Toronto business accelerator grooms data-driven firms
OneEleven helps firms reach next level in technology sector expected to hit $50B in 5 years
A newly opened business accelerator in Toronto aims to move Canada ahead in the growing field of data-driven technology.
The business of helping companies make sense of data is estimated to grow to $50 billion worldwide in the next five years from $5 billion today, say the founders of OneEleven accelerator, which had its grand opening last week.
This is the future. And this is just one small microcosm that really represents what needs to happen right across Canada.- John Ruffolo, OMERS Ventures
Unlike a business incubator, which helps people with ideas in early stage entrepreneurship, an accelerator promotes more mature businesses to the next stage in their development, said Bilal Khan, managing director of OneEleven.
“They’ve been funded, they now have a product, they have a few companies that are prowling with them, but they now have to commercialize that technology and help it scale. So it’s really market-focused and not really [idea generation],” he told CBC News.
With the backing of a group of Toronto companies and institutions plus public sector money, the accelerator has chosen a handful of firms working in data optimization, data aggregation and data analytics, all areas arising out of cloud computing.
“They’re not green, they’re all very mature, they’re very sophisticated entrepreneurs. They either have built companies successfully and now they’re building the second or third or they have a very deep, demonstrated expertise. They’re building solutions to very complicated problems,” Khan said.
Tulip Retail, makers of software that lets retailers create online versions of their stores, and Granata Decision Systems, a software startup that helps marketers improve their campaigns, are among the companies chosen. Some have emerged from the Kitchener-Waterloo technology hub in Ontario.
At OneEleven, they are surrounded by similar startups, working on similar problems, giving them an opportunity to share ideas, Khan said.
Like many growing businesses in need of financing and a forum, last week gave OneEleven an opportunity to pitch to 120 prospective investors.
“The pitch is scary,” said Ali Asaria of Tulip Retail. “It’s a very short amount of time to gather interest, establish credibility and then get people to buy in.”
Asaria said his business is at a difficult stage and it’s hard to establish the right conditions to grow in Canada.
“It’s tough. I mean you are making a big bet and you have to convince others to join you. It’s one of the hardest things I have ever done,” he said.
Craig Boutilier, who used to chair a university computer science program, now runs Granata.
“Right now we are looking for ... a large seed round of funding, something in the order of three quarters of a million to a million dollars,” he told CBC News.
OneEleven seeks to bridge the gap between research and commercialization for firms involved in high-performance computing, helping its entrepreneurs rub shoulders with both venture capitalists and academics.
Toronto technology potential
Khan said Toronto has a promising cluster of such data-driven firms.
“Over the last few years we’ve done an incredible job of seeding early stage technology companies, getting people thinking about entrepreneurship is a more common career path and as a result we have a more vibrant entrepreneurial community in Toronto,” he said.
“Over the last 10 years, we started seeing some really great successes, but the problem is once they get to be post-seed, potentially global companies, they don’t have the resources to get them to that level and that is really a critical gap in our ecosystem that exists here,” Khan said.
The backers include Ontario Centres of Excellence, Bennett Jones, Osler, Ryerson University and OMERS Ventures.
OMERS Ventures CEO John Ruffolo sees the accelerator as a promising model for mid-stage companies going into a burgeoning technology field.
“This is the future. And this is just one small microcosm that really represents what needs to happen right across Canada,” he said.