{"id":838170,"date":"2026-07-31T13:02:09","date_gmt":"2026-07-31T13:02:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/838170\/"},"modified":"2026-07-31T13:02:09","modified_gmt":"2026-07-31T13:02:09","slug":"how-st-johns-has-become-an-unlikely-hub-for-tech-startups","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/838170\/","title":{"rendered":"How St. John\u2019s has become an unlikely hub for tech startups"},"content":{"rendered":"<p class=\"c-article-body__text text-pr-5\">Some investors were skeptical that Adam Keating and Jeremy Andrews could build a successful tech company in St. John\u2019s.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Newfoundland, affectionately referred to as \u201cthe rock,\u201d is far from Silicon Valley\u2019s Sand Hill Road, the California thoroughfare densely populated by the offices of venture capital heavyweights such as Sequoia Capital and Andreessen Horowitz.<\/p>\n<p class=\"c-article-body__text text-pr-5\">In 2019, an investor told Mr. Keating he\u2019d finance their engineering software company, CoLab AI Inc., but only if they agreed to relocate to the Valley.<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/FU6HDQTVVJH4DCL36IC77FWUPE.JPG?auth=a55aacef8d3c2983e6d0f23957666acdfe50334491755215ec1aa4ad505bbf00&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"0\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Adam Keating, CEO of engineering software company, CoLab AI Inc. His Newfoundland-based company is on track to become a unicorn \u2013\u00a0a private technology company valued at US$1-billion or more.Greg Locke\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cYou cannot build a billion-dollar company in St. John\u2019s,\u201d the investor told him, Mr. Keating recalls. \u201cI straight up said to the guy, \u2018There is a billion-dollar company in St. John\u2019s. I just can\u2019t tell you who it is.\u2019\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">Several weeks later, a St. John\u2019s-based financial crime-fighting technology company then called Verafin Inc. <a href=\"https:\/\/www.theglobeandmail.com\/business\/article-newfoundland-software-company-verafin-secures-largest-ever-canadian\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/article-newfoundland-software-company-verafin-secures-largest-ever-canadian\/\">announced<\/a> a $515-million financing deal that valued the firm at close to $1-billion. <\/p>\n<p class=\"c-article-body__text text-pr-5\">Today, St. John\u2019s is home to a thriving ecosystem of tech startups, as graduates from Memorial University eschew the Valley in favour of Newfoundland\u2019s rugged coastlines, laid-back lifestyle and lower cost of living. Newfoundland and Labrador tech companies raised close to $300-million last year, comprising 78 per cent of Atlantic Canadian startup funding, <a href=\"https:\/\/entrevestor.com\/2020\/entry\/nl-again-leads-region-in-funding-stats\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/entrevestor.com\/2020\/entry\/nl-again-leads-region-in-funding-stats\">according to data firm Entrevestor<\/a>, despite making up less than a quarter of the region\u2019s population.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Some credit Verafin with emboldening a new generation of founders in the province who are bucking a broader trend of Canadian entrepreneurs leaving for foreign tech hubs. The company proved that with the right ingredients, a billion-dollar tech company can be built anywhere, even a remote island in the North Atlantic Ocean.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cIt took those guys doing that to make me believe that I can do that,\u201d Mr. Keating said. <\/p>\n<p class=\"c-article-body__text text-pr-5\">St. John\u2019s may seem like an unlikely place for a tech boom. Originally a fishing outpost, Newfoundland feels cut off from the rest of the world, and in a way, it is. The fog that often shrouds the island can get so thick that it brings air travel to a halt. <\/p>\n<p class=\"c-article-body__text text-pr-5\">But a visit to St. John\u2019s yields plenty of evidence that tech entrepreneurs have made a home here. <\/p>\n<p class=\"c-article-body__text text-pr-5\">At Bannerman Brewing Co., a firehall converted into a brewery and cafe a block from Water Street in the heart of the city, locals sip $5 lattes and tap away on their laptops beneath soaring ceilings and exposed beams. The North Head trail, a 1.7-kilometre loop characterized by jagged rocks plunging dramatically into the ocean, is populated by Patagonia-clad professionals hurriedly getting their steps in while speaking into their AirPods. And the Co. Innovation Centre, a tech hub housed in a former Rona store near the airport, has the relaxed-but-focused vibe of a trendy co-working space.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cI don\u2019t think that old adage holds, that you have to relocate to Silicon Valley,\u201d said Chris Gardner, chief strategy officer at Spellbook. The legal AI software provider, which was founded in St. John\u2019s, raised US$50-million last year in a financing led by Silicon Valley\u2019s Khosla Ventures.