There are over 50 tech companies on Unama’ki-Cape Breton, an island of just 140,000 people. Many are in the bustling urban area around Sydney, but a surprising number are in small, picturesque communities. Others live in the cloud, able to be located anywhere, but the founders are here. Three tech leaders explain why this innovation ecosystem is so productive, and so sticky.

This episode is sponsored by the Regional Entrepreneurship Acceleration Program at the Massachusetts Institute of Technology (MIT REAP), a dynamic global initiative that engages with communities around the world to strengthen their innovation and entrepreneurship ecosystems and transform their economies. MIT REAP translates leading research from MIT expert faculty into practical frameworks, convenes key stakeholders who are focused on innovation and entrepreneurship, and educates regional leaders through team-based interaction to achieve economic and social progress. To learn more about their programs, visit reap.mit.edu.

Chad Munro is the CEO of Halifax Biomedical, an Orthopaedic clinical measurements company and a world leading provider of micro-instability assessment services using very precise proprietary Stereo Orthopaedic Radiography (SOR) imaging technology (HALIFAX exams).

• Website: halifaxbiomedical.com

Darren Gallop is the President and CEO of Carbide, an information security and data privacy platform that helps small to medium size businesses build, implement, and manage their information security and meet data privacy requirements.

• Website: carbidesecure.com
• Darren’s Why I am Still Awake podcast: whyiamstillawake.buzzsprout.com

The Verschuren Centre (VC) for Sustainability in Energy and the Environment is an independent clean technology development and deployment facility. It offers client-tailored services to support companies in developing sustainable solutions that meet industry needs.

• Website: verschurencentre.ca
• Twitter: twitter.com/verschurenctr
• LinkedIn: linkedin.com/company/verschurencentre

About the Invest in Cape Breton podcast

Unama'ki-Cape Breton is on the cusp of an economic renaissance. Invest in Cape Breton is a podcast that will challenge your assumptions about the island’s economy through in-depth interviews with local changemakers. We go beyond the headlines to reveal the untapped potential for investors and entrepreneurs, and offer a preview of the island’s coming transformation. Right from the first episode, we’ll show you why there's never been a better time to invest in Cape Breton.

This podcast is an initiative of the Cape Breton Partnership. It is hosted by Michelle Samson and produced by Storied Places Media. The theme music is "Under My Skin" by Elyse Aeryn.

It's an exciting time to be in Unama'ki-Cape Breton We're

2

having an economic Renaissance.

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Darren: Never has there been

a time that's been this good

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Beth: The fact that companies

are coming here tells me we've

5

got something that they need.

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Michelle: Throughout the series we'll

show you why there's never been a

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better time to invest in Cape Breton.

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Chad: My advice is, do it

sooner than, uh, later.

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Michelle: Hi, I'm Michelle Samson, and

I'll be guiding you through this journey.

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Why me?

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Well, I'm a 10th Generation settler,

born and raised in a small Acadian

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community in Richmond county.

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But more than that, I believe

in this economic Renaissance,

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because I'm part of it.

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I was one of those young people who left,

but I recently found my way back home

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and started a podcast production company.

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As the host of this podcast, I'll combine

my insider- slash- outsider perspective.

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Economic development, background

and storytelling skills to

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convince you that this really is

an exciting time for my island.

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This podcast is an initiative

of the Cape Breton Partnership.

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Unama'ki-Cape Breton's private sector

led economic development organization.

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This episode is sponsored by the

regional entrepreneurship acceleration

23

program at the Massachusetts

Institute of technology or MIT reap.

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It is a dynamic global initiative that

engages with communities around the

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world to strengthen their innovation

and entrepreneurship ecosystems

26

and transform their economies.

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MIT reap translates leading research

from MIT expert faculty into

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practical frameworks, convenes key

stakeholders who are focused on

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innovation and entrepreneurship.

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And educates regional leaders

through team-based interaction to

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achieve economic and social progress.

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To learn more about our

programs, visit R E a p.mit.edu.

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Cape has a long history of innovation.

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Our most famous early innovator was

telephone inventor, Alexander Graham

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bell who's experiments on the shores

of the Bras d'Or Lake resulted in

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scores of inventions and records

for Canada's first powered flight.

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And the world's fastest watercraft.

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Today, there are over 50 tech companies

on this island of 140,000 people.

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Many are in the bustling

urban area around Sydney.

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But a surprising number are not.

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Others live in the cloud, able to be

located anywhere, but the founders

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are here because there's more to life

than making bucket loads of cash.

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In this inaugural episode of invest

in Cape Breton, we explore the islands

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innovation ecosystem with the help of

three leaders in the med tech, clean

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tech and it sectors who prove that

innovation is thriving on this island.

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We start with Chad Monroe,

the CEO of Halifax Biomedical.

