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What Ottawa must do to brand itself as a true national tech hub

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For most of the past 15 years — ever since Nortel began hemorrhaging jobs — the morning rush hour traffic in Kanata has largely been outbound, heading into downtown Ottawa or other parts of the region. Office buildings had floors of unused space.

That’s changed in the past few years. Both office space and talent are scarce in the Kanata tech park and, if there’s still traffic heading east, there’s an equal amount of it heading into Kanata, says Jenna Sudds, the outgoing executive director of the Kanata North Business Association.

There are now more than 500 companies in Kanata — the highest concentration of tech companies operating within Ottawa’s 2,778 square kilometres.

“It’s the full parking lots, it’s the full restaurants, it’s the traffic on our roads, it’s the congested buses,” Sudds says. “All of those may sound like a negative, but they’re actually the biggest positive indicator of the health of what’s happening here.”

Kanata has started rebounding from the decline of Nortel, thanks in large part to the telecom multinationals that eventually moved in to scoop up the pieces of that company.

Those companies — Ericsson, Nokia, Cisco — have name-brand recognition, but most of Kanata’s other tenants do not. In fact, the average person has likely never heard of many of Ottawa’s most successful companies. That’s because they’re mostly B2B (business to business) companies that make components of other, more famous technology, such as the sensors, software and networks that make autonomous vehicles and space travel possible. They’re unsexy stories to tell in a consumer-driven news market, and media real estate is assigned accordingly.

As we’ve seen from other tech-heavy cities, though, narrating your own story — and doing it well — is essential to attracting investors, entrepreneurs and tech workers. Toronto has positioned itself as the nation’s tech capital. The University of Waterloo is the MIT of Canada. Montreal has a young, edgy energy with European flair that attracts risk-takers.

So what is Ottawa?

It’s a beautiful city surrounded by greenspace with a pretty good housing market, decent entertainment options and a nice quality of life — a perfect mix to attract out-of-province and international talent.

But if you ask other Canadians, it’s The City That Fun Forgot; a government town where things are mostly predictable and boring. This general lack of awareness of and appreciation for what’s really happening in Ottawa’s tech scene is one of the biggest barriers the city faces when trying to compete against other Canadian ecosystems to get onto the world stage.

Over the next four weeks, the Citizen will take a deep and honest look at the city’s tech scene, its strengths, weaknesses and ambitions in a special series dubbed The IT Factor.


Jenna Sudds, outgoing Executive Director of the Kanata North Business Association, says the tech sector in Ottawa is strong and good luck finding a parking spot along the March Road complexes in the morning.

JULIE OLIVER /

Postmedia

In many ways, Ottawa’s tech scene is its own best-kept secret: You need to know what you’re looking for in order to find it.

Mayor Jim Watson, in an interview for this series, pulled out a map showing that Ottawa is geographically larger than Montreal, Toronto, Edmonton, Calgary and Vancouver combined. But that size doesn’t always work to Ottawa’s advantage; in fact, it makes it harder for investors and entrepreneurs to locate the heart of Ottawa’s tech sector.

Certainly, Kanata has an embarrassment of riches when it comes to tech talent, but it’s also out in suburbs, mostly hidden away in office towers inside of a tech park. Then there are small gatherings of startups in the ByWard Market and in downtown Ottawa.

Meanwhile, other tech communities around Canada tend to have a reasonably concentrated presence of startups, accelerators, universities and investors in their respective downtown cores.

Invest Ottawa, at the recently opened Bayview Yards Innovation Centre, is trying to become that hub for this city. It has a startup incubator, a makerspace for product prototyping and an airy and flexible event space. But even that’s in a semi-industrial dead zone outside the downtown core.

So while there may be a lot going on behind closed doors and throughout the city, Ottawa’s tech community has very little drive-by appeal — and that makes it tough to get pinned to an investor’s map.

The innovation centre is part of an attempt to reform Ottawa’s reputation as a government town, but it has its work cut out for it. “I think the one challenge Ottawa has, is that Ottawa will always have a duality for the city’s brand,” Klipfolio CEO Allan Wille says. “Ottawa’s got tech and it’s government, and it’s more difficult to build a singular brand.”

Part of the difficulty in building a singular brand may be because Ottawa has seen what happens when you put all of your tech eggs in one industry basket. In turn, it’s almost over-diversified to compensate. There’s a sprawling information and communications technology (ICT) industry here, but there’s also autonomous vehicles, artificial intelligence, cybersecurity, video gaming, cleantech and software as a service (SaaS).

