Research and Innovation : Innovation + Job News

Bay Street-based management software firm Blueprint has announced that they've recently raised $15.9 million in venture capital to finance growth in the US, Europe and Asia.

The company, which makes requirements definition and management software to streamline IT operations for large institutional clients including banks, governments and insurance companies, already has offices in four US cities.

Founded in 2002 as Sofea Inc. the company set out to tackle the "requirements definition" problem facing companies. It was rebranded as Blueprint in 2007 as it entered the US market. The company has shown consistent growth since then, more than doubling its client base, to more than 200 clients, since spring 2010.

The new round of financing, led by Tandem Expansion Fund, comes as the industry prepares for rapid expansion.

"The requirements definition and management software market is at a tipping point for explosive growth over the next two to three years," said investor Roger Wilson of BDC's IT Venture Fund in a statement.

Blueprint expects to benefit from that growth. "We have demonstrated that we can dramatically improve the software development performance of our initial set of Global 2000 customers, leaving us well positioned as a leading requirements platform as global demand takes off," said Blueprint president and CEO David Nyland in the company announcement. "For this we need to grow our presence in the US, EMEA [Europe, the Middle East and Africa] and Asia.... We are now significantly strengthened by our financial partners who have validated our business plan and are supporting us with expansion capital to enhance our global penetration."

Writer: Edward Keenan
Source: Robert Bartlett, Blueprint

One of the most promising startups to emerge out of Ryerson's Digital Media Zone incubator over the past year was Scanly, an app that gave students discounts from various retailers through their mobile phones. Business prospects appeared so encouraging after the company's launch in September 2011, the founders applied to and were accepted for a session at Y Combinator, the Silicon Valley incubator that may be the most renowned in the world.

Interestingly, the company has returned reimagined, reinvented and renamed.

"As we prepared to go to California and scale up Scanly, we realized that expanding it beyond Ryerson would be very costly and risky, and that the business could never become truly big," founder Martin Drashkov writes about the experience. "Abandoning a product and starting anew is always tough, but thankfully we had the support of the Y Combinator partners and the awesome YC Alumni community."

The reinvented company recently launched in its new incarnation, Kyte, an app that allows any Android phone to be turned into a children's phone. "After doing some research, we realized we could write an app that runs on Android phones and completely locks down the phone into a limited, kid-mode, while letting parents control the phone from the web," writes Drashkov. "We had stumbled on a very interesting idea—we would be the ones to make sure every child in the world can get a smartphone!"

The app allows parents to control their kids' web experience and track their location by GPS. Work on the new product began in January. The Y Combinator process of mentorship helped with the development process. Finally, Kyte launched at the accelerator's Demo day last month.

Writer: Edward Keenan
Sources: Lauren Schnieder, Ryerson DMZ; Martin Drashkov, Kyte

Last week, the prestigious Branham300 listing of the top information technology companies in Canada named York Mills-based firm SecureKey among the top 25 "up-and-coming" ICT firms in Canada. While the company welcomed the news, SecureKey EVP Robert Blumenthal noted, "It's a recognition milestone, not a business milestone."

Of course, over the past year, as the online security ID tech startup has grown to 100 employees from 60, it has hit plenty of business milestones too. Most notably, SecureKey secured a major investment from chip-manufacturing powerhouse Intel and announced that the SecureKey configuration will be included in millions of Intel products being manufactured over the next year.

Blumenthal says the firm's technology solves the increasingly ubiquitous problem of secure online logins. For the sake of convenience, most username and password combinations are unsecure and often reused from website to website. More complicated (and secure) login procedures become too much trouble for users. The gold standard, he says, is a two-step process, "something you have and something you know," such as a bank card and PIN code combination. SecureKey's technology uses a small, portable "applet" contained in cards, USB keys or devices to create a similar authentification process.

Blumenthal says that next week SecureKey will launch the first phase of a collaboration with the Government of Canada that will enable citizens to use banking credentials to interact securely with the government.

Writer: Edward Keenan
Source: Robert Blumenthal, Executive Vice President, Marketing and Business Development, SecureKey

One of the primary problems facing the world of sustainable energy is storage: since solar and wind power are "intermittent"—that is, they generate electricity at the whims of the sunshine and wind, rather than constantly or on demand—energy needs to be stored until there is demand for it. Batteries capable of doing so have so far been too large and expensive to be a solution.

Ryerson electrical engineering researcher Kamran Masteri Farahani has been conducting research for Toronto-based startup Temporal Power for the past 18 months. And he says the results show a breakthrough.

"This solves the problem of storage for wind power," he says. "This will change energy storage completely."