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His medical diagnostics business,

which provides advanced measurements

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to researchers and physicians

was once located in Halifax.

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But for the past 15 years,

it's been in Mabou, a rural

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community of about 1200 people.

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Yeah.

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I was surprised too.

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My first guess was that he grew

up in Mabou, but I was wrong.

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He grew up on the Nova Scotia

mainland near new Glasgow.

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So there were other factors at play.

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Chad: Well, it was between

several locations at the time.

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It was, uh, Mahoen Bay was

one, uh, very strong option.

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And, we looked closely at B Deck

rented, you know, Airbnbs and looked

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for places to rent around beek.

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And then my wife, when we were returning

back to Halifax, she said, oh, I

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had to take you over to this spot

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.

And so we went over to West Mabu and we're like, wow, this is really a lovely spot.

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Let's hang around here for a few days.

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And so we rented A B

uh, Isaac Smith's farm

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And then of course, Isaac asked

us what we were doing there.

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And we told him we were

thinking about setting

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Up a company and and we needed some

places to rent and a place to live.

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And, and, uh, within I think 24

hours, we had many people, um,

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help us out, find a place to rent,

find a place to have as an office.

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That was the start.

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The people were so lovely.

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And then of course we met with many

different people to get advice and

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Some of those people were adamant that

Mabou was the place that we should go

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and, and, um, yeah, I agree with them.

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So, so that's where we went.

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we could be anywhere if we chose Mabu

because that's where we want to be.

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That's one of the most fulfilling things

in life if you can make that decision.

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And innovation-based businesses,

now you can make the decision.

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Michelle: I love that story.

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It is just so classic Cape Breton.

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But from a business perspective

in just about every industry,

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availability of talent is a major issue.

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Many companies will move to major urban

centers like Halifax to find talent.

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So I wondered if Chad was able

to find the people that he needed

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three and a half hours away.

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Chad: From my perspective, a work location

is just like a product, and the employee

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is really buying that product, right?

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They're, they're accepting

that as a place to live work.

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So with, within that group of employees

for any role, whether it's the CEO or

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the head of sales or a, a talented

r and d engineer, there's a a

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sub-market that wants that product

that would love to live in Mabu.

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There's many people working in

New York that would love to live

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in Mabu and work in Mabu instead.

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And when we started 20 years

ago, was really uncommon.

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You really couldn't do

your New York job in Mabu.

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We decided that we didn't care.

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We were gonna do that anyways.

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But, um, you know, that had challenges.

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Today there really aren't any challenges.

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You can do your New York job

whatever it is with a combination of

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in-person and, and remote working,

but you can do it from Mabou.

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I hear a lot about the talent issue

but I, I personally don't, uh, I

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just don't see that as an issue.

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If you pay well, people

come to work for you.

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If you do something that's

interesting, meaningful people

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will come to work for you.

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And the population of the

world's not getting smaller.

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So I think there's more

and more talent available.

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And I, I think Mabu is one of

the nicest places you could

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possibly live and raise a family.

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So why wouldn't you want to do

what you do professionally there?

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Michelle: Roughly, how many of your

people have relocated to come and

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work for you and how many are local?

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Chad: We're really small right

now, so I should say that.

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But at one point we were 23 and

most of those staff were from

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Countries outside of Canada.

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But we had a few Cape

Bretoners return home.

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We had a few people that started with

us when they were young out of, out

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of university, so never really left.

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We were kind of the, uh, United Nations

of, rural Nova Scotia for a while.

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We had a lot of different diverse

talents from all over the world and,

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um, and they were very productive.

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Michelle: Are you finding that

there are any downsides to

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being in a small community?

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Chad: I mean, at the start, there's

lots of downsides, but most of

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those challenges, um, in the last

20 years have really melted away.

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Things are just so much

easier to do, uh, remotely.

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You know, server costs have

dramatically decreased.

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And like just the advent of cloud

computing, and Zoom and I mean,

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we have starlink now, we have

fiber going by our, our front door.

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All the barriers that used

to exist 20 years ago have

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really been, Greatly reduced.

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Uh, and I think the playing

field is greatly flattened for,,

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companies all over the world.

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And that includes in rural Cape Breton.

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There are no excuses . You

can do anything from anywhere.

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You just have to be the

best in the world at it.

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Michelle: Darren Gallop is

another local entrepreneur.

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Who's aiming to be the

best at what he does.

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He is a serial entrepreneur who

started with three businesses

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in the music industry.

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One of them Marcato Digital Solutions,

which provided a back-end management

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system for music festivals and

other events was acquired by a

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Pittsburgh based company in 2018.

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Darren opted for that kind of exit.

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After it became clear that there was going

to be consolidation in event technology.

