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Funding and Revenue Go Hand-in-Hand for NL Startups

January 30, 2019 | Written By: Matt

The last few years has been a game changing time for young businesses and entrepreneurs in the province of Newfoundland and Labrador. Startup businesses in the province had largest growth in revenue compared to other regions in 2017 – why do you think that’s the case? Funding. Well, not just funding, it’s intelligent and strategic financial backing of Newfoundland and Labrador’s finest entrepreneurs that have led to the regions success in the startup market.

Entrevestor, where some of this information has been pulled from, states that in 2017 equity investment into the province has been on a steady incline for the past few years but in 2017 spiked up to $18.4 million. Compared to 2016’s total funding investment of just over $4.0 million. It’s safe to say that the growth in revenue seen by some of Newfoundland and Labrador’s most successful entrepreneurial businesses can attribute some of their growth to the strategic funding they have received.

NL Startup Funding, sourced from Entrevestor

In our province, most of the business funding comes specifically from two well-known capital investment firms, Venture NL (Managed by Pelorus Venture Capital) and Killick Captial – who have both contributed to small business support and usually as a collaborative effort. Some of the companies that both firms have invested into include HeyOrca, Sequence Bio, Seaformatics and Empowered homes (creators of the Mysa Smart Thermostat). Both Seaformatics and Empowered homes are NEIA member but we feel all companies who have seen great success deserve an honourable mention.

This local funding has brought interest and support from other regions in Canada and even from capital investment firms from outside the country to local startup companies – like Celtx, Radiant360 and Solace Power. It’s proof that local investment into startup businesses has led to far reaching business growth and now with follow-up rounds of funding from outside the region company growth is being fueled even further.

NL Revenue Growth 2015 vs 2017, sourced from Entrevestor

What does all of this mean? Well it means the Newfoundland and Labrador has seen a significant correlation between an increased funding support and revenue growth. In 2017 the respondents to Entrevestors survey on company revenue growth shows a collective increase of 178 percent over the previous year, with five startup companies reporting sales and revenue for the first time. One of the provinces most successful startups, HeyOrca reported, as of November 2018, that its annual revenue had hit the $3 million mark and showing continued growth.

A lot of Newfoundland and Labrador’s startup companies are alumni of MUN’s Genesis programming that incubates and grows business ideas, alongside its entrepreneurial support partner, the Memorial Centre for Entrepreneurship. Genesis’ recent move into MUN’s new Battery facility, the Emera Innovation Exchange, has led to a larger incubator space for startup businesses with more resources to allow those companies to succeed. Speaking of succeeding, some of these startup companies reporting revenues had only been founded in 2017, like NEIA member SucSeed, showing that our province is still rich with new and innovative ideas that will continue to fuel the entrepreneurial spirit in Newfoundland and Labrador.

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