US Venture Capital Dollars Chasing Canadian Health Tech Start-Ups

US Venture Capital Dollars Chasing Canadian Health Tech Start-Ups
April 11, 2017 Canadian

Canada has more than a popular Prime Minister turning heads these days. Canadian health tech startups are getting lots of coveted attention from US venture investors who are finding themselves attracted to smart business models paired with best-in-class technology and favorable economics.

On March 14-15, the Consulate General of Canada in New York and the New York Venture Capital Association hosted a Canada + NY Life Science Investor Forum. Over the course of the two days, 13 leading Canadian entrepreneurs collectively held over 40 meetings with US investors from institutional investors such as BluePrint Health, Flare Venture Partners, and Roche VC.

“Blueprint Health is very excited about the digital health space north of the border. We’ve invested in 3 Canadian startups to date (Limestone Labs, PatientPrep, and Blue Mesa Health) and we’re seeing an increasing number of applications from companies founded in Canada.”

– Jean- Luc Neptune, Partner/Executive Director/Accelerator Head @ Blueprint Health

On March 14-15, the Consulate General of Canada in New York and the New York Venture Capital Association hosted a Canada + NY Life Science Investor Forum.

Here are five reasons why US investors are bullish about the Canadian health tech start-ups:

1) Proven winners in Health Tech

From Stanford University appointing Canadian Marc Tessier-Lavigne (founder of Denali, President of Rockefeller University and former EVP of Genentech) as their next President, to leading VC firms Union Square Ventures, and ff Venture Capital investing is rising starts such as Figure 1 and Interaxon, Canada punches above it’s weight in the space.

2) “Made in Canada” technology and talent is world-class

Canada has all of the features of successful entrepreneurial hubs: a flourishing creative community, strong engineering talent and quality universities, such as University of Toronto and McGill University, and business-oriented immigration policies that enable the recruitment of diverse teams across geographies. Significant investments have specifically been made into Health IT and life sciences over decades perhaps most famously through MaRS.

3) Each dollar invested goes at least 30% further

There are strong R&D incentives in Canada. The SR&ED tax credit program – on it’s own – allows Canadian companies to recover 1/3 of the cost on every dollar spent. Even foreign companies can benefit from this program. That alone, combined with the lower Canadian dollar, makes investing in tech-intensive Canadian start-ups an obvious choice for any portfolio.

4) Active Canadian angels and VCs to syndicate with

According to Thompson-Reuters, venture capital invested across Canada totaled $1.2 billion in 300 deals (June 2015), which is up 33 percent from the previous year. Whereas VC dollars lag at later stages of company development, National Angel Capital Organization reports that in 2014, angels networks collectively invested over $90M into Canadian start-ups, with over 80% of these investment dollars being injected into in life sciences (%41) and ICT (%42).

5) It’s Easy

In the past, US investor had been deterred by a former Canadian rule known as Section 116, which made it very expensive and time-consuming for US VCs to invest in Canada. In 2010, that rule was reformed so that it no longer posed an impediment to foreign VCs seeking to invest in Canadian companies. Preqin, a source of data and intelligence on alternative assets, reports that a third of US-based venture capital firms invested in foreign markets in 2015, and Canada took the biggest share with 10 percent. [/notice]

Here are three CTA Health IT companies that are the future rising stars of health tech in Canada and that participated in the VC Forum:

Health QR’s mobile application, supports medication management and improved adherence. Health QR’s unique set of notifications developed in partnership with drug manufacturers and patient groups, supports prescription customers throughout their medication journey providing reminders when it’s time to refill a prescription, take a medication and when a prescription is about to expire.. And, the app securely links to a customer’s pharmacy-based prescription record.

“My goal for the CTA program was to identify partners for a U.S. Pilot project and I am making excellent progress with the University of the Sciences and several others.”

– Patti Ryan, President & CEO of Health QR.

Mozzaz delivers a digital health platform that allows clinical teams to create and deploy personalized care plans for patients with complex care needs such as long-term support for the elderly and disabled, mental health illnesses, and suicide prevention. The solution enables patients to stay safe, connected and supported through their mobile device or personal computer while being continuously connected and monitored by their care team. Integration with the health organization’s EHR increases productivity gains by becoming a part of the clinical workflow which streamlines data to patient records and supports care coordination. Mozzaz can aggregate individual patient data across a group or population to deliver “big-data” analytics to support predictive modeling, clinical throughput measures and the modeling of behavioral health patterns that can identify triggers and causative factors in health and behavior.

Pulse InfoFrame (Pulse) is a private, cloud-based health care informatics company that provides actionable data, targeted at the highly detailed requirements of medical specialists in the areas of cancer, cardiovascular diseases, rare diseases and patient reported outcomes. The Pulse system allows specialist physicians the opportunity to capture relevant “little data,” and organize, model and share these data across global networks. Pulse’s solutions is interoperable with EMRs, facilitating the convergence of the “big data’ from these sources with genomic and biomarker data through a secure, web-based application.

“It was great meeting and discussing the impact Pulse is having on the research and clinical market at the Canadian Consul General Life Sciences event. We see a future that incorporates data sources from many sources, such as new genetic or phenotypic information, and Pulse seems primed to facilitate that transition.”

– Blake Stevens Ph.D., Senior Associate, Harris & Harris Group Inc

Contact:

If you are a VC interested in Life Sciences Entrepreneur, contact Vincent Finn (Vincent.finn@international.gc.ca) for an introduction.

About the Canadian Technology Accelerator:

The Consulate General in New York runs three technology accelerators that target high-potential early-stage companies in three sectors selected through a competitive process. The companies receive international business acceleration from partners in the private sector, working closely with Trade Commissioners of the International Business Development section of the Canadian Consulate.

CTA Digital Media: (Ad Tech, Data Analytics, FinTech, E-Commerce, SaaS and on-line Content) selected through a competitive process.

CTA CleanTech: Green chemistry and advanced materials; energy/water data, analysis, management & control; clean energy; clean transportation and mobility, clean web, consumer engagement and smart grid.

CTA Health IT: Focusing on patient-centered solutions using health information technology including mobile devices (mHealth) and telemedicine (eHealth).

 

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