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Darren: Festivals went from.

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You know, going into the box office and

buying a ticket and getting a wristband

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and going to the festival and all this,

to all of a sudden, like everybody's

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buying their tickets online and then

every festival has a mobile app.

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So you have a mobile engaging experience.

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And then, you know, you're, you have

some sort of streaming component where

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there's, you know, there's all this video

activity and, and live sort of constant

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promotion while the festival's going

on after the festival and everything.

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And then you have these logistical

components that were happening.

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So what does the festival

actually want in the end?

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They don't wanna have six or seven

vendors that they have to wrestle

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with to try to figure out all

these integrations and everything's

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messing up and things are breaking.

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So then it's like, okay, well we're

either a part and we get acquired

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or we're a leader and we drive.

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The growth and innovation, we

partner with the right investors

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essentially leading the rollup, right?

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we were backend, we were the expense

center in backend logistics management

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versus the ticketing provider and

the mobile provider and some of

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these more forefronting events.

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we would've had to build out and, and

penetrate into the market to get our

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revenue stronger in the ecosystem.

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I didn't have a relationship with venture

capital firms and private equity firms.

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I didn't know how this financial

market world, I just came from

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like the music industry into this.

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So it just seemed like, it just seemed

like there were other customer companies

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that were more poised and we were

strategically relying on those companies

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So I saw it like this, okay,

we're not gonna lead the role.

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How do I get get a profitable exit?

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That was the strategy.

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Michelle: While growing

Mercado, Darren and his business

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partner came across a problem.

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The big festivals require their vendors to

meet minimum standards for cyber security.

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Mercado invested a lot of time and

money to rise to those standards.

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And realize that other small and

medium-sized companies who needed

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enterprise class security might not be

able or willing to build it themselves.

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Thus his next business carbide was born.

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He saw big potential and understood

early that he needed knowledge money.

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And relationships to grow it.

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Darren: When I started Carbide, which

was originally started as security,

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we, uh, what I wanted to do was like

just fast track, sort of upskilling

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around like what's going on in the

world and how venture capital works

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more and how, you know, larger

corporate markets outside of music.

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Industry work.

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I did not have re relationships in

the cybersecurity industry and I had

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nothing really to go with in Ven Cap.

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So I, I applied to a bunch of

accelerators: Y Combinator, 500.

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startups, uh, techstars creative

Destruction Lab in Toronto.

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We applied to a local, regional

one in, uh, that was taking

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place out of New Brunswick.

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We got into all of them but we

didn't find out at the same time.

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So we, we got into the local one first.

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So we started that one and then like a

month into that, we got into Creative

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Destruction Lab, which was in Toronto.

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And it was like, okay, well that's,

that's gonna be better for us.

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Cuz we already know a lot of

people in Atlantic Canada.

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That's through Marcato and you

know, like there's, gonna be heavier

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swingers in this Toronto one.

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So, so then we were doing two

and then we got into Techstars.

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We went, we did Techstars

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And yeah,

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like, those were very fast paced,

exposed businesses to learning how to

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pitch, learning how to raise capital,

learning how to run a capital raising

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process, learning more about, you

know, acquisition strategy and, and

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all these things and recruiting and

like how to, how to scale a business.

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the Bo Boston ecosystem.

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is one of the top three, you

know, venture capital ecosystems

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in North America, right?

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So, uh, it was a great opportunity.

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Met a lot of folks, built up

our network substantially.

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Uh, and then, you know, now I have that

alumni relationship where, you can

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basically use the Techstar network to kind

of roll into just about any city in, in

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North America and get warm intros and,

you know, leverage that alumni network.

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Michelle: Were you ever tempted to move

carbide to Boston or Toronto or wherever

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Darren: we definitely considered

opening, opening an office in Boston.

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That was something we, we

considered, before the pandemic, it

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was a thing we were talking about.

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It wasn't a move the company to Boston,

it was to have an office in Boston.

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the idea of a remote company

made no sense to me at that time.

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Boston is gonna be more expensive

than hiring the same talent in, in

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Cape Breton or anywhere in Canada.

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Even just on the dollar value.

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Right?

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So, so like the cost would be greater

but the talent pool there, right?

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When you're in an economy where

there's hundreds of startups

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and there has been hundreds of

startups for the last 10 years.

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And there's, you know, acquisitions

and mergers and there's all

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this ecosystem going on.

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There's people that have

skillsets that we don't have.

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We can build skills, but when you're

trying to build a business really

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quickly and scale really quickly,

and you're trying to do the venture

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capital sort of treadmill of a hundred

percent plus growth year over year,

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it's not a business that that leans

itself well to let's find people

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and build them and grow them, right?

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Like that works when you're building

a business 20, 25, 30% year over

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year building that business locally

like that works in that environment.

