Archive for the ‘Focus’ Category

Recode Co-Founder Calls Out Silicon Valley Indifference to Social Issues

Friday, July 15th, 2016

Silicon Valley is making billions solving problems of convenience, such as instant food delivery, for “the 1%” while ignoring the social and economic problems of the urban ecosystem it depends on, Recode Co-Founder and Executive Editor Kara Swisher says.

Speaking on the second day of StartupFest in Montréal, Swisher called San Francisco “assisted living for millennials,” with conveniences such as instant food delivery provided through mobile apps by local startups working against a backdrop of homelessness and poverty.

She called on startups to break out of their “self-reinforcing” culture and affect the real world around them more positively.

This disconnect between Silicon Valley startups and San Francisco’s less fortunate residents gained global attention in 2014, when tech companies started providing buses to allow workers to commute to their campuses. The ease with which startup talent can commute has helped turn San Francisco into a “bedroom city.”

The social problems haven’t been completely ignored. A recent poll of San Francisco residents found that they identified homelessness as the number one social problem in the city. A startup founder who called the city’s homeless “grotesque” was excoriated for making his comments.

Swisher said she believes in the ability of startups and capitalism to solve social problems, a notion shared by fellow speaker Ari Gleisher. Gleisher, ex-of intelligence tech company Palantir, implored the audience to examine where they could do the most good in the world and aim their efforts carefully.

See all of TechPORTFOLIO’s up-to-date Startupfest coverage on social media by following us on Twitter, Facebook and LinkedIn – and now on Instagram.


Shopify Leaders Praise Canada’s Startup Environments

Thursday, July 14th, 2016

Canada is the best place for a startup to knuckle down and work on a product that they believe in, Shopify’s Tobias Lütke said on the first day of Montréal’s Startupfest.

Lütke, in an discussion with Re/code’s Kara Swisher, told the audience that Canada didn’t lend itself to explosive growth, but is a good place for a startup to build a growth culture: a sentiment shared by tech industry thought leader Tim O’Reilly:

Still, a more subdued environment isn’t an excuse for complacency.

It’s critically important to “keep connecting with the front line,” an effort that Blackberry didn’t make, Lütke said, referring to the once-dominant smartphone maker based in Waterloo, Ontario. “Stay hungry,” he warned.

To achieve this, bring people on your team that think as founders and builders, not just joiners, said Shopify COO Harley Finkelstein. It’s important to keep your team focused, which is why he worked to keep Shopify’s culture open despite its rapid growth.

“We’re a company that sets our philosophy around personal growth where people are comfortable with the uncomfortable,” he said.

TechPORTFOLIO is covering Startupfest until July 15. Get more of our insights by following us on Twitter, Facebook and LinkedIn – and now on Instagram.

Why Canadian Fintechs Are Falling Behind

Monday, July 11th, 2016

Fintech may be hot in Canadian investment circles, but deal-making lags that of other countries, signalling a funding gap that could weigh on the country’s global competitiveness.

Canadian fintechs ranked fifth in volume of global VC deals, capturing 24 of 860 total deals in 2015, according to Andreessen Horowitz-sponsored Pitchbook. Canada also ranks sixth in overall funding, securing $117 million (U.S.) of $12.5 billion in global investments, or just under one per cent of funding distributed worldwide.

Canada fintech

For a country whose banks and their bottom-lines are the envy of the financial world, those numbers aren’t inspiring. They’re red flags.

The number highlights a glaring issue in Canada’s fintech industry: funding disparity. The funding gap between U.S. and Canadian startups is not surprising, given the size of the U.S. market. The bigger concern is that Canada ranks 13th in average funding per VC deal globally — far behind the world’s most prominent tech ecosystems, and only just ahead of Russia.

Canada ranking ahead of another tech ecosystem titan, Israel: but this is no cause for celebration either. The so-called “smart nation” has seen an increase in number of $20-million plus fintech funding rounds this year. The trend will continue if fintech initiatives such as The Floor gain momentum.

