Silicon Valley summer turns into $2.7M in fall funding for St. John's software company
Investors in CoLab Software are from both Canada and San Francisco
After a summer spent in Silicon Valley as part of a prestigious tech accelerator, St. John's-based CoLab Software announced Thursday that they've secured $2.7 million in new funding.
The new investment will allow CoLab, one of two Newfoundland and Labrador companies that participated in Y Combinator for 2019, to hire more staff and release a new version of its product, a software program that helps engineers with the design process.
"The last three or four months has been incredible for us, and I think it's going to be incredible for the province in general," Adam Keating, the company's CEO and co-founder, told The St. John's Morning Show.
In May, CoLab became the first company from Atlantic Canada selected for Y Combinator, an exclusive program that connects startups with mentors and funders. That program culminates in a demo day where each company involved pitches itself in front of a group of about 3,000 investors, Keating said.
The funding came from Atlantic Canada-based investors Killick Capital and Pelorus Venture, Canadian investor Panache Ventures, and San Francisco-based investors Spider Capital, Liquid 2 and FundersClub.
As a result of the new funds, the company will hire about 10 new employees over the next eight months, Keating said, and release a 2.0 version of its software product in October.
Part of a growing industry
CoLab was founded in 2017 by Keating and Jeremy Andrews, two Memorial University engineering graduates who returned to the province after working for companies in Silicon Valley.
The company's software aims to streamline the design review process for engineering teams, and was inspired by Keating and Andrews' experience on MUN's Paradigm Hyperloop team.
After returning from California and getting settled back in at work, the company was ready to announce its new funding, said Keating. CoLab's announcement comes about a week after Verafin, another Newfoundland and Labrador-based tech company, announced it had raised more than $500 million in new funding.
Verafin helped CoLab out with office space and infrastructure when they began, Keating said, and their success makes it more likely that his company might be able to pay that forward in the future.
"It's big for the environment here because it'll set up the infrastructure for other companies like us and around [here] to actually do the same thing in following years," he said.
It's all part of a provincial tech industry that's now worth $1.6 billion, according to the Newfoundland and Labrador Association of Technology Industries, and growing. There are now three generations of tech companies in the province, with established firms like Verafin being followed by newer ones like CoLab and startups that come out of places like the Genesis Centre at MUN, Keating said.
We find a lot of smart people. It's one of the things that's a strong point for Newfoundland.- Adam Keating
A report released late last month by Entrevestor, a website dedicated to news about startups, found that Atlantic Canada startups attracted a record $166.6 million in private capital last year while increasing revenues and adding about a thousand employees. In St. John's, the number of new tech companies launching in year has nearly doubled from 13 in 2017 to 24 in 2018, the report found.
"Seeing that success of the more senior startups moving up, and Verafin obviously doing an amazing job, it's really exciting for Newfoundland," said Keating.
But in the short term, that success could mean some short-term struggle in hiring the people needed to put their new funding to work, he said. The talent gap in the province's tech sector is widely acknowledged, with NATI identifying it as the most pressing issue facing local companies.
Keating advised high school students in the province thinking about their future careers to give the tech industry, software in particular, a serious look, citing the high demand for those positions at companies like his own and at others in Newfoundland and Labrador.
"We find a lot of smart people. It's one of the things that's a strong point for Newfoundland. It's just the volume is not quite high enough."
With files from The St. John's Morning Show