Toronto has a new startup hub, and it’s right in the downtown core on Spadina Ave.
This morning, IBM in partnership with Ontario Centres of Excellence (OCE) and the Government of Ontario launched the IBM Innovation Space that aims to help businesses propel into the global marketplace.
Who’s Behind It
The IBM Innovation Space is part of the IBM Innovation Incubator Project, a $54-million initiative funded IBM and the Government of Ontario’s Jobs and Prosperity Fund. Other partners include the SOSCIP Research Consortium and members of the Ontario Network of Entrepreneurs (ONE).
That mix of partners is typical of how Ontario supports its tech sector. The province puts in money, a large company contributes technology and expertise, and a network of research consortia and regional startup centres helps find the companies that can use it. SOSCIP’s computing resources, for example, are acknowledged in a 2022 Nature paper on photonic quantum computing from researchers at Toronto’s Xanadu, which notes that SOSCIP was supported by the federal government’s southern Ontario development agency and by IBM.
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The First Tenants
The IBM Innovation Space houses startups and technology companies that use IBM Watson and cloud technologies. The diverse group of tenants include LifeLearn, whose Sofie veterinary software uses IBM Watson to search through diagnoses and literature, and BigTerminal, a personalized financial information aggregator.
Both are examples of applying AI to a specialist field rather than building general-purpose technology. A veterinarian with a sick animal in front of them doesn’t have time to search through textbooks and journals. Software that can find the relevant information quickly, and show where it came from, saves real time in a busy clinic.
“Access to the latest technology, including cognitive and cloud, as well as these kinds of resources and support, are so often out of the reach of start-ups – that’s why we created this space,” said Dino Trevisani, President of IBM Canada. “We want to help them innovate, get to market and expand more quickly to ultimately become the disruptors of tomorrow.”
What Companies Get
The IBM Innovation Space will provide companies with capacity, networking and infrastructure along with new IBM cloud and cognitive business technologies. In addition, experts will offer mentoring, support services, education, and legal counsel to assist in companies’ growth.
Why AI Was the Bet
Cognitive technologies and artificial intelligence are becoming increasingly attractive to investors, especially after social media startups have peaked. CB Insights predicts that funding of AI-enabled startups will reach $1.2 billion in 2016.
That bet was right, and the numbers grew far beyond the 2016 forecast. Crunchbase data shows that global funding to AI startups reached close to $50 billion in 2023, up 9% from $45.8 billion in 2022, even as overall venture funding fell 38% that year. The largest rounds went to foundation model companies like OpenAI, Anthropic and Inflection AI, which together raised $18 billion in 2023.
What Happened Next
The technology at the centre of the Innovation Space changed quickly. In late 2017, IBM folded its Bluemix brand into IBM Cloud, saying the two names had “grown to be synonymous.” In May 2023, IBM unveiled watsonx, a new platform for foundation models and generative AI, as the whole industry turned toward the kind of large language models that power today’s chatbots.
LifeLearn’s Sofie is still going. The company now markets it as Sofie AI, a veterinary decision support tool that answers clinical questions from trusted references and shows the source material behind every answer. LifeLearn says more than 300 practices use it and that it draws on more than 40,000 pages of veterinary content.
That’s a useful sign of what lasts. The “cognitive” branding of 2016 has faded, but the core idea behind tenants like LifeLearn, using AI to help experts find answers in a mountain of specialist information, turned out to be exactly where the industry went.
What It Means for Startups
Corporate incubators like this one can give a young company things that are hard to get any other way: technology credits, office space, mentors, and introductions to big customers. They’re worth taking seriously, especially for startups working in specialist fields where credibility matters.
The lesson from the years since is to build on the problem, not the platform. The brand names around AI have changed several times since 2016. Companies that stayed focused on what their customers needed, rather than on any one supplier’s technology, were the ones best placed to adopt whatever came next.
Frequently Asked Questions
What is the IBM Innovation Space in Toronto?
The IBM Innovation Space is a startup hub on Spadina Avenue in downtown Toronto, launched in 2016 by IBM with Ontario Centres of Excellence and the Government of Ontario. It houses startups that use IBM Watson and cloud technologies.
How was the IBM Innovation Space funded?
The IBM Innovation Space is part of the IBM Innovation Incubator Project, a $54-million initiative funded by IBM and the Government of Ontario's Jobs and Prosperity Fund.
Which companies were early tenants?
Early tenants included LifeLearn, whose Sofie veterinary software used IBM Watson to search diagnoses and literature, and BigTerminal, a personalized financial information aggregator.
How much has AI startup funding grown since 2016?
CB Insights predicted AI startup funding would reach $1.2 billion in 2016. Crunchbase data shows global funding to AI startups reached close to $50 billion in 2023.
Is LifeLearn's Sofie still available?
Yes. LifeLearn now markets Sofie AI as a veterinary decision support tool that answers clinical questions from trusted references, and says more than 300 practices use it.