, for example – have little choice in the matter. Regardless of why you leave a job, Baker suggests seizing the opportunity to move toward a better work environment and a more fulfilling job.
In other news
This edition of the Roundup compiled by Kevin Crowley.
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