Canada’s lacklustre performance is apparent when you look at others’ statistics: According to KPMG, the U.S. market volume for alternative finance was $113.43 per person compared with $5.82 for Canada, a 95 percent discount, according to a column in the Globe and Mail by entrepreneur Ray Sharma, managing partner of Toronto-based Extreme Ventures. He’s calling for a “much deeper relationship between banks and startups” in Canada to help address the problem.

With fintech adoption set to triple in Canada this year, and considering Canada’s big six banks reported a profit of nearly $35 billion in 2015, the Canadian market is lucrative. So where is the disconnect?

Two to Five Years Behind

Risk averse VCs, credit regulations around peer-to-peer lending, and shallow relationships between startups and incumbents are all cited as problems. Peter Misek, a partner at BDC IT Venture Fund, recently told Bloomberg that Canada is two to five years behind in fintech.

Banks are responding to the threat of fintech, cutting fees and facilitating online transactions. While Canadian consumers welcome the changes, they’re defensive tactics, not innovative, long-term strategies. The reactive stance suggests Canada’s big banks haven’t fully grasped how disruptive fintech will be to their business.

Startups aren’t the only threats either. More established tech giants such as PayPal, Amazon, and Apple are also infringing on the financial industry’s territory, adding to an already increasingly competitive landscape.

Canadian fintechs might be too focused on the banks and not paying attention their global counterparts, which puts them at risk of falling behind on the international stage.

For example, U.K.-based GoCardless raised $13 million earlier this year and is eyeing the Canadian market. Sweden’s Bambora has made a number of aggressive moves to expand into the North American market, including the acquisition of Beanstream. If regulation changes are imminent, they could open the floodgates for non-Canadian fintech startups.

Partnerships Lacking

The words “collaboration” and “partnership” are used often when discussing the future narrative of fintech in Canada, but have yet to yield meaningful results. Innovation hubs within banks are still subject to slow-moving cultures and red tape, and lack the development talent needed to keep pace. Canadian fintechs might be relying on an acquisition strategy that prevents them from become true competitors to the banks.

Neither approach is conducive to much-needed disruptive change.

Whether or not banks and fintechs can transform Canadian banking is still up for debate. One thing is clear: the Canadian fintech storyline needs to change, or the homegrown industry risks falling even further behind.

What Is Fintech? The Definitive Fintech Glossary

Wednesday, July 6th, 2016

From cryptocurrency to DAO to robo-advisors, fintech is adding new words to the evolving business vocabulary as the industry continues to grow.

As the lexicon expands, here are some key fintech terms you need to know:

Blockchain: A digital ledger of transactions shared across a distributed network. Data on the blockchain is theoretically impossible to change or remove, making it a candidate for a shared secure global infrastructure. It is the technology that underpins Bitcoin.

Bitcoin: A form of encrypted digital currency. Created in 2009 under the pseudonym ‘Satoshi Nakamoto’, Bitcoin is made, stored, exchanged, and transferred digitally without the need for a bank. According to CNN, “though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs” – ensuring anonymity.

Cryptocurrency: An encrypted digital or virtual currency such as Bitcoin. Investopedia notes that because it is not issued or distributed by a central authority, it is “theoretically immune to government interference or manipulation.”

Crowdfunding: Funding a venture through raising small amounts of money from a large group of people, as opposed to seeking funds from a venture capitalist, angel investor, or corporate sponsor. Individuals can provide funds as donations or in exchange for a product or service. Kickstarter and Indiegogo are popular crowdfunding platforms.

DAO: A Decentralized Autonomous Organization (DAO) is akin to a digital organization “formed by groups of like-minded individuals with specific projects and goals in mind.” Its “software operates autonomously” and its by-laws are coded into the Ethereum blockchain, making them irrefutable.