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Protocase is a phenomenal example of that.

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Like there's over 400 employees that

work over there and they have have

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come up with really great ways to find

the right people, put them in the right

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spot, and then nurture them into being

exceptional So that was a thought.

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I mean, there was also the, like,

what's the best thing for the business?

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And quite frankly, I would've said

like, the best thing for the business

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is for me to move to Silicon Valley.

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If my life goal was like, you know,

screw me, screw what I wanna do, like,

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let's just do what's the best thing

for making the most amount of money

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humanly possible, the quickest possible.

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I think it would've been moved

to Silicon Valley, cuz it's the

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largest concentration of startups.

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It's the largest concentration of EnCap

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and the, the, the grander of the way

people think there compared to where they

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think anywhere else I've ever been, is

just, just, just, it's awe-inspiring.

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but I guess a fundamental thing when

you're starting a business is like,

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why are you starting a business?

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What are you doing?

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And what do you want for you?

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And what I, I, I wanted to

live here and I wanted to do

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something that had impacts here.

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And, you know, I didn't necessarily want

to go build a billion dollar business

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that becomes, you know, an IPO business,

that I'm happy to build a business that

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grows to, you know, 5, 6, 7, 8 million

in revenue, 70 or 80 employees and get

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a really, you know, really good exit that

hopefully gives me money for myself, but

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also, gives me the opportunity to help

other entrepreneurs and, and sort of

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spawn a bit more of an ecosystem here.

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Right?

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Michelle: what keeps you in Cape Breton?

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Darren: I just like it here.

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Most of the people on the planet

that are important to me are here.

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I find it really fascinating.

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I'm hanging around a lot of the Latin

American community here in C B R M,

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These people are leaving their

homes and coming to here and, you

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know, looking to start a new life.

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And, you know, depending on where they're

coming from, there's all kinds of reasons.

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It could be safety, it could be

financial security, could be both.

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Like, we do have a high degree of

safety and we do have a lot of, you

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know, programs and help for people

who need help, I think, and, we're

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in a good market, I think, to build a

business or, you know, even to work now,

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especially post pandemic now that there's

so much remote working opportunity.

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There's a lot of things that I

love about K Breton and ultimately

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it's, it's the people first.

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Like, I don't think about business.

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Like a lot of people think about

a business very transactionally.

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Like, okay, well where's the best place

for me to go to build this business?

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Alright, I'm going there.

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Right?

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That's, and I respect that.

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That's not how I've ever thought of it.

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Like I look at the business, like how

do I build a business that's gonna

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give me what I want in my life versus

like, what do I have to compromise in

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my life to make the greatest business?

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I'm happy doing it from here.

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And, you know, COVID has been a gift

for me, quite frankly, on a few levels.

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I'll mention a couple of 'em that I

think are really good for people here.

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The first one is we ended up

just hiring people remotely.

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We were able to always go through

this process of, well, we'll

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hire Creton first, Nova Scotia,

second Atlantic, Canada third.

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And then, you know, And then

when we can't find what we need,

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we'll think the rest to Canada.

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Right.

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Um, and even the states

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So, you know, like we had our VP of,

of customer success used to be the

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VP of support for the, for Robert

Harjavec and the Harjevic group.

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But at Toronto, And, you

know, we have probably six or

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seven other people in Toronto.

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Um, we have our VP of sales

and marketing is in Calgary

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the other piece is, it forced

venture capital companies to write

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checks to people they haven't met

or that are not close to them.

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I mean, I have an investor on my cap

table that has, that has given us over

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2 million that I've never met in person.

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what that opens up for people here is

it means that there are a whole bunch

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of venture capital firms out there

that are not in K Breton, that are

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not in Nova Scotia, that are quite

frankly, not even in Canada, that would

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invest in the right company and the

right founder and the right vision.

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then you have like groups like the

Cape Breton Capital Group, which

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is, a small early stage ven cap, uh,

group of, of local, mostly former or

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current operators or high net worth

individuals that have all pulled

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money together to create a fund.

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And, you know, they've already written

a few checks in the market that are

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fairly new fund, um, you know, they

have budget to write more checks.

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Really, there's never been a

time where it, there's been more

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opportunity for attracting money and

investment in your company in Cape

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Breton never since I've been alive.

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Has there been a time that's

been this good for companies?

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Michelle: the venture capital is

becoming easier to find in Cape Breton,

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but that wasn't always the case.

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In one to 21, the Cape Breton

straight region participated in MIT's.

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Regional entrepreneurship

acceleration program.

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As part of a provincial effort to

better understand and drive Nova

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Scotia's innovation capacity.

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The identified barriers to innovation.

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Which included a low per capita

deployment of venture capital

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about half the national average.