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThis is part of the opportunity for Newfoundland and Canada. People used to say, \u2018If the VCs can\u2019t come to your office that afternoon, they\u2019re not going to invest in you.\u2019 That\u2019s just not the case anymore,\u201d Mr. Gardner said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Case in point: Mr. Keating\u2019s CoLab <a href=\"https:\/\/www.theglobeandmail.com\/business\/technology\/article-intrepid-growth-partners-leads-first-canadian-deal-backing\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/technology\/article-intrepid-growth-partners-leads-first-canadian-deal-backing\/\">raised US$72-million<\/a> recently from a group of investors that includes prominent American firms such as New York-headquartered Insight Partners and Y Combinator, the San Francisco startup accelerator known for helping launch companies such as Airbnb, DoorDash and Stripe.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The province\u2019s homegrown tech firms run the gamut from marine technology company Kraken Robotics to smart thermostat maker Mysa to Bluedrop ISM, an e-learning company born out of a class project at Memorial University.<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/PV2YNIQZKVFO5PP5YWIXM2O5DY.JPG?auth=0b1671f412435a5d139cff55414deaa59c996e4b93f4b8c05d7dba7824548138&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"1\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Bernard Mills, executive vice president of Kraken Robotics Inc. The marine tech company was founded in 2012 in Mount Pearl, near St. John&#8217;s.Darren Calabrese\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cFor an economy that\u2019s very, very resource-focused, this is a different economic lever that\u2019s really starting to power the growth of the Newfoundland economy,\u201d said Chris Moyer, founding partner of St. John\u2019s-based Pelorus Venture Capital Ltd.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Newfoundland\u2019s success at retaining tech talent defies the trend of a nationwide exodus of founders documented in a <a href=\"https:\/\/www.theglobeandmail.com\/business\/article-tech-founders-leaving-canada-at-accelerating-rate-survey-finds\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/article-tech-founders-leaving-canada-at-accelerating-rate-survey-finds\/\">recent report<\/a>. The study, which was published by Toronto venture-capital firm Leaders Fund last year, found that only 32.4 per cent of what it defined as \u201chigh-potential\u201d Canadian-led startups launched in 2024 were headquartered in the country, a figure that had exceeded 67 per cent from 2015 to 2019. (The study looked at startups that have raised at least US$1-million, with most of their senior leaders educated in Canada.) <\/p>\n<p class=\"c-article-body__text text-pr-5\">Tackling the longstanding brain drain \u2013 the outflow of top Canadian talent to larger markets, particularly the United States \u2013 has become a high priority as Canada looks to grow its economy amid a trade war with its increasingly volatile southern neighbour.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Last year, Ottawa announced an <a href=\"https:\/\/www.theglobeandmail.com\/canada\/education\/article-ottawa-plan-canadian-universities-recruitment-talent-research-chairs\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/canada\/education\/article-ottawa-plan-canadian-universities-recruitment-talent-research-chairs\/\">ambitious plan<\/a> aimed at poaching academic talent from the U.S. as the Trump administration slashes federal research funding: a $1.7-billion fund to create 100 research chair positions across fields such as climate science, food and water security, and defence technologies. But in order to attract and retain talent, Canadian communities will need to think holistically about what it takes for entrepreneurship to thrive.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Mr. Moyer believes that Newfoundland\u2019s economic diversification holds an important lesson for Canada: \u201cWe\u2019re always going to be a country of resources, because we have them, but we shouldn\u2019t be reliant on them.\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">Canada\u2019s newest province \u2013 Newfoundland and Labrador joined Confederation in 1949 \u2013 was a seasonal camp for European cod fishers before it became a permanent settlement. The extraction of resources, from minerals to fish to oil and gas, accounts for <a href=\"https:\/\/investorrelations.gov.nl.ca\/economic.aspx\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/investorrelations.gov.nl.ca\/economic.aspx\">roughly a third<\/a> of the province\u2019s GDP.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Resource-dependent economies tend to be cyclical, and for much of the province\u2019s history, many Newfoundlanders have left the island in pursuit of opportunities elsewhere.