MaRS innovation hub hits pause on plan to expand to Calgary

The Toronto-based MaRS Discovery District innovation hub has hit the pause button on expanding to Calgary to deliver some of its programming and services.

For more than a year, MaRS has been in ongoing discussions with the University of Calgary and other players in Calgary’s innovation community to co-develop what MaRS described as a “franchise model” – called MaRS West – to expand its support for entrepreneurs in Alberta.

However, MaRS’s leadership is now pausing to evaluate the need to obtain buy-in from the local community for MaRS West, Dr. William Ghali, vice-president (research) at UCalgary, said in an email to Research Money.

The move comes after an advisory committee of innovation and business experts underscored to UCalgary the importance of collaboration to achieve strong MaRS West alignment and synergy with existing Alberta innovation stakeholders and organizations.

“I expect that MaRS leaders will also carefully re-evaluate the pros and cons of a MaRS West venture for Calgary and Alberta, mapped against their own priorities for continuing to advance the MaRS agenda and brand,” Ghali said.

MaRS’s leadership has decided to wait for the results of two recent requests-for-proposals in Alberta – both focused on funding new business incubators and accelerators, Dr. Cory Mulvihill, vice-president, ecosystems development at MaRS, said in an interview.

“We are keen to see what the results are of those competitions and then re-evaluate the landscape of how MaRS could continue to support innovation in Alberta,” Mulvihill said.

New proposals and MaRS’s work both focus on same area

One request-for-proposals, from the City of Calgary’s $100-million Opportunity Calgary Investment Fund, is for business incubators and accelerators with plans to create or scale companies that would expand and strengthen the tech-innovation system in Calgary.

The other RFP is from Alberta Innovates and aims to develop business accelerators to help Alberta’s promising startups and SMEs scale up and grow faster.

Helping startups scale is an area in which MaRS specializes. The innovation hub has generated $5.6 billion in MaRS-supported startup revenue since 2008 and has a current client base of 1,300 companies.

MaRS planned to work with the University of Calgary to potentially seek funding for MaRS West from the Alberta and federal governments and individuals, as Research Money previously reported. However, MaRS then would be competing for the same funding as that available to existing local innovation organizations and to any new Calgary- and Alberta-based organizations, including those building new accelerators to help startups scale.

Alberta Innovates’ RFP is aimed in particular at establishing new accelerators to addressing what Alberta Innovates calls Alberta’s “scaleup gap.” While half of all startups in the province survive more than five years, only 0.1 percent of small firms become mid-sized and only two percent of mid-sized firms become large.

Alberta Innovates is offering up to $25 million in funding for a three-year contract (with an option to extend for an additional three years) for three or more accelerators, both private and not-for-profit accelerator models.

The new accelerators are expected to contribute to 900 new junior technology firms, 20,000 jobs and $5 billion in tech firm revenue in the province by 2030, according to Alberta Innovates.

MaRS looked at both RFPs and their specific criteria, and “we decided that they weren’t a fit for MaRS and the MaRS model,” Mulvihill said.

MaRS to continue working with Alberta companies

In the meantime, MaRS will continue to work with and support Alberta companies that are in the scaling-up stage, as it has done for many years, Mulvihill said. “By no means are we putting a pause on how we engage in Alberta,” he added.

Mulvihill said 31 Alberta-based companies are currently utilizing MaRS’s services, including Calgary-based Summit Nanotech led by CEO Amanda Hall, a finalist in MaRS’s “Women in Cleantech Challenge.” Hall’s startup firm has developed a “green” method, using nanotechnology, to extract lithium from industrial brine water for use in batteries.

Alberta-based companies have continued access to MaRS’s startup services at no cost thanks to federal funding that enables MaRS to support entrepreneurs across Canada, Mulvihill said.

MaRS also is providing support for graduates of the Creative Destruction Lab-Rockies program (housed within the University of Calgary’s Haskayne School of Business) that will enroll in MaRS next-stage programming. Those companies include Calgary-based Swirltex, which has developed a membrane-based system for wastewater treatment that uses less energy and has a wider range of applications than traditional methods.

In addition, MaRS is coordinating the Calgary-based Clean Resource Innovation Network’s $5-million Digital Oil and Gas Technology Competition that will develop high-impact digital technology solutions to address challenges in Canada’s oil and gas industry.

MaRS looking for best fit in Alberta’s fast-growing tech space

MaRS has also been in ongoing discussions about MaRS West with local innovation entity Platform Calgary, which is building a new 50,000-square-feet innovation centre in downtown Calgary.

“If MaRS chooses to proceed, we look forward to continuing conversations about how to best serve our local tech founders and startups to further diversify our economy, create new jobs, and ensure greater prosperity for all Calgarians,” said Dr. Terry Rock, president and CEO of Platform Calgary, in an email to Research Money.

Mulvihill at MaRS said that once a community’s innovation ecosystem reaches a critical mass of companies that will benefit from innovation services, delivering those services locally is more efficient and leads to better relationship building.

The last two years have seen record-breaking venture capital investment in Alberta, according to a study by Alberta Enterprise Corporation (AEC). The province is now home to more than 3,000 tech companies, a 233-percent increase since 2012, the study found.

A majority (58 percent) of those companies are located in Calgary, with 30 percent in Edmonton and almost 13 percent in other regions of the province.

“Under the right conditions with the right partners and the desire to access our [innovation] services, MaRS definitely would be willing to consider moving forward with providing some of those services based in Alberta,” Mulvihill said.

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