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Chad who we met earlier was on the team

and based on the program's findings and

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his mentorship experience he sees the gap

as less of a challenge and more of a blind

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spot that can be corrected with education

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Chad: Well, I think one main blind spot

is just how venture capital works and

342

how funds work and understanding the

perspective of the venture capitalists.

343

You know, educating yourself on

that process is, is important.

344

So some entrepreneurs that I mentor,

they'll, they'll say, well, people

345

have come to me and wanted to invest

in my company and, and I turn them

346

down, uh, because I'm not ready yet.

347

They feel like they need to have the

product fully vetted and the proof of

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concept that's really strong and, and,

um, for certain, you know, software

349

businesses that might be prudent.

350

But this entrepreneur was actually

in the health tech space and I said,

351

uh, venture capital is to support

experimentation on the business model.

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And so that entrepreneur's

barrier was themselves.

353

They didn't think they, they

didn't want to go down that route.

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And that, that, you know, venture capital

is, is just going to ruin my company.

355

And, it's true.

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You have to pick the right investors.

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You have to be very careful

and, and bring in people who

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are aligned with your mission.

359

But you, you can't do it alone.

360

Most teams in Atlantic Canada

are not complete teams.

361

So you might have an accountant as

your cfo F but that that accountant has

362

never taken a company public before,

never done a licensing deal, or you

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may not have a strong IP strategy.

364

It doesn't mean that the opportunities

aren't really strong, and it doesn't

365

mean that the, that the entrepreneurs

don't have a really amazing opportunity.

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Michelle: So in order to support those

entrepreneurs, a decision was made

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to design a made in Atlanta, Canada,

venture capital fund called rising tide.

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If enough support is pledged, rising

tide will offer more than just money.

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It will help lift local startups

to investment readiness over

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the course of three phases.

371

Chad: The first phase is supportive

capital to help the company get

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cleaned up for more formal processes.

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So things like shred loans or IP-based

lending to try to get the companies ready.

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to also do diligence in the company

and see if they're working in something

375

that warrants a, a large investment.

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And then if they do, then you go into

the second phase of the fund, which is

377

filling in those talent gaps to understand

how to bring the company forward and, and

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write much larger venture capital checks.

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So not a 2 million check, not a 10

million check, but get the company

380

ready for a $30 million growth stage

investment and, you know, what do

381

you need to get them to that point?

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And we have many, um, sectors in

Cape Breden that would fall into that

383

category of being able to leverage

and use the $30 million growth round.

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Things like food security and

the bioreactors that are going

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on at the Verschuren Centre.

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You know, us on the MedTech side, there's

other, uh, MedTech software on the island.

387

And then all these emerging technology

areas like green hydrogen, and taking

388

advantage of our, some of our natural

assets, but through innovations,

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you know, solving some of these,

uh, these, uh, innovation problems

390

related to, offshore wind and so on.

391

The opportunities exist here, but we

need to actually create a structure,

392

not just a venture capital fund.

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Like we can't take someone from Toronto

and plop them in to Sydney and give them

394

a hundred million dollars and say, make

investments because they can't apply

395

that same model to, to Cape Breton.

396

So we came up with a very, regional

specific model that would you

397

know, support, identify cleanup.

398

Build, fill gaps and then fund it's

kind of a unique model that we,

399

we would look to pilot and, and

see if it works and it might not.

400

That's the whole point of innovating.

401

Michelle: Earlier, Chad mentioned

that Unama'ki-Cape Breton's economy

402

was home to emerging sectors and

technologies that combine innovation

403

with the Island's natural assets.

404

Much of that innovation is happening at

the Verschuren Center for Sustainability

405

in Energy and the Environment an

independent, clean technology development

406

and deployment facility with a mission

to help Cape Breton and Canada transition

407

to a low carbon circular economy.

408

To learn more about their work.

409

I talked to president and CEO, Beth Mason.

410

From the beginning his vision was clear.

411

Beth: When it was established,

there was a focus on remediation

412

of, of all of the old industries.

413

But those are pretty much gone.

414

And so the idea of the Verschuren Center

from the beginning was to say, where

415

do we need to be in the 21st century?

416

What do we need to build that is

gonna create jobs and, and bring

417

innovation here and put us at the

cutting edge of the global economy?

418

So what, what are the global

problems that also exist here

419

in our own little microcosm?

420

Um, so food security.

421

Which relates to food production

and, and process and climate change.

422

So whether that's mitigation through

projects we do externally, or whether

423

that's with large corporates on pulling

technology into G H G reduction.

424

So those are the world's biggest problems

and they're our biggest problems.

425

Michelle: You may be slightly biased,

but how do you think the Verschuren

426

Center is doing in that mission?

427

Where are we at on that spectrum of

taking it from those, dead industries

428

to, uh, being on the cutting edge.

