Waterloo startups putting AI to work in real world
Not every artificial intelligence venture is a startup. There are sizable communities of established entrepreneurs well ahead of the AI game.
Waterloo, Ont. is one of those. It’s home to a burgeoning population of robotics/AI companies, many of which have landed substantial venture capital financing deals over the years.
Aeryon Labs, a developer of unmanned aerial systems ( drones), raised $ 60 million of growth equity from Summit Partners in October 2015. Clearpath Robotics, makers of autonomous mobile robots, raised $ 30 million in October 2016 from backers that include the venture arms of Caterpillar and General Electric Co.
Thalmic Labs, creators of interactive wearable technologies ( the Myo gesture control armband), received close to US$120 million, led by Intel Capital, the Amazon Alexa Fund and Fidelity Investments Canada in September 2016. It’s one of the biggest Canadian VC deals in history. The list goes on. David Proulx, vice- president of product and marketing for Aeryon, says Waterloo has created a healthy ecosystem. As with a number of companies in the area, the business was founded by graduates from the University of Waterloo who specialized in mechatronic engineering and control systems, he says.
Unlike the more typical software startups, many of the region’s success stories have roots in hardware, which can be a tougher sell.
“We built the business the hard way: designing a product, showing it to customers for feedback, refining, selling and reinvesting in the process,” Proulx says. “That was a different road compared to seeking early state seed or VC funding.”
Hardware is a much more capital-intensive business.
“Yet, ultimately, the hardware is the vehicle that has enabled us to deliver software solutions.”
AI came into the picture further down the development road for Aeryon, as it shifted from handheld controllers to a machine interface for drones. Proulx places the intelligence they use in the middle of the autonomous operation spectrum.
“At the far left you are completely reliant on operator direction; the ultimate evolution is fully autonomous. Humans are still in the loop to provide a degree of oversight necessary in flight operations.”
Clearpath Robotics also started with a hardware solution ready and waiting for AI when it came to fruition, says Ryan Gariepy, cofounder and CTO of Clearpath Robotics.
“When we started, what we did wasn’t really AI related. We hadn’t proceeded to the point where we could make the breadth of robotics products we have now. As AI has evolved, we have reinvented ourselves as a software AI company.”
Clearpath was one of the first grads of the Communitech Accelerator Centre, Gariepy says.
“At the time, Waterloo hadn’t made its mark as a region with a lot of hardware startups. Folks like Thalmic Labs and Pebble were going through the same stages we were. Now Waterloo is very strong, not only as good for startups in general, but specifically hardware or sciencebased startups. Over the last few years, there has been tremendous recognition and a support structure including the university, Communitech and private companies.”
While a lot of companies have established themselves as AI businesses in Toronto, Gariepy says many companies in Waterloo are solving existing problems and applying AI to them.
“We all rely on various aspects of AI, machine learning and the field in general. It isn’t so much a cluster of AIfirst startups. We are a cluster of many practical startups solving real problems that are looking to AI to solve them faster, better and cheaper.”
There is plenty of R& D support in the region. For example, University of Waterloo is home to ODX (Open Data Exchange), a federal initiative in which data scientists, analysts and companies can access big data. Another entity of note is the university’s Institute for Quantum Computing scientific research facility. Soon to come is a dedicated Robohub advanced robotics testing facility.
Steve McCartney, vicepresident, strategic growth team for Communitech, says Waterloo now has a growing number of entrepreneurs and startups that range between pure AI solutions to applying some version of AI to solve a problem.
“Some of these are very nascent c ompanies but showing promise. Others, like Thalmic, MyoVision, Vidyard, IMS, Clearpath and Aeryon, are very sophisticated.”
What Waterloo has in spades, however, is the commercialization trump card, McCartney claims.
“Montreal and Toronto and Edmonton are super strong on theory. If you ask Waterloo what its strength is, we say let others do the theoretical and keep the talent in Canada. Let us stick to our strengths: doing the applied research and commercialization.”