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The cod moratorium implemented by the federal government in 1992 triggered an exodus. Decades of commercial overfishing had depleted the cod population, and the ban aimed to allow the area\u2019s signature fish stock to recover. But it also left tens of thousands of people unemployed virtually overnight, sending shockwaves through the local economy. The population of Newfoundland and Labrador contracted from 580,109 in 1992 to 509,047 in 2007, even as Canada\u2019s overall population grew.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Thankfully, Newfoundland had more than just fish. It also had barrels and barrels of oil, although they were difficult to access on account of being trapped beneath the ocean floor.<\/p>\n<p class=\"c-article-body__text text-pr-5\">In 1979, Chevron and its partners discovered the massive Hibernia oilfield just over 300 kilometres off the coast of St. John\u2019s. Building a gravity-based offshore platform for extracting the oil was an ambitious undertaking, as it needed to be able to withstand the impact of roaming icebergs. When the project finally started producing oil in November, 1997, it kick-started the province\u2019s offshore energy industry.<\/p>\n<p>Final preparations to the gravity-based offshore platform are completed in 1997 ahead of the start of oil production in November of that year. The discovery of the Hibernia oilfield off the coast of St. John\u2019s kick-started the province\u2019s offshore energy industry and created thousands of jobs, though many of them were temporary.<\/p>\n<p>         Jonathan Hayward\/THE CANADIAN PRESS; Greg Locke\/REUTERS<\/p>\n<p class=\"c-article-body__text text-pr-5\">Infrastructure projects like Hibernia can result in significant employment opportunities. Equinor\u2019s Bay du Nord project, a proposed deep-water oil development about 500 km northeast of St. John\u2019s, promises to create thousands of jobs if it moves forward.<\/p>\n<p class=\"c-article-body__text text-pr-5\">However, many of those jobs are temporary. It took thousands of workers to build Hibernia, but as of March 31, the number of people employed by the project \u2013 which, contrary to expectations, continues to produce oil after more than two decades \u2013 had dwindled to just over 1,000.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The development of Newfoundland\u2019s offshore oil and gas sector created a talent pipeline to Alberta, and over the years many Newfoundlanders have moved to Calgary to work in the oilsands. Others were lured to Ontario\u2019s growing tech sector during the dot-com boom of the late 1990s.<\/p>\n<p class=\"c-article-body__text text-pr-5\">As the growth of the internet contributed to globalization, an opportunity arose for Newfoundland\u2019s economy to diversify away from natural resources and infrastructure projects, and towards something less cyclical and more enduring \u2013 tech.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Verafin was \u201cground zero\u201d for the province\u2019s technology boom, says Steve Follett, CEO of St. John\u2019s-based subsea management software company Enaimco.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThey created the ecosystem that we\u2019re all feeding off now,\u201d Mr. Follett said. \u201cHalf my people are from Verafin.\u201d<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/YXT77SP63FHVRAS3Q3IX4LSMDY.JPG?auth=215566dea4815bb47f29de8613387c3886d93b602c6867f342d63ac948281b67&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"2\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Nasdaq Verafin (formerly Verafin) is considered to have been &#8216;ground zero&#8217; for the province\u2019s technology boom.Greg Locke\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">Verafin was founded in 2003 by three engineering students from Memorial University: Jamie King, Brendan Brothers and Raymond Pretty. Originally, the three co-founders had set out to build AI software allowing mining robots to identify patterns in rock formations that would help them navigate dangerous environments. Then, an early investor told them the pattern-recognition technology they were working with could also help banks solve a problem: detecting criminal activity amid a global crackdown on money laundering.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThat was the pivot that they made at the time,\u201d said Stephanie Champion, executive vice-president and head of what is now called Nasdaq Verafin.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Verafin\u2019s first customer was the Newfoundland and Labrador Credit Union. The partnership gave Verafin a better understanding of the problems that credit unions faced in trying to combat financial crime. <\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cOnce we solved those problems really well for credit unions in Canada, we thought, it\u2019s a really similar problem set that credit unions in the U.S. are trying to solve. So we expanded into credit unions in the U.S.,\u201d Ms. Champion explained.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Next, Verafin moved into serving regional banks. Eventually, it scaled all the way up to serving the largest G-SIBs, or Global Systemically Important Banks, in the world, despite being headquartered far from every global financial centre.