Vancouver Tech Companies Create Silicon Valley North

Vancouver Start Up Week – What’s Next in Digital Health Panel:
(L–R) Curtis Duggan, Brendan Byrne, Michael Fergusson, Richard Osborn, Sarah Goodman, Denny Hollick

Vancouver has become a mecca for digital health startups, innovators, entrepreneurs and VCs.
Vancouver bats above its weight when we look at Canada’s VC deal making. For example, Toronto recorded 70 deals in two years while Vancouver had 38 in the same period. Stats like this have earned Vancouver the nickname, “Silicon Valley of the North” but investment in Vancouver tech companies pales in comparison to the funds invested below the 49th parallel.

Vancouver Tech Companies Create Silicon Valley North - Finance Panel Discussion at Vancouver's Interface Summit 2015.

Interface Summit Finance Panel: (L–R) Peter Van Der Velden, Dave Chase, Parminder Singh, Dan Holmes, Jiwu Zhang

While there is no shortage of innovative companies and products coming out of Canada, there is a serious shortage of funding. Peter van der Velden of Lumira Capital, speaking in Vancouver at the Interface Health Summit, said a total of $9Million has been invested in Canadian health tech so far in 2015. A pittance, if you consider that Ayogo’s $2.5Million Series A from U.S. investors – represents a whopping 28% of the total.

Vancouver Startup Week’s Healthtech Entrepreneurs

Vancouver Startup Week gathered together an impressive panel to discuss What’s Next in Digital Health, healthcare delivery, and healthcare venture development. Leading voices in local health tech were asked about the challenge of growing a Vancouver company:

  • Ayogo’s American customers value Ayogo’s digital approach, creating emotionally-engaging technology that is changing health behaviour. A successful exporter of technology, Ayogo’s customer base is primarily American pharma customers, payers and healthcare systems.
  • Curtis Duggan’s Blue Mesa Health focuses primarily on diabetes prevention, using health coaches. He’d like to see Canadian and U.S. investors working more closely together.
  • Telus Health, now the largest EMR provider in Canada with 1,600 team members scarcely counts as a startup, but CIO Dr. Brendan Byrne thinks like an entrepreneur and is excited to bring value from the huge amounts of health data being generated. He said that the U.S. system is more “disruptable” and willing to take more risks.
  • Sarah Goodman of iHeart/Vitalsines said they are using a hardware device that measures aortic stiffness to provide instant feedback on internal health. They overcome funding challenges by offering direct-to-consumer sales of their device.
  • Richard Osborn of Recap Health Ventures looks to home assistance and community care as emerging areas of focus for investment, growing in tandem with Canada’s aging population.

Vancouver Tech Companies Look Beyond Canadian Borders

A theme emerging at both events is how Vancouver health tech companies are succeeding in the U.S. Why is innovation investment in the two countries so different? Michael Fergusson of Ayogo earned a laugh by suggesting that the objective in U.S. healthcare is to earn a profit, while in Canada nobody should.
For-profit Canadian companies expressed frustration with barriers connecting with government health authorities. While the federal government’s eHIPP program will help bridge the gap by funding a small number of Canadian health tech partnerships, most Canadian health tech companies are looking to the U.S. where venture capital is more accessible and healthcare innovation is a cost of doing business.

Vancouver Tech Companies Create Silicon Valley North - Michael Fergusson speaking at Vancouver's Interface Summit 2015.

Ayogo’s CEO, Michael Fergusson, speaking at Vancouver’s Interface Summit 2015

Events like Interface Health Summit and Vancouver Startup Week demonstrate that Vancouver’s tech companies are playing an important role in accelerating innovation in healthcare. While Canadian VC funding and government initiatives like eHIPP may be limited, there are opportunities for Vancouver health tech companies to advance innovation, particularly if they are willing to look beyond Canada’s borders.