Temporal Power has developed a storage technique that involves flywheels spinning to store the energy kinetically. The company, in collaboration with Hydro One and Toronto Hydro, has created flywheels that are cheaper and easier to maintain than batteries. Masteri says his research, conducted at Ryerson's Centre for Urban Energy, shows that it works.

"After 10 hours, the flywheels still maintain 95 per cent efficiency," he says. "They also hold up to twice as much energy as competitor techniques, and 50 times as much energy as most commercially available materials." He says that the technology also regulates voltage and can feed or draw from the grid as needed, making much of the existing (and expensive) regulation technology redundant.

If Hydro One's own tests confirm the Ryerson result, the company will begin implementing the technology in its own system by the end of the summer.

Writer: Edward Keenan
Source: Kamran Masteri Farahani, Electrical Engineering Researcher, Centre for Urban Energy, Ryerson University

Three-year-old classroom education innovators Top Hat Monocle are hiring now in Toronto as they move their headquarters from Waterloo to the big city.

"We're currently in a co-working space in Toronto as we await our official office space later this quarter," says CEO Mike Silagadze by email.

The company was founded by University of Waterloo students Silagadze and Mohsen Shahini when, for a class project, they decided to try to put the mobile devices students carry with them to use as learning aids. The reaction to the project was so good that they launched the concept as a business with $300,000 from Waterloo-area angel investors (they have since raised a total of $1.5 million in investment).

Three years later, their products are used on more than 85 university campuses around the world—including Harvard—and the company has seen more than $5 million in sales, according to a recent report.

Today, they continue to grow. Top Hat Monocle has opened a San Francisco office. The HQ relocation to TO, Silagadze says, is motivated primarily by recruiting purposes, "It was very hard to convince top candidates to move to Waterloo, and we in fact lost a few people that way. So long term, the right decision was for the company to be in Toronto."

The company currently has 24 full-time employees. Perks include weeks available to work on personal projects, catered staff meals and video game tournaments. The company is hiring developers, designers and sales reps right now—lots of them. "We'll likely need to hire another 20 to 30 sales reps and another 10 developers in the next six months," Silagadze says. "It's going to be a busy time."

Sources: Mike Silagasze, CEO, Top Hat Monocle; Yahoo! Small Business advisor

"Years ago, I was a hired general contractor," says Gary LaRose, "and I got a commission to do a wine cellar."

The experience of the building project sparked a love affair with wine, he says, leading him to take "about 10 wine courses and become an avid collector." His passion and his business merged when 17 years ago he decided to specialize in building wine cellars, founding Rosehill Wine Cellars.

That collected experience led him finally to the recent opening of a dedicated wine-rack manufacturing facility in Mississauga, the first of its kind in Canada, unveiled publicly through press announcements this month after two years of preparations and testing.

"It takes a while to set it all up," LaRose says, noting the gradual collection of robotics and computer design equipment. Now the facility is operating at full speed, serving custom orders from across Canada and around the world. Rosehill may soon start seeking dealer arrangements with agents to compliment its online sales and Toronto retail store. "I didn't want to do this until the factory was ready," LaRose says.

At the factory and in Rosehill's Etobicoke retail location, LaRose now employs 17 staff in what is a growing, highly specialized area of industrial home design. "It's actually a very specialized subfield," he says. "You have to think like a wine collector—what types of wines will it house, the size of the bottles, displays.... Some people buy only by the case, some have lots of magnums of champagne, some will have no magnums. And then you need to know how to refrigerate the room, and build your racking all around it."

He says Rosehill has grown with the growing interest in food and drink appreciation over the past decade.

"At one time the people who would hire us were avid collectors looking to make a perfect home for their collections," he says. "Now it's quite a lot of people who just have a big home and are interested in starting a collection—they want to build the home first and add the wine collection later."

Writer: Edward Keenan
Source: Gary LaRose, Owner, Rosehill Wine Cellars 

We reported a year ago that Ryerson Digital Media Zone-based startup HitSend was a local digital company to watch as it launched its first product, SoapBox. Now the company has announced that SoapBox is the discussion platform for The Walrus magazine's new online conversation tool, The Walrus SoapBox.

The partnership with what is probably Canada's most respected magazine of ideas represents just the latest in a steady stream of announcements for HitSend. Announcing the initiative, Walrus publisher Shelly Ambrose said the SoapBox platform offered an "innovative and exciting new realm" for the magazine. 

HitSend CEO Brennan McEachran says that the combination of SoapBox, a platform designed to enable the sharing and development of ideas, and The Walrus, a magazine devoted to exploring ideas, was a natural fit. "When we met each other we noticed it right away... they're one of our more well-known clients, so we're excited."

Over the past 12 months, McEachran says they've grown from one or two clients to a roster of about 20, including Chapters/Indigo and a project with Vitamin Water launching soon. In September, a new talk platform for Ryerson students will launch university-wide.

