The number of new startup companies in Atlantic Canada has grown in the past five years.
And so too has the number of startups that fail, which is “good news,” said Peter Moreira of Entrevestor, an organization that publishes news and data on startups in Atlantic Canada.
On Wednesday, Moreira presented the results of the annual Atlantic Canadian Startup Data report at the Invest Atlantic networking event in Charlottetown.
Moreira explained to a crowd at the Confederation Centre of the Arts that in 2017, 66 startups failed compared to 32 in 2016. Atlantic Canadian startups (compared to other parts of the country) have more access to forgivable loans and favourable forms of financing (non-dilutive), which keep failing startups from shutting down sooner, he said. In this respect, more companies failing free up resources for other companies.
Startups in Atlantic Canada increased to 486 in 2017 from 263 in 2013. Of the 122 companies that commented about revenue for the report, 20 per cent said it had doubled while 22 per cent had more than $1 million in revenue.
P.E.I. has also seen new startups grow to 42 in 2017 compared to 19 in 2013.
Of the startups on the Island in 2017, 53 per cent were in the information technology sector and 26 per cent in life sciences.
Startups on P.E.I. that disclosed revenue had an increase of 17 per cent.
Moreira said funding, as well as the creation of organizations that work with startups such as the Startup Zone and Launchpad P.E.I., have been keys to the growth.
“P.E.I. has done a very good job of developing a diversified ecosystem and a diversified community of talent,” he said. “P.E.I. is not a big market. It’s really difficult to get this sort of diversity in any market.”
Rory Francis, executive director of P.E.I. BioAlliance, said the report shows that progress is being made on the Island, and there is a lot of interest in starting new businesses.
“And, we’re seeing enough evidence of success – companies that are actually growing, making money, hiring people, attracting investment – that gets people’s adrenaline flowing.”
Francis added what needs to be done is to make sure the infrastructure (physical and programs) is in place to maximize the chances that good companies will succeed.
“They’re not all going to be successful. That’s just the way business is. But those that really have the potential, let’s make sure that they don’t fall between the cracks and die because we don’t have the right tools in the toolbox to support them,” he said.
Besides the Confederation Centre of the Arts, the ninth annual Invest Atlantic event workshops and presentations were held at the Holman Grand Hotel, Startup Zone and The Guild. This year, 250 people registered for the event and 35 investors attended.