A federal program that has helped hundreds of Canadian technology companies expand to the United States is in the midst of an international expansion of its own.
Since late 2018, the Trade Commissioner Service’s Canadian Technology Accelerator (CTA) program has expanded to Tokyo, Taipei, Hong Kong and Singapore.
An expansion to Mexico City is scheduled by the end of March, with Berlin, London and New Delhi set to open before March, 2021, said Ailish Campbell, the chief trade commissioner and assistant deputy minister for international business development at Global Affairs Canada.
“To scale your company, you’ve got to sell your product,” Ms. Campbell said. “Our program is about introducing people to buyers.”
The program provides Canadian technology companies with office space in a foreign city, usually in conjunction with a local partner, for several months (while the length varies from city to city, most companies participate for six to eight months). Companies usually send one to three representatives. In order to participate in the CTA program, companies must have an existing product or service, be able to demonstrate market traction and have an experienced management team, Ms. Campbell said.
While the main focus of the program is helping participants meet potential customers, CTA can also provide mentoring and introductions to Canadian companies that have successfully expanded to that country.
Last fall, Waterloo-based Mappedin, which makes mapping software for indoor environments, such as shopping malls, became one of the first companies to join the CTA program in Tokyo.
Hongwei Liu, the company’s chief executive, said being in a country as a guest of the Canadian government can give businesses extra credibility.
“We try to do our best to reach out to customers ourselves, we have a good team that does that. It makes a big difference, though, when the Canadian consulate locally in Tokyo is reaching out on our behalf,” he said.
Canada’s trade commissioners are a “tremendous resource” for businesses, Mr. Liu said. “They were the ones who helped us get our early customers in the Philippines, in Australia, in the U.K., to some extent, and now in Brazil.”
But businesses still have to take the initiative, Mr. Liu said.
Before going to Japan with the CTA program, Mappedin’s sales rep for the region “spent months learning Japanese, researching the market [and] reaching out to customers,” Mr. Liu said. “Unfortunately, not every company comes this prepared or has the time do to that.”
Expanding internationally is “critical” for Canadian technology companies, said Charles Plant, the founder of the Narwhal Project, which studies Canada’s innovation economy.
“You put all sorts of R&D into building a technologically oriented product, you just won’t get your money back if you’re selling only in Canada,” he said. “Anybody who’s building products, or software as a service, or anything like that; medical devices, pharmaceuticals, the only way to make a return on your money is to sell outside of Canada.”
While Mr. Plant describes the trade commissioner service as one of the best programs that Canada has for technology companies, he says that’s not always the case with government support for innovation. He started the Narwhal Project to study why Canada’s innovation economy hasn’t seen performance improvements despite billions of dollars in spending by the federal and provincial governments.
There’s a lot of opportunity for Canadian technology companies in Asian markets, but those markets can be difficult to enter, said David Wynne, president and CEO of Green Technology Asia, a Singapore-based consulting firm that helps technology companies, particularly cleantech firms, enter Asian markets.
“Many of these markets require companies to show a commitment to the market. It’s not enough to come over to the market, make a quick business trip, make some connections and make a sale and consider that market development,” said Mr. Wynne, a former Canadian diplomat.
Participation in the CTA program is free. While the program doesn’t invest in companies, it can make introductions to investors.
That was one of the big benefits for Montreal-based Polystyvert, said Solenne Brouard Gaillot, the company’s founder and CEO.
Polystyvert, which has developed a process for recycling polystyrene, one of the world’s most-used and least-recycled plastics, had raised money in Canada, but Ms. Brouard Gaillot said she also wanted to have investors in the U.S. as her business went international.
She says the program, which the company went through in Silicon Valley in the spring of 2019, helped connect her business with investors who understood her industry.
“The time you need to mature the technology is much longer in cleantech than in IT,” she said.
Ms. Brouard Gaillot, who participated in the program with several other companies founded by women, said she would have preferred to have been in a group with other cleantech companies, rather than tech companies in general. But, she said, things still “went very well”
More than 600 companies have participated in the CTA program since it began in 2009, Ms. Campbell said.
Those companies have raised more than $626-million in capital, generated more than $230-million in new sales and created around 2,400 new jobs in Canada after participating in the program, she said.
One of program’s main goals is to help companies expand internationally while remaining headquartered in Canada.
“American companies are very interested in buying and acquiring Canadian technology, let’s be perfectly frank. We need to be more aggressive about giving entrepreneurs options to grow their companies in Canada,” Ms. Campbell said.