During the past year, the HitSend team has also doubled in size to eight employees.

"Over the next couple months," McEachran says, "it's all about spreading the word and building SoapBox."

Writer: Edward Keenan
Source: Brennan McEachran, CEO, HitSend

Early this month, local business information platform builder Locationary announced a deal with US-based company Localeze. The new partnership should see the company's platform penetrate the global market in location-based data.

"It's pretty interesting," says Locationary CEO Grant Ritchie. "Localeze has data agreements with most of the largest web providers. So this should see them moving into data management with out platform and technology."

That platform has been built steadily since late last summer when, as Yonge Street reported at the time, $2.5 million in investment capital allowed the company, based in Toronto's Entertainment District, to focus on building out its technology. "We used that capital to put our heads down and develop and launch this platform and to beta test it," says Ritchie. The technology, called Saturn, "is like a universal translator for local data," allowing data arriving in different formats to be integrated into one system.

Ritchie says that over the past year or so, his company has doubled the size of its staff to 16 full-time-equivalents, and continues to grow. "I could see us doubling again over the next six to 12 months," he says.

Writer: Edward Keenan
Source: Grant Ritchie, CEO, Locationary

Markham-based injection-molded plastics manufacturer Novo Plastics has developed a muffler system for cars that it says is more ecologically friendly, cheaper, lighter and more durable than conventional mufflers. And with a recent investment of $975,000, it will be expanding its GTA manufacturing facility to improve distribution.

Founded in 2006, the company has grown to employ more than 70 people in its 80,000-square-foot factory in Markham, manufacturing plastic parts for heating and air-conditioning systems, as well as automobiles. Its innovative muffler system has been undergoing testing and continued development over the past year.

Novo Plastics CEO Baljit Sierra says that because plastic is far lighter than steel, the muffler system vastly improves gas mileage. "There's been a huge push by car manufacturers to take weight out of the vehicle, and this muffler represents a significant weight reduction, which makes the car much lighter. It also has a far cooler surface temperature which eliminates the need for other equipment."

The injection of capital comes courtesy of the federal government's Ontario economic development arm, FedDev Ontario, which announced the funding last week under its Prosperity Initiative. The repayable investment is targeted to allow the company to tool up to be the first to bring this type of system to market and to distribute it around the world.

Sierra says he expects to be growing the size of the company's workforce over the next year or two, once the ongoing testing phase of the product is complete; he declined to guess at a specific number of hires at this stage. In addition to its Markham headquarters, the company operates sales and distribution offices in the US, Germany, India and South Korea.

Writer: Edward Keenan
Source: Baljit Sierra, President and CEO, Novo Plastics

Saint John, New Brunswick-based group buying website Spinzo is preparing to launch in Toronto. The company is staffing up—hiring sales and marketing staff—in anticipation of bringing its "progressive savings" model to the GTA.

The variation on popular group discount sites adds a "more people equals a better deal" innovation. That means the price of an item falls when more people sign up to buy it. The platform also allows purchasers to bid a price they are willing to pay, committing to buy it only if the price reaches a certain level.

CEO Emmanuel Elmajian says this model attracts a better caliber of business to offer deals.

"If you look at many of the [traditional group buying sites], you see they tend to attract lower-end merchants," says Elmajian. That's because such sites use deep discounts as the main selling point. "A lot of businesses, restaurants in particular, don't want to do that." He says they might offer a 20 per cent discount as a base, and then up it to 30 per cent or more if a certain number of people bid. "Then maybe they want to cap the discount at 40 per cent. That's perfectly fine."

The more-people-equals-lower-prices approach, he says, also "brings viral back into the equation." Buyers have a strong incentive to publicize the deal.

The company launched in testing phase earlier this year, with more than $500,000 in investment from private and public partners led by Growthworks. Elmajian says the company has a sales person working in Toronto now, and is looking to add another one or two, in addition to hiring a marketing coordinator. Spinzo should be live, offering deals to the general public sometime in the next month and a half.

Writer: Edward Keenan
Source: Emmanuel Elmajian, CEO, Spinzo

Less than two weeks ago, MaRS announced the launch of Canada's first dedicated cleantech fund, the $30 million MaRS Cleantech Venture Fund LP, to support the burgeoning industry in Toronto and Canada. Now California-based SAIL Capital Partners has jumped into the game locally with the announcement that it's launching a $100 million cleantech fund, a partnership with Stifel Nicolaus Canada Inc., to invest in Ontario energy, water and and other eco-innovation technology startups.

In a statement, SAIL managing partner Walter Schindler said Ontario was becoming "the capital of cleantech in Canada," and noted that in addition to directly supporting innovation, funding will put local companies "at the forefront of this burgeoning industry and job creation."

