Experts offer a frank view of the state of the tech sector, but optimism abounds at CDL-Vancouver Alumni Showcase event

Tech thought leaders took to the stage at the Creative Destruction Lab - Vancouver (CDL-Vancouver) Alumni Showcase on April 19, 2023, to share perspectives on the latest industry developments, advice for how start-ups can succeed in today’s market, and predictions for what’s in store for the future.

Thomas Park, Partner and Lead at BDC Deep Tech Fund, opened the event as the keynote speaker with his presentation, ‘Market Overview: Challenging Times for the Tech Sector.’ He led the audience through an in-depth analysis of current market conditions and the economic slowdown.

“The capital markets have gone down, interest rates have gone up, there’s a number of geopolitical tensions at play, and supply chains are constrained, so we are seeing a pretty dramatic correction in the market, and it’s likely a sustained correction,” said Park. “This isn’t just a COVID blip.”

Thomas Park, Partner and Lead at BDC Deep Tech Fund

Speaking to an audience of investors and roughly 30 CDL alumni ventures in the process of raising Series A/B capital, Park offered insights into venture capital (VC) trends.

“The most interesting thing about VC is that it is probably the most pro-cyclical asset class there is, which you would think seems counterintuitive because VCs are supposed to invest against the cycle – buy during the dip and sell during the high – but somehow they continue to be very pro-cyclical.”

‘Great communities come together in tough times’

Despite the economic uncertainty, Park’s presentation offered words of encouragement and ended on a positive note. He pointed to start-up success stories like Airbnb and Uber, recalling that they were built during the 2008-09 financial crisis.

Canadian founders and companies are well-positioned to survive and even thrive in these conditions, Park said, especially if they draw on the guidance of others. BDC has been a long-standing partner across Canadian CDL sites, including CDL-Vancouver, and Park himself has both a mentor and partner role in the network.

“One of the great things about Canada is it is a close-knit community, and great communities come together in tough times,” said Park. “Reach out to mentors because there are many people who have gone through multiple cycles and they’ve built amazing businesses.”

Bree Stanlake, Director of CDL-Vancouver

Looking to the future of funding

Bree Stanlake, Director of CDL-Vancouver, then served as moderator for a panel discussion entitled, ‘The Future of Funding: Perspectives on Raising Capital,’ sponsored by KPMG.

She was joined by Brenda Irwin, Founder, Relentless Venture Fund; Boris Wertz, Founder, Version One Ventures; and Angie Lamarsh, Head of Sustainable Finance, Commercial Banking at HSBC Bank Canada (HSBC).

Angie Lamarsh, Head of Sustainable Finance, Commercial Banking at HSBC

Fielding the first question, Lamarsh spoke of how customers’ investment goals and strategies have evolved in response to the current state of the economy.

“We’ve seen a lot of our bigger corporate customers take pause and reflect on their priorities,” says Lamarsh. “But they are equally facing pressures and headwinds to deliver on key sustainability goals. So, where the investments are critical and core to business models and long-term success, we are certainly continuing to see folks make the strategic investment.”

In 2022, HSBC partnered with CDL-Vancouver to support Canadian climate ventures and the Net Zero transition. The partnership helps support ventures commercializing high impact, scalable climate solutions across Canada.

Remote works opens up new potential for Canadian companies

For Wertz, one of the most notable takeaways from the last three years has been the emergence of remote work at scale and the promise it holds for founders when it comes to talent acquisition.

Boris Wertz, Founder, Version One Ventures

“For the first time in Canada, it is much easier to build a very large company,” says Wertz, who is a CDL mentor. “A bunch of our at-scale portfolio companies have switched to remote working and really leveraged talent from anywhere. Being able to have access to talent worldwide is the biggest plus we’ve seen.”

Customers are focused on climate

Lamarsh said she anticipates more movement out of the corporate community in deploying capital into major infrastructure and novel technologies that will help them meet their sustainability commitments.

“Large corporates are under serious pressure from diverse stakeholders, whether it’s the investor community, consumers, or their own employees – it’s really coming at them from all angles,” said Lamarsh. “They are looking for people who can clearly articulate how the technology or solution will solve the real problems that they’re facing today.”

“Our customers are mainly focused on climate and the primary metric they’re looking for is clear reporting capabilities around GHG emissions, and that base-level Scope 1, 2, and 3 impact that the solution may offer.”

Brenda Irwin, Founder, Relentless Venture Fund

The evolving venture capital community

With her experience managing an extensive portfolio in health and technology and her role as a CDL mentor, Irwin shared insights on how ventures can help fill gaps in the health care sector.

“[Relentless Venture Fund] invests in some of the most common conditions associated with aging and the need for new care solutions is only going to grow with the aging demographic. From my position, being a health investor is phenomenal because I know that innovation will continue,” said Irwin.

There has been a behavioural shift and clinicians are increasingly open to changing ways of care, which has historically been a hurdle to new technology adoption, Irwin explained.

“I see nothing but opportunity ahead,” said Irwin. “There will be new modalities of care and it’s really about the clinicians embracing fully the concept of remote patient monitoring and aging in place.”

With an air of optimism in the room, the panel discussion concluded and attendees were invited to attend pitching sessions where CDL alumni ventures pitched their start-ups to investors across Climate, Compute, and Health-tech industries.