429

Beth: Well, yeah, I probably am biased,

but I mean, as you know, we draw

430

companies from across Canada and North

America, so I would say, The fact that

431

companies are coming here tells me

we've got something that they need.

432

Um, and that's our business model.

433

And, and because of that, I think we,

along with all the partners we work with

434

in, in our ecosystem and in the national

ecosystem are, are doing reasonably well.

435

Um, could we do better nationally?

436

Absolutely.

437

We could, we're behind on our, on our

national targets for G H G reduction.

438

And one of the gaps I see is,,

just this, what we do, scaling up

439

companies is very capital intensive.

440

It's not the same as the IT sector.

441

And so we need to have more Verschuren

centers that support scale up and

442

the capitally intensive technologies

that are gonna change the world.

443

Michelle: So how exactly is the Verschuren

center helping these companies scale up

444

Beth: it's really a deployment

center if you wanted to put a

445

title on it, it's a safe space.

446

With large capital assets, so

infrastructure for companies to come

447

grow the scale they need to be with their

clean technologies to be able to then

448

go and deploy with an industry partner.

449

There are very few places in Canada

when you, let's say you, you, you

450

innovated in a university and exit that

you can actually go and, and continue

451

that growth without requiring an, uh,

an awful lot of, private investment.

452

So what we do is we build common platforms

i e big equipment so clients can come in.

453

Go through that scale up

process and exit the other end.

454

Uh, likely connected to a

partner in manufacturing

455

that, that we also work with.

456

It's very hard for them to innovate.

457

It doesn't match their return on

investment criteria of, you know,

458

we need a return today or in a year.

459

It costs a lot of money to scale

technologies and so basically we're

460

like a filter for those large companies.

461

Michelle: Are they advising in any way

or are they just sort of tipping you

462

off to, this is what we're looking for?

463

If something walks through,

we'd love to hear about it.

464

Beth: Yeah.

465

So we engage with large

companies in a number of ways.

466

One is to be in touch with what

they need, um, and the other is in

467

mapping their path to net zero.

468

And, and that pathway is, is not

just large GHG reduction from

469

energy, it's also supply chain.

470

So we're cognizant of what they need.

471

A lot of large manufacturers

need the same things and um, it's

472

very hard for them to find that.

473

So we act as that intermediary bridge

between what technologies are there,

474

what are the best technologies, how do

we get them there fast enough, and then

475

connect them with a large offtake partner.

476

Michelle: Okay.

477

And are they within the Atlantic region?

478

Are they across Canada?

479

Are they around the world?

480

Beth: It's interesting.

481

So we have our local partners

within, within Nova Scotia, and

482

then a lot are multinationals.

483

And typically when clients come in,

potentially on the Biomanufacturing

484

side, they've already made some

connections with, uh, a large corporate.

485

So a, a lot are multinationals.

486

Michelle: The assurance centers,

flagship program is ascend bio, which

487

specializes in helping industrial

biotech and agritech companies scale up.

488

Beth: Ascend Bio is a partnership

between the Verschuren Center

489

and Invest Nova Scotia.

490

And, we pull together potential investment

dollars, um, early stage investment,

491

non-dilutive investment, uh, HQ P

funding, and the technical platform.

492

So working together we can bring

more of the needs of each one of

493

those companies as they grow, than

singularly, and I think that and the

494

fact of the assets that we've built.

495

And also the fact that when companies

scale, they keep their IP, um, it,

496

it's hard to find a place where you can

grow your business, um, and, and the

497

technology without losing some of it.

498

We don't take early, early

startup, we take, we call tech

499

readiness level four to five.

500

So what Ascend Bio offers, it's a speed

of development is so much more when

501

you've got that supportive ecosystem

around you much faster than trying

502

to s slug it out alone and bootstrap.

503

And then access to capital assets to

get you to a stage where now you're

504

more investible and then you can

attract funds to deploy either here

505

in Nova Scotia or or across Canada.

506

it was really only three and a

half years ago that we, that we

507

became independent and better able

to deploy this business model.

508

And if you look at the companies

that are going through, the.

509

they're now at series A, which

means that they're, you know, next

510

move is institutional investment

and they're already partnered with

511

people in the Nova Scotia ecosystem

to build that first deployment.

512

So yeah, we're seeing tho

those deployments right

513

now from three years ago.

514

And, and in the middle of that we had

covid and, and all those other challenges.

515

So yeah, it, it's, uh, it's really

great to see those companies

516

having reached those milestones.

517

Michelle: Are you able to speak to a

specific example and you know, sort

518

of what they looked like when they

came in and what they look like now?

519

Beth: Alter Biota has received

quite a lot of press and they

520

have a biographene product.

