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Job creation in the Atlantic Canadian Tech Ecosystem in 2020

2020… A year all of us will surely remember!

Future generations will ask us what it felt like to live through a global pandemic with lockdowns, not being able to see loved ones, and economic disparity.

The COVID-19 Impact Survey

In March, when COVID-19 was declared a pandemic, many of us went into worst-case scenario planning.  At Concrete Ventures, we even launched a COVID-19 Impact Survey to try to better understand what impacts this may have on the ecosystem.

There was definitely an air of optimism in the results of that survey. In hindsight, perhaps those optimistic entrepreneurs could sense that they would get through this just like any other roadblock they’ve encountered.

When I look back at the results from our COVID-19 survey, I remember thinking how optimistic the entrepreneur’s views felt. Meanwhile somewhere inside, I was much more pessimistic.

Looking back at these results and how I was interpreting them definitely reinforced to always trust the entrepreneur. After all, they seem to have an incredible ability to predict the future.

A good year for job creation in tech startups

As the months went on, it became apparent that the technology industry would remain unscathed (other than of course key industries like hospitality and travel).  You could almost even now say the industry is quite frothy.

It ended up being a good year for the startup industry in Atlantic Canada as the number of jobs grew to over 10,337 jobs with 654 net new jobs being created in 2020.  Of the companies that I’m tracking 40% hired employees, 29% had no change and 31% had less staff than the beginning of the year.

More good news

In addition, there was some impressive news that came out of the region in 2020:

Naturally, I’d like to be upbeat about the job creation data in Atlantic Canada for 2020. However, it is challenging given the high numbers of unemployment across the region, our nation, and the globe.

While our industry has seen a boom, there are many other industries that have seen a bust and many are still displaced from work.  If you happen to be an entrepreneur who had a good 2020 and is planning on a good 2021, I would implore you to consider taking a chance on that recent graduate who has shown you a lot of grit, or that unemployed individual who could be a great employee if you just invested in the development of their professional skills.

If we all did that, our industry would have a blowout year compared to previous years, and who knows, it could even make a dent in those unemployment numbers.

We release job creation data each quarter for the Atlantic Region. If you’d like to receive future job data from the industry, please subscribe to our newsletter, by clicking here.

Top Tech Atlantic Canadian Employers in 2020

Sorted by net new job creation in 2020.

Verafin, Newfoundland

Biovectra, PEI

LuminUltra Technologies, New Brunswick

Genoa Design, Newfoundland

Mariner Partners, New Brunswick

CarbonCure Technologies, Nova Scotia

VidCruiter, New Brunswick

Proposify, Nova Scotia

Dash Hudson, Nova Scotia

Mysa, Newfoundland

The Rounds, Nova Scotia

Sonrai, New Brunswick

Colab, Newfoundland

CeltX, Newfoundland

New Survey Highlights Impact of COVID-19 On East Coast Startups

Our COVID-19 Startup Impact Survey offers an in-depth look into the impact of COVID-19 on Atlantic Canadian startups. Atlantic Canadian entrepreneurs are resilient and dedicated to their visions even through challenging times. Evidently, COVID-19 has brought new challenges to many startups. While some sectors are harder hit than others, there is no doubt that everyone shares the burden of decreased economic activity and increased concern for the health of friends and family.

The impact of COVID-19 on jobs

We have compiled the results and broke them down into three startup categories: pre-revenue, early stage and established startups. 

Layoffs are one of the first topics that come to mind amongst employees and employers during any crisis. Since the beginning of the pandemic, 15.84% of respondents reported laying off staff. Of those layoffs, 63% have come from early stage startups, 31% came from pre-revenue startups and established startups represent only 6%.

On the flip side to this, entrepreneurs are optimistic about revenue growth. Early stage startups appear the most optimistic, representing 62% of those anticipating revenue growth. Pre-revenue startups and established startups represent 23% and 15% of those anticipating revenue growth respectively. It is important to note the forward-looking statements should not be read as guarantees of future performance.

The impact of COVID-19 on investments

The investment environment is changing rapidly throughout the pandemic. Investors initially went on the defensive to support existing portfolio companies, creating a new challenge for those companies attempting to raise funds. There are a few interesting things to note related to investment activities from this survey:  

  1. The majority of entrepreneurs are actively seeking investment. Pre-seed and angel investments are the most sought after.
  2. The majority of entrepreneurs feel their valuations will stay the same or increase as a result of COVID-19.
  3. 74.7% of startups have less than 12 months of runway. With the majority having less than 9 months.

Entrepreneurs appear optimistic about the investment environment. One of the key things that help drive investment and valuations are progress towards meaningful milestones. A conflicting statistic present in the data was that close to half of the respondents indicated that COVID-19 had a negative impact on their business yet entrepreneurs are optimistic about their valuations. There appears to be a disconnect here.

What’s more, many respondents indicated challenges related to sales and marketing, specifically generating top of the funnel leads. If sales and marketing activities fail to yield results it will jeopardize important milestones and will affect a startup’s ability to raise follow-on financing. With the majority of entrepreneurs holding the opinion that things will return to normal late 2020 or early 2021, it is important to remember runways will be extremely short at that time.

Government support

The Federal Government has been spending a tremendous amount of resources on supporting Canadians throughout the pandemic on all fronts. While our data details which programs are being used by entrepreneurs, it is important to recognize that there is still more support needed in the community. 16.83% of respondents indicated that their business is not eligible for any programs, and pre-revenue companies are feeling left out when it comes to these support programs.

In terms of additional support, the top three requests coming from the survey center around raising capital, sales/marketing and runway extension. All three of these requests show that entrepreneurs, while optimistic, are still cautious about what lies ahead.

While there remains optimism in the ecosystem, we must be careful not to glaze over the risks should the challenges of COVID-19 last longer than anticipated.

Download The Report


Job creation Q1 2021

The Q4 2019 job creation data shows a large reduction of jobs in the startup ecosystem in Atlantic Canada. The number of jobs declined by about 350, bringing the number of employed by the sector to 7,950. I anticipated that trend to continue in Q1 2020 with the COVID-19 outbreak.

However, a number of startups continued to hire in Q1 2020. About 261 net new jobs were created across 978 startups. The total amount employed in the startup scene reached 8,211. I believe most of the hiring happened in January and February then stalled out in March.

The job creation data reveals a number of startups that did lay off employees in industries that were hard hit by COVID-19 such as travel, hospitality, sports, etc… It seems the layoffs didn’t really hit hard in other industries, but I anticipate that will happen in Q2 2020. I’ve already received reports of a number of layoffs in April.