Ethereum: Ethereum is a decentralized, public blockchain platform that ‘runs smart contracts’: peer-to-peer contracts that use cryptocurrency. By leveraging the blockchain, contracts are not subject to “downtime, censorship, fraud or third party interference.”

Fintech: A short form for ‘financial technology’. According to Fintech Weekly, it is “a line of business based on using software to provide financial services. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software such as banks.”

Mobile Payment: Also known as “mobile money, mobile money transfer, and mobile wallet,” mobile payment refers to “payment services operated under financial regulation and performed from or via a mobile device.” Most major financial institutions facilitate some form of mobile payments including e-transfers and credit card payments.

P2P Lending: Short for Peer-to-Peer Lending, it refers to lending and borrowing transactions that occur directly between individuals, and do not require facilitation or approval from a financial intermediary such as a bank. Examples include Lending Club and Lending Loop.

Payment Gateway: According to Webopedia, a Payment Gateway is a “service that automates the payment transaction between the shopper and merchant. It is usually a third-party service…that process, verify, and accept or decline credit card transactions on behalf of the merchant through secure Internet connections.” Prominent examples include PayPal and Moneris.

Robo-advisor: A robo-advisor is an online, automated advisor that provides financial advice or portfolio management, providing answers based on data and algorithms. Examples include Betterment and WealthSimple.

Africa Pushing Mobile Banking Into Fintech Conversation on Twitter

Tuesday, July 5th, 2016

If the blockchain ends up dominating the financial services sector as much as it’s dominating on Twitter, banks are in trouble.

Looking at the global fintech conversation on Twitter, blockchain — a technology that has the potential to destroy banking as we know it — leads the way, even ahead of bitcoin. But there’s another fintech trend creeping into the conversation that might be getting lost in all the noise: mobile banking.

Blockchain Twitter word cloud

Though the topic shows up in our global analysis on Twitter, it’s especially popular in Africa, where mobile banking is the norm.

According to data from the World Bank’s Global Financial Inclusion Database, mobile banking is most popular in Botswana, where nearly half of residents with a financial account have reported making a mobile banking transaction.

Mobile banking use is only likely to grow. Sub-Saharan Africa will add more than 400 million new smartphone connections by 2020, according to GSMA Intelligence.

Ripe for disruption

What does this mean for mainstream financial services in Africa? Be afraid. More than one-third of revenue could be at risk, according to Accenture.

San Francisco-based startup @branch_co, for example, raised $9.2 million to bring digital financial services to mobile phone users in Sub-Saharan Africa.

Founder and CEO @mattflannery told TechCrunch that Branch’s free-to-download app is a “branchless bank for the next generation.

“…I’m building this with the intention that it will serve everyone much the way that Twitter started out as a thing that people used at South by Southwest, but ended up playing a big role in the Arab Spring,” he said.

Blockchain may be hogging the headlines, but mobile banking has enormous potential to impact lives in Africa.

Fintech a Massive Market Opportunity For Startups

Friday, July 1st, 2016

When it comes to funding startups, fintech reigns supreme.

In 2015, according to Accenture, global fintech investment reached $22.3 billion (U.S.) — up 75 per cent from $12.7 billion the year before. The rush to develop the alternative, online platforms offering financial services is moving more quickly than many other areas of tech innovation.

Banks and brokerages occupy a central position in every economy. In Europe in 2014, the total assets of the banking sector were €26.8 trillion. In the U.S. in 2015: $15.75 trillion.

Who wouldn’t want a piece of that?

Tech startups have started quietly joining the financial sector with the aim of providing a new world of solutions, including payment and loan services, currency and investment platforms, and wealth management tools. These have been the domain of banks and governments for centuries.

One factor increasing pressure on financial services — and creating big opportunities for startups — is a large wealth transfer happening between the generations.

“There is a $40 trillion intergenerational wealth transfer that is in progress, from a generation that has traditionally relied on an in-person advisor relationship to a generation that expects much more of a technology-augmented experience,” top Vanare executives Richard Cancro and Alexey Sokolin said in a recent Financial Technology Partners report.