Analysis predicts that the global cleantech sector will be worth an estimated $3 trillion by the end of the decade, and Ontario Minister of Energy Chris Bentley issued a release welcoming the growth of the local sector, which is supported by the province's Ontario Emerging Technologies Fund. "The clean-tech sector is a key part of Ontario's plan to create and support good jobs, replace dirty coal and build a healthier future for generations to come," Bentley said.

Writer: Edward Keenan
Source: Andrew Block, Office of the Minister of Economic Development and Innovation, Province of Ontario

Toronto's ZBx Corporation, based in Don Mills, has grown rapidly after developing the ZAP rapid diagnostic test, which can help identify various ailments on the spot in 10 to 15 minutes, using a single drop of blood drawn from a finger. Founded in 2002 with two employees, the company has now grown to employ 11 staff as it prepares to bring its product to market around the world.

In a speech delivered at ZBx headquarters last week, federal Minister of State for Science and Technology Gary Goodyear said the company was "a perfect example of what our government wants to achieve with our innovation agenda." He noted that over a period of years, ZBx was a recipient of several grants through the National Research Council's Industrial Research Assistance Program.

ZBx president and CEO Doug Ball recently told the National Post that the granting program is "the unsung hero in the Canadian bio-medical sector. They do an excellent job of picking projects to support, assisting entrepreneurs to go where Canadians have never gone."

Writer: Edward Keenan
Sources: Michèle-Jamali Paquette, Office of Gary Goodyear, Minister of State (Science and Technology); ZBx Corporation, Financial Post

"I cannot wait to start my business," Noura Sakkijha told StartMeUp Ryserson as it announced she was the winner of this year's $25,000 Slaight Business Plan competition. The company she's starting, Majoura, is a crowdsourcing platform for designers, allowing them to get feedback from consumers before manufacturing and distributing products.

In addition to $25,000 in seed money, Sakkijha will get mentoring from StartMeUp, an organization designed to foster entrepreneurship among students at Ryerson University.

To win this year's competition, Sakkijha beat out 31 other entrants, including four other finalist companies: Soapbox (recently profiled by Yonge Street), engineering consultants Peytec, homelessness documentarians Make Treks, job board My TaskRunner and discount postboard Bank My Coupons.

Past winners of the contest include former Yonge Street subject Damn Heels.

Writer: Edward Keenan
Source: Piotr Makuch, StartMeUp Ryerson

Founder and CEO William Mougayar explaining the "big concept" behind Toronto social media startup Engagio this way: "We're entering a phase of frustration in the social web." People actively take part in conversations in blog comment sections, on Twitter, on Facebook and other platforms every day. "How do you keep track of all that conversation? The solution is to aggregate it all in a unified inbox."

That's Engagio—a single inbox to track conversations across social media platforms. Mougayar says it's an idea whose time has come. The company was founded last October, launched its product as a private Alpha in December, and by early February it was able to announce $540,000 in seed financing.

That quick start means the company is growing rapidly. Already this year, Mougayar says, Engagio has hired four staff members, and continues to hire. "If you extend the horizon out six to eight months," he says, "I expect we'll add eight to 10 more employees to the team."

Writer: Edward Keenan
Source: William Mougayar, CEO, Engagio

The Toronto innovation incubator MaRS announced last week that it was launching Canada's first private dedicated cleantech venture fund. The MaRS Cleantech Venture Fund LP opens with a goal of $30 million in capital to invest—about half that amount has been closed so far—from a group of private investors including Greg Kiessling of Bullfrog Power. It will be managed by Tom Rand and Murray McCaig of MaRS.

"Great companies will go where they can find the capital, and we want those companies to stay right here in Ontario," Rand writes on the MaRS blog, a point he elaborates on in the fund's announcement. "We have great companies here at MaRS. They've got strong intellectual property, and many have a real chance at global leadership if they can get to market fast enough. Finding that first million or two has always been a challenge in Canada, and we intend to fill that gap."

Elaborating on the phone, Rand says that access to seed capital is more than just a perk for the sector. "Without healthy venture and seed funding, there is no cleantech sector," Rand says. "It's an absolutely fundamental part of the sector." He says that up until now, there hasn't been much appetite in the Toronto private sector for some of the risks in the cleantech sector, risks New York and Silicon Valley are fine with.

Moving quickly, the fund has already announced its first two investments: in GreenMantra, a company whose technology promises to recycle plastics into usable waxes and greases; and in Smart Energy Instruments, whose technology may help build the smart electricity grid.

MaRS points to estimates showing the global cleantech sector will be worth $3 trillion by the end of the decade. It aims to see Canada capture two per cent of that market—equivalent to a $60-billion industry nationally.

Writer: Edward Keenan
Source: Tom Rand, Managing Partner, MaRS Cleantech Fund