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The $515-million transaction that Verafin announced in 2019 was, at the time, the largest venture funding deal in Canadian history. A year later, in late 2020, Verafin struck a deal to be <a href=\"https:\/\/www.theglobeandmail.com\/business\/article-nasdaq-to-buy-canadas-verafin-for-us275-billion\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/article-nasdaq-to-buy-canadas-verafin-for-us275-billion\/\">acquired<\/a> by Nasdaq Inc. for US$2.75-billion. It was, and has remained, one of the largest exits by a Canadian tech company of the past 25 years. <\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/655DAH6VXFEPHGBZAYZFFCNRSU.JPG?auth=b90f37914665631d5c94969245d1de4d2b93f9225a3393f643a23974b441f1b0&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"3\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Stephanie Champion, executive vice-president and head of Nasdaq Verafin, says that since being acquired by Nasdaq in 2020, the company&#8217;s revenue has more than doubled.Greg Locke\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">The acquisition has helped the financial crime management company grow, benefiting from Nasdaq\u2019s trusted brand and its relationships with enterprise banks.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Today, Nasdaq Verafin employs more than 900 people in St. John\u2019s \u2013 it recently opened a second office in the city, a modern, airy space with cream-coloured wood finishings and red accents \u2013 has more than 2,800 financial institutions as clients and is expanding into Europe. Its revenue has more than doubled since the acquisition, and it\u2019s added 22 more enterprise banks as clients, Ms. Champion said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cWe continue to build, we continue to grow, we continue to hire Newfoundlanders and fit out new floors in our buildings, and I think that\u2019s a really incredible part of the story \u2013 that post-acquisition we continue to thrive here in Newfoundland,\u201d she said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Its success has trickled down to the rest of the province\u2019s tech sector, serving as both a proof of concept and a talent pipeline.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The technology sector contributed $1.8-billion to Newfoundland and Labrador\u2019s GDP in 2023, up from $1.55-billion in 2016, according to a <a href=\"https:\/\/technl.ca\/wp-content\/uploads\/2025\/08\/The-State-of-Tech-in-Newfoundland-and-Labrador-English.pdf\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/technl.ca\/wp-content\/uploads\/2025\/08\/The-State-of-Tech-in-Newfoundland-and-Labrador-English.pdf\">report<\/a> commissioned by industry association techNL and produced by The Dais, a public policy and leadership think tank at Toronto Metropolitan University. Nearly 10,000 people were employed by the tech sector as per the 2021 census, earning an average income of $85,030.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Florian Villaum\u00e9, who recently completed his term as techNL\u2019s CEO, said CoLab and Spellbook are on track to become unicorns. (A unicorn is a private technology company valued at US$1-billion or more.)<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/BH2QH2V7SJB2TBF6L62XGZNFDM.JPG?auth=b89ca5401a9ea9cc63d8765b56f57f42b8579306a8149c50f5c0086765dd28b9&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"4\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Mr. Keating&#8217;s company Colab is on track to top US$100-million in annual revenues within the next couple of years.Greg Locke\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">Both companies are growing rapidly. CoLab was valued at about US$500-million when it raised financing last year, and the company is on track to top US$100-million in annual revenues within the next couple of years. Spellbook is expected to seek fresh capital in the near term, and could top the US$100-million revenue mark as soon as this year. It was valued at about US$350-million during last year\u2019s Khosla-led US$50-million round.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cWe are on track to have three unicorns in a province of 550,000 people,\u201d Mr. Villaum\u00e9 said. That would put Newfoundland <a href=\"https:\/\/www.linkedin.com\/posts\/florianvillaume_technology-innovation-ambition-share-7419479342851821568-Q-C-\/\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/www.linkedin.com\/posts\/florianvillaume_technology-innovation-ambition-share-7419479342851821568-Q-C-\/\">behind only Estonia<\/a> on a per capita basis, he said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cWe are kind of the outliers. It shouldn\u2019t happen here, but we are killing it, on many dimensions.\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">There isn\u2019t one single ingredient that has made Newfoundland such fertile ground for entrepreneurship to flourish. Rather, the province\u2019s tech sector has benefited from a confluence of factors. <\/p>\n<p class=\"c-article-body__text text-pr-5\">One of them is a growing trend towards remote work, accelerated by the COVID-19 pandemic, which has normalized the concept of starting a business anywhere and made it easier for startups to hire outside their home markets.