This transfer combined with the millennial generation’s expectation of a more technology-augmented experience — which traditional banking providers have been slow to provide — is creating a moneyed user base keen to embrace new approaches to banking.  

While regulations remain a hurdle, particularly in the wake of the 2008-09 global recession, fintech startups are expected to jump through every hurdle required to cater to the coveted millennial demographic, which is expected to make up two-thirds of the global workforce by 2030.

For July, we are exploring the vast market opportunity that is fintech.

Our stories will feature insights from key sector figures such as BMO InvestorLine President Julie Barker-Merz, and Adam Nanjee, head of the fintech division at MaRS.

Watch for our interviews as well as explainers and exclusive entrepreneur profiles, as we explore one of the hottest topics in tech today.

Short-Term and Medium-Term Consequences of Brexit on UK Tech

Wednesday, June 29th, 2016

This piece was originally posted on Medium by William McQuillan and is reproduced here with the author’s permission. 

Technology leaders in the UK were one of the loudest voices speaking out against #Brexit. Multiple polls showed the technology sector strongly in favour of remaining, with only 15% in favour of leaving. Over 60 venture capitalists signed a letter backing to remain, with experienced investors like Robin Klein warning that a Brexit could be a Doomsday for the UK startup ecosystem.

The UK technology sector is growing 34% faster than the rest of the economy, and it has been a huge success in recent years — garnering the UK international attention as technology hub, culminating in large exits and pulling in strong talent from all over the globe.

Maybe we, as the tech community, assumed that the rest of country wanted the same things we did. This is perhaps why the outcome has come as such as a surprise to so many of us — the voices that we were surrounded by were not reflective of a large portion of the UK.

Now that Brexit has happened — should we expect large changes? Is Doomsday coming? Currently, there remains far too many uncertainties and undecided variables to make long term predictions. However, there are some considerations worth taking into account in the short- and medium-term for UK technology startups.


Uncertainty is the killer for the short term. With Cameron stepping down, we don’t know who will lead the UK economy. Leaving the EU is a concept  —  how the UK subjectively will do it is still to be decided.

The European Union has become so entrenched in many aspects of the UK financial, regulatory, and legal economy  —  the process to untangle those is still unsure. At the moment, this uncertainty is fueling a lot of the huge movements we are seeing in the equity and currency markets.

During unstable periods, most financial investors will move away from technology startups, who are seen as high-risk. This will make it less appealing for angel and high-net worth individuals to invest until markets have stabilised.

This morning, I’ve received 5+ phone calls from entrepreneurs both in and outside the Frontline portfolio  —  all concerned with how Brexit would affect their current round of funding.

If they are a UK company who is raising in US Dollars  —  that is now a positive for them. If they are a UK company raising in Pounds from international investors  —  that is a positive for their investors. Most technology companies are global companies and most venture capital investors are long-term investors, so something like Brexit should not prevent a deal from closing.

Where this is not true, though, is for any potential M&A activity. Until there is more stability, I expect to see a severe decrease or altogether halt of technology acquisitions in the UK.

In the short-term, folks who are considering joining UK companies from abroad will be less likely to move. Anecdotally, I know two couples (one from the EU, one from the US), both of whom had been planning to join the UK tech sector. Both are now seriously reconsidering whether it is the right place to move now, a lot of their fear powered by uncertainty of the future.


As markets begin to stabilise, we will see currencies and equities settle — most likely at much lower values than before. This lower-valued pound will mean that UK companies will be less competitive in attracting top talent, one of the most important abilities for fast-growing technology companies.

Free movement of talent is probably one of founders’ biggest worries. Being part of the EU means that a UK company has open access to a talent pool of over 400M people, instead of the mere 60M in the UK. Most likely, the UK will move towards having a relationship with the EU similar to that of Norway. Hopefully, this will mean that trade and immigration will be similar to what it is now.

