Written by OMERS Ventures partner Brian Kobus
Last spring, I published a post which included some high level thoughts on trends in AutoTech and a summary of Canadian technology companies active in this area. A lot has happened over the past year, so it felt like a good time to update the Canadian AutoTech Startup Ecosystem Map and share some observations on the current state of the market.
Global AutoTech Investment
At a macro level, investment in AutoTech startups reached new highs in 2017, with a rising number of VC firms, automakers, suppliers and tech companies making investments.
The data above is from CB Insights, which defines AutoTech companies as those that use software to improve safety, convenience and efficiency in cars. So this data excludes much of the investment made in areas such as ride-hailing services and electric vehicle development. Of the deals included in the CB Insights data, investments in companies developing Autonomous Vehicle (“AV”) technologies accounted for the lion’s share, including almost half of all AutoTech deals in 2017 and 76% of the total dollar amount invested.
However you slice it, it’s clear that investment in the future of mobility is on the rise. And there’s room for continued growth in 2018 and beyond when you consider that global automotive R&D spend exceeds $100Bn per year.
Looking Back, Looking Forward
In the chart below, I’ve included what I see as the dominant waves that have occurred over the past few years as well as some thoughts on where we may see the focus shifting to over the next couple years:
On the ride-hailing front, there’s a chance we may see things get shaken up by a well-funded player such as Zoox, a big tech company like Google or by a surprise entrant (Amazon?). But it feels like ride-hailing will be a tough space for new startups to gain share in.
Autonomous driving technology is maturing quickly, but there’s still a lot to figure out, which should drive continued opportunity for startups — as well as acquisitions. However, now that many large players have a core AV platform they are building on, I believe we’ll see fewer large exits in the near term in this area and more smaller buys (e.g. less than $100M).
Chinese auto makers and technology companies loom large for the future of the global auto industry and North American startups should factor in competition from China when developing their product and growth strategies.
Canadian AutoTech Startup Ecosystem Map
In putting together the map below, we applied several parameters to reduce the scope to something that approximates 1) Canadian 2) AutoTech and 3) Startups. For instance, I’ve included only those companies which are:
- based in Canada, or have a significant portion of team in Canada;
- focused primarily on AutoTech (e.g. I’ve excluded companies in the Smart City category, such as parking solutions, intelligent traffic management or charging infrastructure — look out for a separate post on Smart City trends and startups later this year); and
- less than ~10 years old.
I’ve also included several subcategories under each of four major categories, which roughly equate to the Autonomous, Connected, Electric and Shared categories in last year’s map. Note that I didn’t include categories for which I didn’t have companies to include.
A few highlights from the past year:
- Quebec City-based LeddarTech announced a US$101M financing in September 2017
- Vancouver-based Mojio announced a C$30M financing in November 2017
- Palo Alto & Toronto-based Autonomic was acquired by Ford in January 2018
- OMERS Ventures added its first AutoTech portfolio company in 2017, Wateloo-based Acerta Analytics.
We’ll be keeping close tabs on the AutoTech space both in Canada and the US in 2018 and look forward to backing more great teams working on innovative products in this area.
Given how quickly the automotive and mobility landscape is changing, we plan on updating the map above periodically — if you’re building an AutoTech startup in either Canada or the US, we’d love to hear from you.