Sidewalk dangles a startup fund if Quayside a go
Proposed venture fund called ‘ploy to gain support’ from Toronto’s tech community
Google sister company Sidewalk Labs is partnering with Plaza Ventures to create a venture capital fund focused on early stage smart city technology companies — but the fund is contingent on Sidewalk’s Quayside project getting approved.
The fund, to be called Quayside Venture Partners, will include $10 million that Sidewalk and its parent Alphabet (the owner of Google) committed to in its master plan for Quayside, a techdriven residential and commercial district Sidewalk wants to build on a12-acre plot on Toronto’s waterfront.
The fund would supply capital to Canadian smart city technology companies focused on addressing challenges such as traffic congestion, housing affordability and sustainability, Sidewalk said in a statement Tuesday. Canadian investors are slated to provide 50 per cent of the money beyond Sidewalk’s $10-million contribution.
The fund would launch and make investments next year if the Quayside project is approved by Waterfront Toronto and governments, Sidewalk said.
Erin Bury, a technology expert and entrepreneur who is CEO of an online estate planning startup, called the conditional nature of the fund and Sidewalk’s $10-million contribution a move to foster innovation in urban technology, but she said, “Let’s be honest: this is clearly also a ploy to gain support” from the tech community in Toronto and the GTA.
“There’s no secret the (Quayside) project has been heavily criticized, especially from some local (experts) in the tech space. So I think having folks who are well-respected in the community (involved) ... is obviously an attempt at galvanizing some support,” Bury said.
She was referring to names such as Michele Romanow, president of venture capital firm Clearbanc; Tony Lacavera, chair of communications and
investment firm Globalive; and Ben Zifkin, CEO of computer software company Hubba — some of the industry experts who will form an advisory committee to support the companies backed by the fund.
Commenting on the conditional nature of the fund, Sidewalk spokesperson Keerthana Rangsaid the firm is committed to ensuring that both the Quayside project and fund go forward.
“Urban tech is a new, emerging stream in the tech ecosystem in Toronto ... it’s really hard for them to get off the ground because they have to work with cities. There are long procurement periods, sometimes you’re working with city infrastructure. So there are different barriers to urban tech companies,” Rang said, adding that Sidewalk’s Quayside project will have an advantage if the urban tech ecosystem here in Toronto is “robust.”
But everything is subject to approval from governments and that’s the reality, she said.
“This fund is meant to empower Canada’s growing urban tech ecosystem to take advantage of our Toronto project and to scale up as the Quayside neighbourhood Toronto project is built,” Nicole LeBlanc, Sidewalk Labs’ Director of Investments, said in a statement.
LeBlanc went on to say the fund will help urban tech companies with hardware costs and procurement processes that need more capital.
Matthew Leibowitz, general partner at Plaza Ventures, says the urban tech space is just starting to emerge and is still fairly untapped from an investment standpoint.
“Urban tech now is really just starting to evolve and emerge as an investable ecosystem.”