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Entrepreneurs in St. John\u2019s are also acutely aware of the fact that because Newfoundland and Labrador is such a small place, they\u2019ll have to sell to international markets in order to succeed \u2013 a dynamic that has similarly driven prosperous but small tech ecosystems in places such as Israel and Estonia. \u201cA lot of companies start globally from the get-go, and that helps them to scale quicker,\u201d Mr. Villaum\u00e9 said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">There has also been good homegrown capital support. Local investors have taken a key role in many of the early-stage financings that have launched Newfoundland\u2019s tech stars, with two firms standing out: Killick Capital and Pelorus Capital.<\/p>\n<p class=\"c-article-body__text text-pr-5\">They have very different origins. Killick Capital was founded by Mark Dobbin, son of the late legendary entrepreneur Craig Dobbin. Mark worked for his father\u2019s CHC Helicopter Corp., leaving to become CEO of Vector Aerospace from 1998 to 2003, and started Killick a year later.<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/4EU2F6AKORFDDAMEELHDTSC4KQ.JPG?auth=d4480af6e686a482aa7b38db92e1ae3daa9c67125ef56f8af113c02476b386a6&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"5\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">The late legendary entrepreneur Craig Dobbin, former CEO of Canadian Helicopters, in 1999. His son, Mark, went on to found one of Newfoundland\u2019s rising tech stars, Killick Capital.KEITH GOSSE\/SJS<\/p>\n<p class=\"c-article-body__text text-pr-5\">Mr. Dobbin is a leading establishment figure in Newfoundland and has invested in an array of ventures in the province through Killick, including aerospace businesses, a brewery, an outfitters lodge and a company that has developed an incendiary launching device designed to ignite controlled forest fires from a helicopter. But its most prolific portfolio is in technology. Killick was an early investor in Verafin and now lists stakes in 18 tech companies on its website, including CoLab, Spellbook, Avalon Holographics, Mysa and Sequence Bio.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Pelorus, meanwhile, was created at the behest of a provincial government bureaucrat who encouraged the principals of the labour-sponsored GrowthWorks Atlantic Venture Fund \u2013 including Mr. Moyer \u2013 to create a new fund, as their employer was beginning to liquidate its portfolio.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Expectations weren\u2019t high when the province committed $10-million in 2014 to a new venture capital fund managed by Pelorus to back homegrown tech startups. Business Development Bank of Canada and just nine other investors put up a further $4-million combined, despite the lure of a 30-per-cent investment tax credit. One of them, Shopify angel investor, philanthropist and part-time Newfoundland resident John Phillips, saw his $1-milion investment as more of a contribution to a social ecosystem to help \u201ca small out-of-the-way-place,\u201d he <a href=\"https:\/\/www.theglobeandmail.com\/business\/technology\/article-st-johns-venture-capital-firm-pelorus-doubles-down-on-homegrown-tech\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/technology\/article-st-johns-venture-capital-firm-pelorus-doubles-down-on-homegrown-tech\/\">told the Globe earlier this year<\/a>. He didn\u2019t expect to make any money.<\/p>\n<p class=\"c-article-body__text text-pr-5\">But that little, $14-million fund has already repaid investors $21-million, or $1.50 for every dollar they put in, and was sitting on a further $40-million-plus worth of unrealized investments as of January \u2013 an impressive performance for a Canadian VC fund. <\/p>\n<p class=\"c-article-body__text text-pr-5\">Pelorus\u2019s second $26-million fund, anchored with $13-million from the province, launched at the 2021 market peak and its performance is in the top quartile of peers. Pelorus is now looking to raise $50-million for its third fund, and has already secured $20-million of that, including $15-million from the province and $5-million from Mr. Phillips.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Early-stage financing is vital for startups. In order to attract venture capitalists, a company must have some demonstrated traction, said Spellbook\u2019s Mr. Gardner, such as prominent customers or a rapid rate of growth.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThere needs to be something world-class about what you\u2019re doing or building to attract that level of investment,\u201d he said. \u201cWithout Pelorus and Killick, you might not even get that opportunity, so they\u2019re a critical piece of the whole ecosystem here.\u201d<\/p>\n<p>      Newfoundland&#8217;s Memorial University has been fertile ground for tech companies looking to hire local talent. Verafin is an alumnus of Memorial\u2019s business incubator Genesis.