Federal program helping Canadian cleantech startups expand into U.S. wins kudos

A federal program that opens the door to key U.S. markets and investors for Canadian clean technology startup companies is winning praise from participants.

Canada’s Trade Commissioner Service revamped the Canadian Technology Accelerator (CTA) Cleantech program a couple of years ago, increasing its level of services and expanding in-market events to four cities: New York, San Francisco, Denver and Boston.

“Now it’s a single entry point for Canadian companies for the four most robust cleantech markets in the U.S.,” Evan Cohen, a CTA program manager and trade commissioner in San Francisco, told RE$EARCH MONEY. “We wanted Canadian companies to enter a program where they could meet with potential partners, customers and investors, without having to do months if not years of groundwork to try to develop relationships, get more materials, and identify who and who not would be a good fit for them.”

Cohen manages the program with his trade commissioner colleague Ian Philp in New York. Although the program runs for five months each year, Canadian company CEOs or founders are required to be in the U.S. for only six working days. There is no cost for participants, except for their travel.[rs_quote credit="Evan Cohen" source="Canadian Technology Accelerator"]It can sometimes be challenging for a new technology to find a market fit in Canada. If you can’t find that market validation with your first customer, it’s hard to raise investment dollars. And if you can’t raise investment dollars, you can’t commercialize your product. We’re trying to break that negative cycle. [/rs_quote]

The competitive program starts in June, after all applications have been reviewed by a six-person selection committee of U.S.-based venture capitalists. “Rather than have the Canadian government identify who would fit for these markets, we have actual investors from the U.S. making selections totally based on who has the strongest technology, and who has the best market fit and the best teams,” Cohen notes.

Last year, seven Canadian companies were chosen to participate from about 60 applicants. Cohen hopes to increase that to 10 to 15 companies each year.

The program’s New York office is partnered with CleanTech Open, the world’s largest cleantech accelerator, which provides four mentors to each Canadian company selected. Throughout the summer, these mentors help the companies understand the procurement process, regulatory environment and sales cycles in the U.S., introduce them to business people in their respective cleantech sectors, and advise on investment fundraising in the U.S.

Cohen and Philp also work with each Canadian company, to identify their potential U.S. markets and any gaps or market barriers preventing them from attracting U.S. investment and selling into the U.S. “Sometimes it can be simple things, like your pitch slide deck isn’t like the ones that U.S. investors see all the time and doesn’t play to the company’s strength in a way that U.S. companies do,” Cohen says.

Six days of intensive learning

In October, the Canadian company leaders participate in an intensive three-day program in San Francisco and Denver. They get market intelligence and advice from dozens of people, including late-stage cleantech CEOs, a top startup law firm, venture capitalists and executive pitch coaches. Then they pitch to groups of potential U.S. customers and VCs in both cities. [rs_related_article slug="feds-ramp-up-trade-commissioner-service-to-better-support-scaleups/"]

“It can sometimes be challenging for a new technology to find a market fit in Canada,” Cohen says. “If you can’t find that market validation with your first customer, it’s hard to raise investment dollars. And if you can’t raise investment dollars, you can’t commercialize your product. We’re trying to break that negative cycle.”

Participants also visit the U.S. National Renewable Energy Laboratory (NREL) in Golden, Colorado, which has a world-class cleantech R&D facility. They tour the facility, learn how to access its resources and then pitch to NREL researchers who choose three Canadian firms to work with. The CTA program pays for up to 40 hours of NREL laboratory time for each of these firms, for technical validation and problem solving.

“If you’re looking to acquire a customer or an investor in the U.S., to be able to say you worked with NREL or they validated your data is a huge wind at your back,” Cohen says.

In November, the companies go through a similar and just as intensive three-day program in New York, which includes a day focused on Boston’s cleantech market.

Cohen and Philp track the growth of and investment in the program’s cohorts over each year. “Traditionally, we see a pretty significant return on investment for our program, on the economic impact in Canada, Cohen says.

Alberta cleantech CEO praises program[rs_related_article slug="conservative-climate-plan-long-on-technology-short-on-targets/"]

Karen Schuett, co-founder and CEO of Calgary-based Livestock Water Recycling (LWR), participated in last year’s CTA program. Her company’s automated manure management technology reduces a livestock operation’s overall volume of manure, while producing fertilizer and a renewable, high-quality water source.

LWR’s systems are installed at large livestock facilities, such as dairy farms, in the U.S. The company was looking to expand that market and raise investment funding in the U.S, when Schuett discovered and applied for the CTA Cleantech program. “It was really everything I could have hoped for,” she says. “To be exposed to all these different players in the market in an organized way, we’d never get an audience like that.”

Through the program, her company secured new business and investment. Schuett was so impressed with her pitch coach in New York, she hired her as an ongoing consultant.

After going through the CTA program, LWR went on to become one of only nine startups chosen out of 270 applications from 67 countries to participate in the THRIVE agri-food innovation accelerator based in Silicon Valley. Last month, the Alberta company won the 2019 THRIVE-Forbes Innovation Award, which includes a $200,000 investment from SVG Ventures, at the annual Forbes AgTech Summit in Salinas, California.

Schuett credits a lot of her company’s success to the things she learned in the CTA program. “It’s a great program and I think you can really change the trajectory of your business going through it.”

R$