Creative Destruction Lab’s alumni raise Series A and B capital

Creative Destruction Lab (CDL)-Vancouver has hosted its alumni showcase, bringing together 30 companies across the climate, computational, and healthtech sectors. The mentorship program for early-stage science and technology ventures has supported over 350 startups over its lifetime, which have generated more than $4.7 billion in company value, said Bree Stanlake, director of CDL-Vancouver. The alumni showcase featured its startups raising Series A and B capital.

The need for mentorship

It’s a tough time for any tech company to raise capital. While capital market activity has dramatically decreased, interest rates have gone up, making it difficult for early-stage startups to grow. But it’s not just challenging for companies: it’s challenging for investors too, said Thomas Park, co-founder and lead partner of BDC’s Deep Tech fund.

• Go deeper: BDC launches new $150-million Sustainability Venture Fund

“Pension funds, foundations, and family offices — which a lot of GPs or venture funds try to raise from — they, as a result of the lower valuations in the public market, over-index in their own portfolio in venture capital,” said Park. “You can see a market pullback from the LPs in this market.”

Despite the conditions, Park emphasized not to panic. Investors are actively investing, but the bar is much higher. And this isn’t the first cycle of economic headwinds. Mentors have gone through multiple downturns before, and have still built great businesses and teams, he added.

“Airbnb, Uber — a lot of these startups were built during the 2008-2009 financial crisis,” Park said. “Granted, capital was at zero percent interest rates at the time. It’s different now, but it doesn't mean that we can't [build].”

How to set up for success

A panel of investors, including Brenda Irwin, managing partner of Relentless Venture Fund; Angie Lamarsh, head of sustainable finance, commercial banking at HSBC; and Boris Wertz, founding partner at Version One Ventures, explored what they are looking for in the current environment as investors.

“I always think about fundraising as striking the right balance between the narrative, the vision, the long-term opportunity of a startup, and the proof-points of what it has achieved and that the team can execute,” said Wertz. “I think that the narrative took over, over the last few years. And now it's much more about proof-points. [For] any startup that is raising today, the more you can really understand how to de-risk the venture, how you can prove that you can execute, how you can prove to monetize customers, et cetera — that will really help you put a much better foot forward.”

Irwin, who is a healthtech investor, sees opportunity supporting innovation for an aging population. “We will always need solutions for the issues that continue to exist in health,” she said. “Our fund invests in some of the most common conditions associated with aging, and that is only going to get worse with the aging demographic.”

Meanwhile, Lamarsh, who supports clients to thrive in a low-carbon economy, has seen increased adoption of sustainability goals from buyers. “I had clients who would politely entertain me because we had a good relationship — but it was a bit of an eye roll,” she said. “And those same customers are [now] talking about sustainable finance; how they're going to decarbonize their business models and achieve net zero by 2050.”

The panel also commented on the role of AI as a bright spot amidst the economic turbulence. The mass adoption of the tech has allowed startup prototypes to go to market much faster, said Wertz. “If we think today it's noisy in all these markets, AI will make it 1000 times noisier, because everybody can work off the same model,” he suggested. “[The access to a large language model] really got commoditized.”

Meet the Vancouver-based CDL ventures

Lucent Biosciences accelerates sustainable agriculture by delivering crop nutrition that improves yield and soil health, while sequestering carbon.

Mangrove Lithium is a modular, scalable refining platform that converts Lithium Chloride and Lithium Sulfate from a wide variety of feedstocks directly into battery-grade Lithium Hydroxide.

Miru Smart Technologies creates smart windows that dynamically change the tint of glass at the push of a button, customizing the environment for comfort while reducing a building’s carbon footprint.

ph7 Technologies has developed an economical and sustainable process to extract platinum-group metals from primary and secondary resources and waste materials.

• Go deeper: pH7 Technologies raises $16M USD Series A co-led by Pangaea Ventures

Human in Motion Robotics is a start-up company that has designed an advanced wearable lower-limb exoskeleton system.

Craver Solutions’ intelligent engagement platform helps restaurants increase the lifetime value of their customers. Its software enables connection through mobile apps and online ordering

• Go deeper: Craver offers small businesses a solution to survive the pandemic

Elevated Signals specializes in streamlining high-value agrifood production to improve supply-chain visibility.

LifeBooster brings telemetric methodologies to safety, ensuring that every worker gets home safe.

Switchboard helps companies’ safety compliance with electronic logging device mandates, and streamlines operations including asset tracking, international fuel tax automation, dashcams, and more.