521

It starts with forestry materials

and then becomes this very high value

522

molecule that brings added strength to.

523

Concrete and displaces some cement, uh,

which has got a very high G H G footprint.

524

So, you know, it's got

a sort of , double duty.

525

Um, and they're partnering with, um,

large company in our forestry sector

526

and with, manufacturers in the brick

industry all here in Nova Scotia.

527

and when they came here, we built a

pilot, um, in our fume hood, and then

528

we built a bigger pilot in SydPort.

529

Um, and now they're

gonna deploy , a plant.

530

So I think it's a really

good example of the progress.

531

Michelle: how many people or how many

companies have come through so far

532

Beth: typically we take, you

know, five to 10 companies a year.

533

So there's 33 companies in

in our portfolio right now.

534

And the ones that came in first, like

AlterBiota are basically graduating,

535

if you want to say into deployment.

536

So as as they move, then more

companies come through, then we'll

537

keep that five to 10 companies a year.

538

And because we're taking, you know,

fairly well de-risk companies, their

539

success rate is that much higher

than if you were early, early stage

540

Michelle: Right.

541

I, I suppose it's still maybe

a little bit early to say, but

542

are they staying in Cape Breon?

543

Are they going back to other places?

544

Beth: We have always said that

they will locate or co-locate

545

where their primary ingredient is.

546

Um, and so if it's forestry, for sure,

they're staying in Nova Scotia, but

547

there are some non forestry biomass

companies that are staying here also,

548

uh, Kraken Sense is an example of that.

549

They have a, a lab on a chip, so it's

a diagnostic tool for, um, pathogen

550

detection in the food industry.

551

And they've partnered with two other

companies here in, in Nova Scotia,

552

um, one here in, in Cape Breton.

553

So, yeah, they, they are seeming to

stay more than I would've suggested.

554

They would.

555

I mean, I think, uh, companies on

our biomanufacturing side whose

556

substrate is pea starch, it makes

sense to colocate in Saskatchewan

557

or, um, methanol would be Alberta.

558

But, you know, certainly

forestry based and, and other

559

innovations we're staying here.

560

Michelle: That's fantastic.

561

And is there something beyond

the access to those resources

562

that you think is keeping them.

563

Beth: I do, um, I typically, you know,

a company will build a platform so it's

564

not just a one product, uh, entity.

565

It's a, a technology platform, and our

hope always was, and I think this is

566

part of the stickiness as we call it.

567

Is that, uh, they build their technical

team here and when their technical team

568

gets big enough, they want to stay.

569

And that same technical team will develop

the second product and the third product,

570

and it makes sense for them to be where

the resources are that we've built.

571

So I think, um, our theory always

was the technical teams will stay.

572

Michelle: And those technical teams, are

they mostly locals or are they coming

573

from outside and then just liking it here?

574

Beth: All across Canada.

575

Michelle: Wow.

576

that's great for Cape

Breton on several fronts.

577

You know, not only keeping these companies

and these jobs here, but also, uh,

578

you know, bringing in new residents.

579

Beth: our first 18 months, uh, the first

12 companies that came through hired

580

106 people , and brought in 56 million

of investment into their companies.

581

So, I mean, those are numbers that, that

in, in Cape Breton, it was very difficult

582

to imagine achieving at one time.

583

Michelle: Natural resources have

underpinned the Unama'ki cape Breton

584

economy for hundreds of years.

585

And they're still highly

relevant as you'll see in later

586

episodes of this podcast series.

587

But on top of that foundation is a

rapidly evolving innovation ecosystem.

588

That Chad thinks will be transformative.

589

Chad: I think the ecosystem in Cape Bradon

is really maturing at a very quick pace.

590

I've seen more changes in the last

five years than in the previous 15.

591

And uh, I think it's, momentum that

is going to lead to substantial change.

592

That people don't expect.

593

Having a rural based MedTech company in

Mabu was, was odd when we started, but

594

I, I don't think it's gonna be anymore.

595

There's gonna be a lot of

really innovative companies.

596

I just, I think that the culture of Cape

Breton is very innovative and I think it's

597

sort of, it's just part of who we are.

598

It's also part of just a

rural environment, right?

599

It's a very resilient and, uh, and

scrappy, resourceful ecosystem.

600

necessity is the motherhood of invention.

601

So in a resource constrained

environment, , it does create

602

a lot of innovative thinking.

603

Cape Breton is a phenomenal place

to do an innovation business from.

604

And I think if you can, uh, overcome

those blind spots there, there's

605

really no, there's no excuses at all.

606

Michelle: Now Darren with his insights

into bigger ecosystems is a bit more

607

reserved about whether tech businesses

should move to Cape Breton saying it

608

depends on your company's unique needs.

609

For example, regular air travel would

mean driving a few hours to Halifax first.

