Building with Optimism
While 2021 was a year of extreme growth, 2022 was a year of ups and downs for many in the tech and innovation ecosystems. Despite the uncertainty, we have reasons to be optimistic about the future.
With Velocity support, our companies grew at a rapid pace. We witnessed strong interest in entrepreneurship from the next generation of Canadian founders with over 300 applications to Velocity. Of these, we welcomed just over 30 pre-seed and seed companies to the Velocity ecosystem in 2022. In total, Velocity companies (current and alumni) raised $700M USD over the past year; this brings us to a total of $4.3B USD raised over the past 15 years, which is a 20% increase from our 2021 total of $3.6B USD. Velocity companies now have a total enterprise value of just over $26B USD. To build the pipeline, Velocity also worked with more than 2,600 University of Waterloo students curious about entrepreneurship or embarking on creating a startup.
Just like its companies, Velocity also grew. Over the course of the year, Velocity adapted itself to better serve founders and the start-up community in the years ahead. Velocity’s updates make way for a future of remarkable advancements.
A strong pipeline of future founders for Canada
Velocity started as a dorm residence on the University of Waterloo campus in 2008. In just 15 years, Velocity has supported over 400 new ventures and created over 5,000 start-up jobs. Given the supportive community and huge volume of talent, it is not surprising that 85% of Velocity’s startups and scaleups are headquartered in the Waterloo Region or Ontario. Every year, Velocity continues to accelerate hundreds of founders on-campus, at Velocity Downtown Kitchener, and in the community from idea to Series A.
Velocity and the University of Waterloo’s relentless efforts to inspire and support individuals to become entrepreneurs has played a critical role in establishing the current Canadian start-up ecosystem. According to Pitchbook, Waterloo is the #1 Canadian university for entrepreneurs and #21 in the world overall.
To support the essential work of building a pipeline for entrepreneurs before they can become full-time founders, Velocity doubled its efforts on the University of Waterloo campus in 2022. Velocity concentrated campus efforts on four key needs: (1) flexible, founder-specific advisory, (2) space to build a product, service, and/or company, (3) funding, and (4) networking opportunities supporting those with entrepreneurial interests.
1. Founder-specific advisory, for all stages
In 2022, Velocity provided over 400 hours of 1:1 support on campus from our network of coaches and continued its successful Velocity Launch Sessions featuring both new and long-standing favourites like What’s Your Problem with Larry Smith.
We added three programs designed to guide students as they become full-time founders:
- Cornerstone supports students in all years to learn the fundamental principles of validating unmet customer needs and building a company.
- Up Start, was created for student researchers, founders and recent alumni to access funding and work closely with advisers to conduct market research, develop a business plan and have access to resources from Velocity and the Waterloo Commercialization Office. Up Start held its first ever event, Demystifying Commercialization: A provocative micro symposium on what it takes to effectively commercialize research, presented in collaboration with BDC. The event was well attended by the UWaterloo community and welcomed the inaugural cohort to the program.
- Venture Ready bridges the gap between student founder and venture-fundable company. It accepts up to 15 teams each term and operates as a milestone-based program of up to 12 months in duration to accelerate start-up progress and increase the likelihood of continuing with Velocity post-graduation.
2. New student creator spaces
Beyond our renowned founder space in Kitchener’s Innovation District that provides resources for over 70 pre-seed and seed companies, Velocity also opened three student creator spaces at the University of Waterloo: Velocity Digital, Velocity Science and The Problem Lab. These spaces welcome individuals who are looking to explore entrepreneurship and innovation or are searching for a place to realize their ambitions and receive feedback, whether they are at an idea, project, or company stage.
3. Risk-tolerant capital
Velocity distributed more than $250,000 in non-dilutive funding to teams in the form of awards and grants. Funding is provided through the Problem Pitch, Co-op Problem Award, Hackathons, Up Start, We Accelerate and the ever-popular Velocity $5K Pitch Competition.
4. An expansive founder community
Through our programs and events, Velocity fostered networks of entrepreneurs and entrepreneurially-minded people that will live on beyond Velocity. We saw first-hand our incubator residents and alumni offer time and support to the next generation of founders, whether online through our digital founder community or in-person at Velocity campus events and through 1:1 mentorship.
We are incredibly proud of the supportive and diverse community of founders that Velocity has built and sustained over a tumultuous year.
Expansion of startup programming: three new streams
As we continue to provide high-potential pre-seed and seed founders with access to capital through the Velocity Fund as well as unmatched access to the resources and advisory networks that they need for rapid product and business development.
Navigating the product-market fit looks radically different for companies based on industry vertical, type of technology, and business strategy. The regulatory and compliance requirements for a company in our software stream are very different from what is usually required for a medical device company in our health stream. Companies in our deep tech stream are able to compress their product development time with the help of Velocity. Elsewhere it may take two to three times that of companies in the software stream, to build scalable, functional, and market-ready products using new technologies and capital-intensive R&D processes.
To support the three types of companies that Velocity works with most frequently, we have three dedicated streams that companies are distributed amongst: Velocity Software, Velocity Deep Tech and Velocity Health.
This structure will allow us to efficiently support a greater number of companies while continuing to provide flexible advice and resources based on the specific needs of individual founders and companies.
An optimistic outlook
The one constant in Velocity’s history has been our ability to transform and evolve to meet the needs of our founders and our community. Looking to the future, we want to build on our past work and successes to better serve Canadian entrepreneurs.
In 2023, we will focus on operational excellence and scaling the impact that Velocity has on Canada’s start-up community. Leaning on Velocity’s strong culture of collaboration, we will be developing new partnerships to better support our founders as they grow from idea to Series A. Velocity’s expansion to the Innovation Arena (expected Fall 2023) will allow us to significantly increase the number of startups we can actively support.
“Velocity is the place for persistently enterprising people who have the ambition, insights, and drive to create impactful ventures,” says Sarrah Lal, Director of the Velocity Incubator. “We are coming into 2023 ready to combine Velocity’s operational excellence, world-class resources, and an incredible community of founders, Alum, and supporters of Canadian entrepreneurship to continue building companies with huge social and economic impact. What is there to not be excited about?”
