Canada’s high tech triangle continues to grow

Hard to believe but almost 1,000 tech companies call Waterloo, Ont. their home.

One of the region’s breakout companies is eLearning developer Desire2Learn who has raised $80 million from two top venture funds recently.

Couple that with Communitech $30 million seed funding and Canada’s High Tech Triangle has cracked the code on creating great tech companies,” said Iain Klugman, CEO of Communitech. “This news from Desire2Learn, a company which has been on a growth trajectory and has already hired more than 200 people in 2012, is the latest global success story to emerge here.

The investment in Desire2Learn is the largest Series A round to date for a software company in Canada. It involves U.S.-based New Enterprise Associates (NEA) Inc., which recently raised a $2.6-billion fund – and OMERS Ventures, the venture capital arm of one of Canada’s largest pension funds.

“With a pool of talent and superlative innovation under way in the Region, infusion of capital to jump-start new ventures is the next step to fueling even more companies like Desire2Learn,” Klugman said. “Canada is now ranked the second most attractive country in the world for venture capital according to the Global Venture Capital and Private Equity Country Attractiveness Index,” he added.

The tech sector in Waterloo Region comprises some 400 startups, hundreds of small-medium enterprises, and large enterprises that have grown to global fame from Waterloo roots. In addition to Desire2Learn, Waterloo Region is home to Canada’s largest tech company Research In Motion, Canada’s largest software company OpenText, Canada’s largest satellite company COM DEV, and one of the world’s top producers of visual technology displays, Christie Digital Systems Canada Inc.

Desire2Learn, like OpenText, was created with brainpower honed at the University of Waterloo. Desire2Learn CEO John Baker started the company as a fourth-year university student in 1999, and his venture now employs more than 560 employees – expanding daily – serving 700 clients and more than eight million eLearners around the world. The company has extended its solutions beyond K-12 schools and post-secondary institutions, to government and corporate clients.

Tech entrepreneurship in the High Tech Triangle is nurtured organically through programs designed to attract students to maths and sciences in the K-12 system, followed by post-secondary education at two universities or colleges in the region, and then through a collaborative community of some 1,000 tech companies, with coaching and support from deliberate ecosystem support programs, Klugman said.

One of those programs fostering innovation is Communitech’s HYPERDRIVE, a $30 million+ startup incubator which is currently shepherding its first cohort of eight startups through a three-month initial phase that will include a stint in New York City at the heart of the financial market.

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