<\/p>\n<p>        Adrian Wyld\/The Canadian Press<\/p>\n<p class=\"c-article-body__text text-pr-5\">Memorial University, a <a href=\"https:\/\/macleans.ca\/education\/university-rankings\/canadas-best-comprehensive-universities-for-2026\/\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/macleans.ca\/education\/university-rankings\/canadas-best-comprehensive-universities-for-2026\/\">highly ranked<\/a> school with a well-regarded engineering program, also plays an important role. Some years, Verafin has hired virtually the entire cohort of computer science graduates from Memorial, Ms. Champion said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Many of those who choose to stay in Newfoundland \u2013 or return after some time away \u2013 emphasize the appeal of the lifestyle: short commutes; fresh, salty air; easy access to world-class hiking trails; and the feeling of community that comes with living in a smaller place. On the other side of the country, Vancouver has similarly benefited from the draw of its natural beauty, which helped the city, for example, become a <a href=\"https:\/\/www.theglobeandmail.com\/business\/article-vancouver-biotech-startups-medicine-pharmaceuticals\/\" target=\"_self\" rel=\"nofollow noopener\" title=\"https:\/\/www.theglobeandmail.com\/business\/article-vancouver-biotech-startups-medicine-pharmaceuticals\/\">global hotspot<\/a> for the development of therapeutic antibodies.<\/p>\n<p class=\"c-article-body__text text-pr-5\">For a time, Mr. Keating lived in Torbay, a short drive from CoLab\u2019s office in St. John\u2019s, and could watch icebergs and whales float by from his backyard. \u201cIt\u2019s kind of hard to get that anywhere else,\u201d he said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">And house prices, while rising, are still relatively affordable compared to cities like Vancouver and Toronto. The average price of a home in St. John\u2019s was $423,600 in June, significantly below the national average of $696,078, according to the Canadian Real Estate Association.<\/p>\n<p class=\"c-article-body__text text-pr-5\">But there are still challenges for the industry to overcome if it is to achieve techNL\u2019s ambitious target of becoming the leading contributor to Newfoundland and Labrador\u2019s economy.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The lure of Silicon Valley can be hard to resist. <\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThe Teslas and the Amazons, they\u2019re recruiting right out of our university, which is awesome,\u201d said Ed Martin, president and CEO of Genesis, Memorial\u2019s business incubator. (Verafin is a Genesis alumnus.)<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cIt\u2019s hard to argue with moving to the Valley with a bunch of your friends from school, getting tremendous salaries, working in some of the biggest, most innovative companies in the world,\u201d he added.<\/p>\n<p class=\"c-article-body__text text-pr-5\">For homegrown companies, that can make hiring difficult. It\u2019s tough to compete on compensation, said Mr. Gardner, especially when factoring in the stronger U.S. dollar.<\/p>\n<p class=\"c-article-body__text text-pr-5\">The weather can also be a deterrent for some. Newfoundland is cold, windy and damp, and flying in and out of the island is tricky, on account of both the fog and the lack of direct flights to business hubs such as San Francisco, London and New York.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cPeople survived here on grit,\u201d Mr. Gardner said. \u201cPeople who want to be here, they really want to be here, because it\u2019s not easy to live on a rock in the middle of the ocean.\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">During the pandemic, a well-documented phenomenon saw some city dwellers cash out on the appreciation of their homes and move to smaller cities or rural areas. Some of those people came to Newfoundland; not all of them stayed.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cI could tell right away when I met people if they were going to like it here after a year,\u201d said Robert Decker, a St. John\u2019s-based realtor with the Moore Decker Dunn team at Remax.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Although homes are still relatively affordable, supply is limited, Mr. Decker said. There are few large developments, new construction on the island is extremely expensive and the province has experienced significant immigration in recent years. After hitting a low point in 2007, the population of Newfoundland and Labrador rose to nearly 550,000 in 2025, according to Statistics Canada.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Some people will always be lured away by the Valley, where some of the world\u2019s most innovative companies are based. \u201cIf you want to go work at SpaceX, we can\u2019t give you the equivalent,\u201d said Mr. Gardner. \u201cThere\u2019s probably nothing we can do that\u2019s going to prevent that type of brain drain.