Depending on how these trade and immigration agreements are made, it could make it significantly less appealing for international companies to have their European HQs in Britain. Many of the largest financials institutions such as HSBC, Barclays, Goldman Sachs, and many others announced prior to the vote that they would be moving large number of employees out of the UK should a Brexit vote occur. Even now, it is being reported that Morgan Stanley already plans on moving 2000 staff to Dublin or Frankfurt.

Some have stepped back on these comments this morning, but I see this as more of a market-calming tactic. I believe that many international companies will look to move operations elsewhere in Europe. This will be equally a problem for the early-stage tech companies based in London/the UK  —  a significant talent drain is never good for the market.

The funding environment for venture capital funds will also be affected. The European Investment Fund is the largest investor in European VC funds and are invested in many UK VCs. If the UK is no longer in the EU, this source of capital will most likely dry up and venture funds will need to seek alternative sources of capital — which is already in short supply. The same will go for the many favourable grants that tech companies receive.

While UK companies will have less capacity to buy foreign companies, they will seem cheaper to international buyers and investors. In the medium-term, this could lead to an uptick in acquisitions or international investments in the UK.

Many other questions remain to be answered: What will happen to UK fintech companies that have EU bank passporting that allows them to operate without obtaining extra banking licenses in other EU countries? Will this lead to London losing it’s fintech crown? How will the digital single market be affected for UK companies?

Currently, London is the centre of the European tech startup ecosystem. However, other European cities will take advantage of these post-Brexit issues. Hubs like Stockholm, Dublin, and Berlin could leverage this uncertainty to attract talent, capital, and companies away from the UK. It could lead to London losing importance in Europe as a tech and startup centre.

As a pan-European investor, today is a sad day for me. However, I hope that this instability is short-lived and that, moving forward, Europe continues to lower barriers for trade and people — so that great companies can continue to grow with as little friction as possible across the continent.

To all ambitious UK-based tech founders, let’s continue to focus on the future — growing your teams, closing your funding rounds, and, as you always do, evolving to tackle any challenge that stands in front of you.

Tech Startup Ecosystems Missing Out On Diversity

Monday, June 27th, 2016

The lack of women in a progressive and disruptive sector like the startup tech world is, unfortunately, still a topic for discussion in 2016. 

Women are making a lot of headlines lately. There’s one running for U.S. President. Their numbers in political positions are on the rise. More women are also graduating from college and university than men.

But a huge gender diversity gap persists, especially in tech startup ecosystems. While articles — see here and here — boast that female-founded startups in the U.S. have increased to 18% in 2014 from 9% in 2009, that number is still objectively deplorable.

This should be a huge disappointment for the startup tech industry given the growing body of research showing that gender diversity isn’t just the right thing to do — it can boost profits for companies and investors alike. In fact, Bloomberg recently ran a backtest and discovered a gender-focused investment strategy would beat the S&P 500 by 141% over the past 10 years.

So why would an industry known for game-changing innovation still lag when it comes to gender diversity.  

To explore this, we sorted through some of the numbers and found that women in the tech workforce still account for a meagre 30%. When looking at CEO positions in the top 100 tech firms, the numbers are worse. And for the funding sector, the low percentage of female VCs and disparities in funding is, frankly, embarrassing.

Our coverage also includes profiles of a few women who are breaking through barriers, including Sonia Strimban of MaRS and Shopify’s Julie Hache.

Lastly, we’re conducted our own survey for women in tech — on the site but also across our social media channels — to get a better sense of how they’re faring when it comes to treatment in the workplace and opportunities for advancement.

Here’s what our respondents said:

UK Startups Worried About Talent and Funding After Brexit Vote

Friday, June 24th, 2016

After the United Kingdom voted 52% to leave the European Union, the startup community in London and Scotland — both of which voted to remain in the union — has been thrown into turmoil.

Debbie Wosskow, founder of the lobby group Sharing Economy UK, told London tech magazine The Memo: “Make no mistake, the news this morning is seismic. It is disappointing that we are in this situation and there is no doubt that the weeks ahead will be turbulent for many different reasons.”

