July 6, 2023
If Italian Renaissance painters tried to capture the Halifax innovation community in 2021, they might have used a technique called chiaroscuro: A bright figure in the foreground set against a rather dreary background.
The background was indeed dismal in the past year. The global economic scene was dominated by rising inflation and interest rates, plummeting asset values and layoffs at large tech firms. And of course, the big geopolitical story was Russia’s invasion of Ukraine. In the venture capital world, term sheets were pulled and valuations plunged.
But against that backdrop, Halifax’s innovators shone, attracting new capital, launching new products and growing their operations overall. The ecosystem recovered from the COVID-related downturn and in some instances exceeded the activity of the late 2010s.
“When it comes to deep tech, we’ve seen continued traction for ventures that have had the fortitude to achieve product-market fit, notwithstanding challenging economic conditions,” said Erin O’Keefe-Graham, who became the director of the Emera IdeaHUB at Dal in 2021. “Factors playing a larger role these days for physical product innovation include supply chain complexity and follow-on investments for what are typically longer timelines for returns.”
Though capital markets around the world contracted in 2022, several startups in Halifax were successful in closing eight-figure funding rounds (as well as several companies that closed smaller rounds). Nanotechnology company Meta Material, which raised C$198 million when it listed on the Nasdaq last year, was back at it again this year, closing a round of funding worth about C$62.5 million in a stock market transaction.
It was the largest funding deal in Halifax this year, but not by much. Mara Renewables, which makes nutritional algal oils used in foods, closed a C$39.5 million venture capital deal, and Milk Moovement, which produces logistics software for the dairy industry, attracted C$26 million from investors. And shortly before the year closed out, medtech company ABK Biomedical finished with a flare by announcing a US$30 million round.
Some of that roughly C$166 million has already been put to use, helping these high-growth companies to scale more quickly despite the troubling economic times.
Consider Meta Material. As well as acquiring Devens, Mass.-based Optodot Corp., which signaled Meta’s move into next-generation battery materials, the company in late 2022 opened its new 68,000-square-foot, state-of-the-art manufacturing facility in Dartmouth. The company said the edifice will house some of the world's leading scientists in metamaterials, advanced manufacturing, and nano-photonics, and includes 12 cleanrooms, making it the only facility of its kind east of Ottawa.
“Through this expansion, Meta is delivering the world's first IDM, the Integrated Device Manufacturer model for metamaterial-based companies, similar to early semiconductor companies which have grown to lead their industry,” said Co-Founder and CEO George Palikaras at the time. “We are excited to celebrate the official opening of our new global headquarters, which will act as an important catalyst for growth. I would like to thank everyone who has helped get us to where we are today."
The Meta expansion manifested one of the noticeable advances in the startup ecosystem in 2022 – the growth of physical facilities, both by companies and support organizations. Other examples of this are Graphite Innovation and Technologies, which moved into new facilities, and Solid State Pharma, which added six workstations to its Halifax facility just as the year got started.
Employees began to return to these facilities as the concerns about the pandemic eased, and Halifax hosted many in-person events again. The most notable of these was the World Ocean Tech and Innovation Summit, hosted by Britain's leading global affairs magazine The Economist in October.
The biggest change in the ecosystem is that two of its cornerstones joined forces. In the summer, the Nova Scotia government announced that Nova Scotia Business Inc. and Innovacorp would join together to form Invest Nova Scotia. The merger came into effect in early December, and the merged entity has been maintaining the programs of its forebears. NSBI’s Export Growth Program had a fresh intake in December, and the venture capital program of Innovacorp has continued to invest in startups.
The city’s support facilities began to enjoy the sort of activity they saw before the pandemic and some went through notable changes in personnel.
Volta, the downtown tech hub, came under new leadership when Matt Cooper was promoted from Entrepreneur-in-Residence to CEO. The Pier, the Port of Halifax’s innovation outpost in the former site of the Seaport Farmers’ Market, got off the ground and was boasting dozens of members by the end of the year. And Sean Awalt took over BioNova just as the Life Sciences organization was hosting its annual BioPort Atlantic conference as an in-person event again.
Under O’Keefe-Graham’s stewardship, the IdeaHUB beefed up its staff and programming, developing a keener focus on deep tech.
“What’s exciting is seeing the progress of companies like ABK, Milk Moovement and Graphite Innovation Technologies really building momentum,” she said. “As a newcomer to Atlantic Canada after years in the Toronto business ecosystem, I’m impressed by the grit and commitment I see in founders here.”