It’s an energy that Brad Parry says is almost palpable in Calgary these days. But it’s not the type of energy you’re used to talking about.
The newly minted president and CEO of Calgary Economic Development says an unprecedented digital transformation has quickly established Calgary as top-tier tech city – a “destination of choice.”
“It’s a hive effect. You’re starting to see companies like AWS (Amazon Web Services), RBC, EY (Ernst & Young) and Infosys show up here, and people are starting to notice,” he says.
“The reason they are coming here is because they see what’s happening. They’re seeing the talent, They’re seeing the opportunities. They’re seeing the potential in this city.”
In December, Calgary Economic Development and Edmonton Global released a joint Alberta Energy Transition Study that recognized half of the province’s 945 cleantech companies are now in Calgary. Parry, in fact, points to the goal of having 1,000 core tech companies in the next nine years.
Interestingly, he notes the tech companies calling Calgary come are becoming incredibly diverse – from fintech to clean tech and software to life sciences.
“At the end of the day, Calgary is always going to be the energy capital of Canada. But you’re starting to see other forms of energy take hold and grow,” he says. “Life sciences, agriculture, fintech, creative industries … you look at all these other sectors that are starting to build their own ecosystems, and that’s what is going to make us successful.”
BiohubX knows a thing or two about building ecosystems. The Calgary-based not-for-profit recently opened an innovative 9,100-square-foot shared lab facility in the city’s northwest designed to support early-stage life science companies through vulnerable scale-up and expansion phases.
BiohubX co-founder and executive director Jeff Hopper says the facility was desperately needed here in Calgary to nurture, and often retain, many start-ups in the life sciences sector.
“The challenge for many of these companies is that when they go to make that shift from a university research lab to a commercial space, it’s incredibly expensive. They are often faced with coming up with millions of dollars when they still don’t have any revenue,” he says.
“And what happens is a lot of these companies either get extracted from the Alberta economy and taken to other places in the world where they can get the support they need. Or even worse, they don’t survive.”
The shared lab space, dubbed Biospace 1, is meant to de-risk some of the stepping stones these companies need to take when they are seeking to commercialize their respective technologies. Established out of a partnership with DynaLIFE Medical Laboratories, which is using a third of the space for its diagnostic operations, the facility was fully leased within four months of opening.
“We always knew this was going to be a resource that would be heavily sought after,” says Hopper. “The response so far as provided all the validation we needed to prove out the model and demonstrate there is this vibrant innovation community in the life sciences and bio technology sector in Alberta that needs options.”
BiohubX’s success story is becoming a common one. In its recent Alberta Technology Deal Flow Study, the Alberta Enterprise Corporation revealed that the province’s technology industry is flourishing. It points to “exciting signs of maturity,” with almost 40 per cent of companies exceeding annual revenues of $1 million, a 66 per cent increase since 2018.
One of those companies, Helcim, took a giant leap forward earlier this year. In late March, the payments company raised $16 million in Series A funding.
Helcim founder and CEO Nic Beique, whose company employed just a handful of staff members several years ago, says they intend to use the funds to launch new products and add more than 150 employees over the next two years.
“It’s accelerated a lot faster than we thought,” says Beique of his company, which allows business to accept credit, debit and bank payments.
Starting as what Beique describes as a simply bootstrap business limited to reselling merchant services, Helcim relaunched in June 2020 as independent payments company – and it’s never looked back. In 2021, the business saw a 400 per cent growth in its merchant base, and the team going from 50 to 115.
“We’ve been able to deliver a service that we feel … small businesses are looking for,” says Beique.
Helcim’s success story hasn’t been limited to its growth, either. While many tech companies have struggled to find, train and retain talent, Beique says Helcim has been fortunate in avoiding that so far – in part due to what he calls a unique approach to recruitment.
“We don’t have that hard of a time finding people, and the reason traces back to our bootstrap ways. We have traditionally focused on hiring junior grads straight out of school who were not being given many opportunities from other companies,” says Beique, noting the median age of its staff is 29.
“It’s turned out to be our superpower. We’re able to very effectively turn our new hires into your professionals very quickly, it’s allowed us to scale-up very efficiently.”
As much as companies like Helcim are leaving their mark on the local economy, they are reshaping the downtown landscape, too.
In February 2020, Helcim left its tiny quarters in the Blackfoot Industrial Park and signed a lease for 20,000 square feet in Millennium Tower on 2nd Avenue S.W. in downtown Calgary. Beique says the opportunity was too good to pass up.
“For a long time in tech, it was about creating these campuses. And for people to stay in these campuses, they had to create things like cafeterias and gyms,” he says. ”And when you think about it, downtown is just a giant campus. There’s so much life here. So we thought, why not participate in it and be part of that big campus rather than try to build something on the edge of the city?
“We have no regrets two years in. There’s a certain energy to being downtown, and we’re seeing that more now that many people are returning to the office.”
Helcim is not alone, either. In January, fellow fintech Neo Financial expanded its footprint in Calgary’s downtown with 113,000 square feet of office space across The Edison office tower, and a converted empty retail floor at the Hudson’s Bay downtown.
Meanwhile, Symend, which creates a digital engagement platform for financially at-risk customers, took occupancy of 79,000 square feet at First Tower on First Street S.E. in January 2021.
After being hit hard by a downturn in the energy sector and the global pandemic, vacancy rates in the core have hovered around 30 per cent at what real estate experts are calling “watershed levels.” On the flip side, this has created once-unthought-of opportunities for companies like Helcim and Symend, notes Alexi Olcheski, Calgary-based executive vice-president and principal with Avison Young
Olcheski notes that it’s still a long road to recovery, with the tech sector accounting for only five to eight per cent of total downtown space. However, he says this latest wave is a positive sign, and has played a role in the first positive absorption numbers in the core in two years.
“It’s not significant enough now to make a major impact on vacancies yet. However, a lot of these organizations are scaling up, so the anticipation is that these numbers will grow over time,” he says.
“Overall, it’s nice to see some positivity surrounding Calgary’s downtown for the first time since pre-pandemic. The sentiment is good, activity is strong, people are back.”