This diversity is great for the economy, but from an image perspective it makes Ottawa look a little confused. Let’s use an analogy: If government is a solid and recognizable half of the pie, and a quarter of the pie is Shopify, the remaining quarter is sliced into a hundred little pieces, turning it into an unidentifiable mishmash. In short, Ottawa would need more unity in its tech sector to compete with just how large and all-encompassing its government identity is.

To be fair, Shopify has attracted some interest from outside of Ottawa, and it’s frequently upheld as the city’s proudest startup success story. But it’s also become a point of fixation that has been hard for Ottawa to look past. The truth is, Shopify likely would have succeeded no matter where it was founded; that its founders decided to stay in Ottawa should be viewed as a lucky break.

There is some progress being made, however, in getting Ottawa’s tech scene its own unique identity.  

But there are broader issues that make starting a business here challenging in a way that it just isn’t in other cities. There are many government funding programs and angel investors to get a young firm on its feet, but a lack of mid-range investment — particularly of the venture-capital persuasion — makes it incredibly tough for young companies to scale to profitability and beyond. Some founders are beckoned to bigger cities, where they may have an easier time finding the right collaborators, mentors and investors.

And, when it comes to Ottawa’s talent pool, most people interviewed for this series agreed that while there’s a lot of junior talent coming out of the schools as well as a lot of senior tech-sector veterans, the middle ground of talent — e.g. those with between five and 15 years of experience — is a little sparse. That kind of talent is essential to scaling startups and turning them into profitable and mature businesses.

Over the next four weeks, The IT Factor will explore what the city does well, what it could do better and what it will take for people across Canada — and around the world — to think of Ottawa when talking about tech and innovation. We hope you’ll follow along.

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Canadian Tire and NuPort Robotics to commercialize Canada’s first automated heavy duty trucks

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Canadian Tire Corporation and Toronto based start-up NuPort Robotics, Canada’s first autonomous trucking company, are partnering with the Ontario government to invest $3 million to undertake an automated heavy duty trucking project to test a “first-of-its-kind-in-the-world” technology. 

The breakthrough technology provides a transportation solution for the middle mile, the short-haul shuttle runs that semi-tractor trailers make between distribution centres, warehouses and terminals each day.

It is designed to enable next-generation automated trucks that are more fuel efficient, safer to operate, and provide an enhanced driver experience.

Backed by $1 million in support from the Ontario government through Ontario’s Autonomous Vehicle Innovation Network and matched by $1 million investments from Canadian Tire and NuPort Robotics, respectively, the two-year project is applying proprietary, artificial intelligence technology from NuPort Robotics to retrofit two conventional semi-tractor trailers – which will always be attended by a driver – with high-tech sensors and controls, a touchscreen navigation system, and other advanced features such as obstacle and collision avoidance.

Caroline Mulroney, Minister of Transportation, says: “Ontario is proud to be a global leader in automated and connected vehicle technology and this innovative project is an exciting milestone toward automated vehicle tech in the trucking industry.

“Ontarians rely on goods being delivered by trucks across the province every day and projects like this are demonstrating the ways that automated truck technology could help businesses meet delivery demands more efficiently while supporting a strong supply chain in Ontario.”

Vic Fedeli, Ontario Minister of Economic Development, Job Creation and Trade, says: “This project applies unique and made-in-Ontario Artificial Intelligence technology that offers increased safety and efficiency, with a reduced carbon footprint, to the goods supply chains on which we all rely.

“This is the latest example of how Ontario’s Autonomous Vehicle Innovation Network acts as a catalyst, fostering partnerships between ambitious technology start-ups and industry to develop and commercialize next generation transportation technologies that strengthen our economy and benefit society.”

Raghavender Sahdev, CEO of NuPort Robotics, says: “The trucks are currently transporting goods between a Canadian Tire distribution centre in the Greater Toronto Area and nearby rail terminals within a 12.5 mile radius, and early results are promising.

“The aim of the project is to develop a system that incorporates an autopilot feature for conventional trucks with a driver, leading to the most efficient way to drive and increase safety.

“The sensors work as a ‘safety cocoon’ to cover blind spots and prevent accidents and the end result is peak fuel efficiency, meaning lower carbon emissions, and peak driving performance for an overall more optimal transportation experience.”

NuPort Robotic’s approach to autonomous trucking is unique in the industry because it focuses only on solving the middle mile challenge, using a known set of predetermined trucking routes that are repetitive and high frequency as opposed to general highway driving.

Ultimately, when implemented on fixed routes in the future, Canadian Tire will benefit from faster commercial deployments and improvements in supply chain sustainability.