\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">One of the things Mr. Keating enjoyed during his stints in the Bay Area was interacting with people pursuing \u201cwildly ambitious\u201d projects. \u201cWhen you\u2019re around people like that all the time, it levels you up,\u201d he said. <\/p>\n<p class=\"c-article-body__text text-pr-5\">The hope is that some of those graduates will eventually return, as Mr. Keating did, bringing their newfound wisdom with them. Many of Mr. Martin\u2019s friends from engineering school secured jobs in oil and gas and left the province; almost all of them have returned to raise their families.<\/p>\n<p><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/IUM5HZ6Z4ZDX7MFF46T6JB7FCE.JPG?auth=2f0eca0077510bf0967d3f207648da5d76787bea468bc68a3bc7ddbed72817aa&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"6\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><a style=\"display:block\" href=\"https:\/\/www.theglobeandmail.com\/resizer\/v2\/WLWGC5FH4JFQJAIQB7KG2O3XEU.JPG?auth=225946ef465a43c0df4877c79c1b52b8fe89cc7f337c750bca6212b4496bd3e0&amp;width=600&amp;height=400&amp;quality=80&amp;smart=true\" aria-haspopup=\"true\" data-photo-viewer-index=\"7\" rel=\"nofollow noopener\" target=\"_blank\">Open this photo in gallery:<\/a><\/p>\n<p class=\"figcap-text\">Though the lure of Silicon Valley can be hard to resist, many who have chosen to stay in Newfoundland emphasize the appeal of a more laid-back lifestyle: short commutes, a lower cost of living, easy access to nature, and the feeling of community that comes with living in a small city.Greg Locke\/The Globe and Mail<\/p>\n<p class=\"c-article-body__text text-pr-5\">When Mr. Follett of Enaimco returned to Newfoundland after years working in offshore oil and gas in Australia and other places, he felt that something was missing from St. John\u2019s \u2013 a place for people to convene over the highest quality beer and coffee. He built Bannerman Brewery to fill that gap, and it became a hub. He\u2019s proud of that.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cThis is the type of place that I would go to when I lived in Australia,\u201d Mr. Follett said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Return migration might help address one of the sector\u2019s biggest challenges \u2013 a limited pool of more experienced talent. St. John\u2019s has ample entry-level tech talent, says Mr. Villaum\u00e9, but experienced talent is needed to drive the sector\u2019s growth, and to mentor newer staff. That could help with the brain drain, he said: \u201cIf there are more mentors, more people with experience, it\u2019s also how you attract people and retain people in companies.\u201d<\/p>\n<p class=\"c-article-body__text text-pr-5\">One of the things that makes Newfoundland and Labrador unique is the degree to which its successful founders give back to the community, Mr. Martin said. Earlier this year, he reached out to 10 founders to see if they would participate in a community event about building with AI that Genesis was hosting. All 10 said yes. <\/p>\n<p class=\"c-article-body__text text-pr-5\">Some successful founders are giving back financially, too. Mr. Keating made his first angel investments this year, and, despite a demanding work schedule, chairs the board of the Student Design Hub, a Memorial initiative for students competing in international competitions like the one that helped launch Mr. Keating\u2019s career. (In 2017, Mr. Keating was part of a team of Memorial engineering students that finished second in SpaceX\u2019s hyperloop competition, in which students designed and built sub-scale transport vehicles and raced them through a test track.)<\/p>\n<p class=\"c-article-body__text text-pr-5\">There\u2019s a culture of collaboration in the province that Mr. Martin attributes partly to the fact that Newfoundland is a remote island. \u201cI think there\u2019s this mentality of, we\u2019re in this together and we want to see Newfoundland really succeed on this bigger scale,\u201d he said.<\/p>\n<p class=\"c-article-body__text text-pr-5\">Mr. Martin doesn\u2019t believe that\u2019s replicable in larger cities, although they may do other things really well.<\/p>\n<p class=\"c-article-body__text text-pr-5\">\u201cWe\u2019ve got a thing that\u2019s really kind of our own here, I think, in the way everyone sort of supports each other and cheers each other on,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Some investors were skeptical that Adam Keating and Jeremy Andrews could build a successful tech company in St.&hellip;\n","protected":false},"author":2,"featured_media":838171,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1397,45,49,48,6347],"class_list":["post-838170","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-appwebview","tag-business","tag-ca","tag-canada","tag-ne-i"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/838170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=838170"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/838170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/838171"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=838170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=838170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=838170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}