610

Remote businesses might work

better, but they have their

611

own challenges to consider too.

612

And then there's the matter

of how much capital you need.

613

Darren: I mean, there is more access to

capital than there ever has been before,

614

but there's also more access to capital

in other parts of the world right.

615

but I could say like, well there's access

to funding here that you won't get in most

616

markets, that you won't get into Toronto.

617

Or, you know, there's

access to funding grants.

618

There's certainly a lot of access and

you'll stand out as a small, early

619

stage company, which I think can

be advantageous in the early stage.

620

But at the growth stage, it's

probably gonna be harder.

621

Whether it's easy or slightly harder.

622

And, you know, it's probably

a combination of both.

623

Michelle: It is quite flexible for

location, but ag and biotech are more

624

dependent on location and local resources.

625

Beth.

626

thinks Unama'ki-Cape breton has a strong

value proposition for those sectors

627

Beth: Cape Breton's, like a

little Petri dish, we have all the

628

required ingredients for success.

629

So, um, companies for example, that want

to look at carbon capture, companies

630

that want to look at hydrogen production.

631

offshore wind Wave energy, all

of those things surround us and,

632

and it has them all together.

633

And if you're, you know, let's say

for example, hydrolysis from seawater

634

versus regular water, we've got that

right in the same location as wind.

635

So I, I, I think we could do an

even better job of positioning

636

ourselves as the place to go for

some of those energy innovations.

637

Michelle: More than just offering

a great location that says one

638

of the Island's strongest assets

is the supportive ecosystem.

639

Beth: I think the whole of Cape

Breton in particular, and Nova Scotia

640

has incredibly innovative people.

641

Um, we also have a generation right now

of innovators that are, that are kind of

642

exited universities across the country.

643

And so what we provide here in Cape

Breton is that supportive ecosystem.

644

It's working with all the

partners that are here to provide

645

everything a company needs.

646

You can't provide a.

647

Everything as one entity.

648

So I think what's really important

about what we do from Cape Breton is

649

our connection with all our partners

through Nova Scotia and nationally,

650

we couldn't do all of that if we

didn't have those relationships.

651

And I think it's important when we

talk about the Cape Breton ecosystem

652

and innovation that we realize

if we wanna hit global targets,

653

then we can't do those alone.

654

And if we wanna build big

businesses, we can't do that alone.

655

We need to be doing that collectively.

656

So I think that shared innovation

spirit is what we have in spades, um,

657

that one can't find anywhere else.

658

Michelle: Chad echoed that

sentiment of a supportive ecosystem

659

without any prompting I might add.

660

Here's his advice for investors

and entrepreneurs who are

661

considering Cape Breton.

662

Chad: I think, uh, connecting with the

Cape Breton Partnership is a great step.

663

Uh, I think they're very dialed

into the community that's here.

664

Um, and there's a great, uh, Supportive

ecosystem for more entrepreneurs.

665

The entrepreneurs that are in

Cape Breton are very supportive.

666

So they will, um be welcoming

and, and help them set up shops.

667

My advice is, do it

sooner than, uh, later.

668

Nova Scotia has, has been discovered

during the pandemic and there's

669

been a lot of migration into the

province and land prices are going up.

670

So, it's a good time to get in

early and, uh, move to, uh, to Mabu.

671

That's what I would say.

672

Michelle: Now is a good

time for biotech too.

673

The Verschuren center is expanding,

building a 10,000 liter capacity

674

bio manufacturing plant, which will

be one of the biggest vessels for

675

precision fermentation in Canada.

676

For more information on

Halifax Biomedical, Carbide,

677

and the Verschuren Centre.

678

Check out the websites

linked in the show notes.

679

To follow Chad's advice about

connecting with the partnership head

680

over to Cape Breton partnership.com.

681

Or if you just want to dip

a toe browse the tools and

682

resources at entrepreneurcb.com.

683

Next time on the invest

in Cape Breton podcast.

684

We're talking ports with the experts

who can tell you about the assets

685

available today in Sydney Harbor

and the major developments that

686

are coming down the pipeline that

could be absolutely transformative.

687

Subscribe now on your favorite podcast

platform to make sure you don't miss it.

688

On the topic of podcasts.

689

Did you know that the partnership has

another one called welcome to Cape Breton?

690

In every episode, host Norma Jean

MacPhee Zinck talks to new residents

691

of Unama'ki-Cape breton and to the

people dedicated to welcoming them.

692

It's available on all the

podcast platforms too.

693

Our theme music is under my skin

by Glace Bay's own Elise Aeryn.

694

Invest in Cape Breton is produced

by storied places, media, , a

695

proudly Cape Breton owned business

operated by me, Michelle Samson.

696

Thanks for listening.