Gary Fast, vice-president of transportation, Canadian Tire, says: “Canadian Tire embraces innovation and is always testing new technologies to improve our operational efficiency and safety.

“As proud Canadian companies, the safety of all stakeholders, including drivers, employees, customers, and public will be the top priority as we work together towards deployment of this technology.”

Cari Covent, vice president of intelligent automation, Canadian Tire, says: “Over the last three years, Canadian Tire has made a significant effort to solve complex business problems by using the Canadian start-up Artificial Intelligence ecosystem, and NuPort Robotics exemplifies what we look for in a start-up with a focus on innovation, automation and artificial intelligence.”

Sahdev says: “As NuPort Robotics continues to develop new technologies to overcome middle mile supply chain problems and advance autonomous trucking, I am extremely grateful for the support of the Ontario Government through AVIN and the Ontario Centre of Innovation.

“With their continued support, we are striving to position Canada as the leader in autonomous transportation.”

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Constellation Software is money in the bank, this fund manager says

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If you’re looking for a long-term hold in Canadian tech then Constellation Software (Constellation Software Stock Quote, Chart, News, Analysts, Financials TSX:CSU) should definitely be on your radar. So says Jason Del Vicario of Hillside Wealth Management who likes not only Constellation but its recent spin-off Topicus (Topicus Stock Quote, Chart, News, Analysts, Financials TSXV:TOI) which Del Vicario says could do even better than CSU over the next ten years.

Software consolidator Constellation has been running on the same game plan for years, buying small vertical market software companies providing so-called mission critical software solutions globally. Over the years CSU has completed over 500 such acquisitions, buying the top names in their respective niche verticals and then using its clout and breadth to grow the business and expand into new markets. The resulting cash flow is then plowed back into more acquisitions and the cycle repeats.

The strategy has worked wonders for Constellation, which has grown its revenue from $631 million in 2010 to almost $4 billion for 2020 while taking earnings from $4.12 per share in 2010 to $20.59 per share this past year.

Shareholders were given a special treat last month when Constellation spun out recently acquired Topicus, giving CSU owners about 1.9 Topicus shares for every Constellation share as a dividend-in-kind. Constellation bought Netherlands-based software company Total Specific Solutions BV (or TSS) in 2013 and that subsidiary recently acquired Topicus BV, a Dutch information service company focusing on sectors such as healthcare, education and finance.

Topicus was singled out by Constellation founder Mark Leonard for its ability to grow without using outside shareholder funding. Leonard said the spin-out was part of the intention since a purchase agreement was struck last year.

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Nuvei wins price target raise from National Bank

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Strong quarterly results and an even brighter outlook for 2021 are reasons to celebrate for Canadian payments company Nuvei (Nuvei Stock Quote, Chart, News, Analysts, Financials TSX:NVEI), according to National Bank Financial analyst Richard Tse. In an update to clients on Wednesday, Tse left his rating unchanged at “Outperform” while raising his price target from C$85.00 to C$100.00.

Montreal-headquartered Nuvei is a provider of payment technology solutions to merchants and partners around the world, with a platform geared for high-growth mobile commerce and e-commerce markets. Nuvei’s solutions include a fully integrated payments engine with global processing capabilities, a turnkey checkout solution and a suite of data-driven business intelligence and risk management tools and services.

The company released its fourth quarter and full year 2020 financials on Wednesday, showing Q4 revenue of $115.9 million, up 46 per cent year-over-year, and adjusted EBITDA of $51.3 million, up 61 per cent year-over-year. Total dollar value of transactions processed by merchants (‘total volume’) with Nuvei rose by 53 per cent to $13.9 billion. (All figures in US dollars except where noted otherwise.)

The 2020 year featured revenue up 53 per cent to $375.0 million and adjusted EBITDA up 87 per cent to $163.0 million, with total volume rising a full 76 per cent year-over-year to $43.2 billion.

“Our performance continues to be driven by strong momentum in the high-growth verticals we serve, as well as by our customizable, scalable and feature-rich technology platform which provides one of the industry’s most complete payment technology solutions going well beyond merchant acquiring,” said Philip Fayer, chairman and CEO, in a press release.

The company said the fourth quarter represented the strongest growth yet experienced by Nuvei, driven by wallet share expansion from current merchants along with accelerated uptake of new merchants. New e-commerce business almost tripled compared to a year earlier, Nuvei said, while the company expanded its connectivity coverage over the quarter, introduced new product innovations on its platform and continued to execute on M&A.

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