North of the border in ‘Silicon Glen,’ the situation is much the same. John Peebles, the CEO of Administrate, an Edinburgh-based training management startup with $1.54 million of funding, told The Herald that a great deal of government-backed enterprise funding and talent came from Europe.

The Brexit decision has been disappointing to virtually all Scottish startups, Peebles told TechPORTFOLIO. “We’re in a relatively small market here in Edinburgh, and because there is a lot of activity, many Scottish startups are looking to hire into their team for growth. That’s just become a lot harder, potentially, now that the wider EU may start to require a work visa.”

One feature of the EU is free movement of labor; anybody born on the continent with a European passport can take a job in another European country. Although this is a startup-friendly policy, greatly widening the pool of candidates, Leave leaders campaigned against it.

Fred Destin, partner at venture capital firm Accel, told the Financial Times that the “fluidity, speed and simplicity” of this system was a huge benefit, and that the suggested replacement — a points-style system, like the one used in Canada or Australia — was too cumbersome for small organizations.

Turmoil aside, the European Union itself is keen to push quickly and make the process as fast — if not pain-free — as possible, with the President of the European Parliament looking at legally speeding up the steps, saying that uncertainty is the “opposite of what we need.”

Brexit leaves unresolved issues and no timelines or known conclusions. The labor market and free trade won’t be settled for a long time, and the pound sterling is plummeting.

Some see the final conclusion — when it arrives — as a positive. Jim Duffy, CEO of Entrepreneurial Spark, which describes itself as the UK’s largest free accelerator, says that businesses are trading across the world, not just Europe.

“Entrepreneurs will simply just get on with it and what’s important today is that they continue to focus on planning to ensure that they can navigate any turbulence in the coming days and weeks.”

Peebles agrees. “On the one hand, the instability of Brexit and a potential second independence referendum are unsettling, but on the other hand, we’re lucky that most tech startups are focused on global markets.”

Still, what many are describing as an emotional, ‘lizard-brain’ reaction from the British people is likely to have serious political consequences in the years ahead for the UK and the EU.

Toronto Culture Best Worldwide for Female Entrepreneurs

Thursday, June 23rd, 2016

Toronto has the most female entrepreneur-focused culture in the world, according to a study by the Dell Women Entrepreneur Cities Index.

The survey, released at the White House’s Global Entrepreneurship Summit, measured 50 world cities and ranked 25. For culture, the criteria included:

  • Female entrepreneur role models
  • Networking groups
  • Social and print media on women entrepreneurs
  • Policies around equal pay and hiring
  • Paid maternity and paternity leave

The methodology explains how and why the decision was made.

A city’s culture, while less tangible, is believed by women entrepreneurs to be a critical enabler for their participation in commerce… [we measure] the prevalence of relevant mentors, networks, and role models, and the predominant attitudes and expectations of that community toward women entrepreneurs.

Overall Ranking Lags

Canada’s biggest city fared less well in the overall ranking on the status of women in technology. Toronto ranked sixth, taking into account factors including access to capital and talent availability.

The overall ranking means more work needs to be done, given the emphasis that federal and provincial Canadian governments place on workplace diversity.

In Toronto, 19 percent of startups had female founders and 25 percent had female employees, compared with averages of 24 percent and 29 percent, respectively, for Silicon Valley.

Jim Diffley, a senior director at one of the study’s backers, research firm IHS, told Fast Company that a whole new set of metrics had to be created to produce the ranking:

“This is not something that has been done before,” Diffley said.

Top 10 cities for female-friendly culture

  1. Toronto
  2. New York
  3. Sydney
  4. Munich
  5. Singapore
  6. London
  7. San Francisco Bay Area
  8. Paris
  9. Stockholm
  10. Sao Paulo

Cover image contains icons licensed under Creative Commons 3.0, by Gerald Wildmouser