Village Gamer

The winners of the Deloitte Canadian Technology Fast 50™ set a record pace in 2010, with an average five-year revenue growth rate of 5,638% – an all time high. Some of this was due to the economic rebound and exciting new technology niches, but some was also due to the small size of these companies five years ago. In addition, this year’s survey of Canada’s fastest growing technology companies reveals a domestic tech sector that’s been resourceful in bootstrapping its growth, but sees the country’s domestic venture capital industry as in crisis and potentially unable to help sustain future expansion.

“Canada’s tech companies set records for growth in 2010: Both the top five companies and the entire Fast 50 roster were at all time highs for five-year growth at almost 43,000% and 5,600% respectively,” said John Ruffolo, National Leader, Technology, Media & Telecommunications Industry Group, Deloitte.

“While we take time to celebrate the winning companies’ achievement, we also need to keep in mind that this year’s winners have grown off very small bases and tend to be successful in what are relatively smaller technology niches.”

“Over the last twelve years, there have been some interesting trends (and non-trends) within the Fast 50 list,” said Duncan Stewart, Director of Research for Technology, Media & Telecommunications for Deloitte. “Although the growth rate and the winners change over time, the split between hardware, software, telecom and other technology areas has been fairly consistent. Equally, the regional split of winners hasn’t varied: Ten years ago, 26 of our winners were from Ontario, and in 2010, we have 27 Ontario winners. On the other hand, reflecting a difficult time for initial public offerings (IPOs) and the ongoing venture capital crisis, the number of winners who are public companies has fallen from 54% a decade ago to 30% today. Turnover is up too – the five fastest growing companies on this year’s list weren’t even on the 2009 list.”

Richmond Hill-based Clickfree (Storage Appliance Corp), a hardware company specializing in automatic computer backup, has emerged as a strong winner: Sitting atop the ranking of this year’s Fast 50 list with a 64,240% five-year revenue growth.

Second and third spots go to Real Matters (40,532%, a Markham-based software company operating in property information solutions, and Varicent Software Incorporated (40,269%), a Toronto-based sales performance management software firm. Rounding out the top five are Toronto-based NexJ Systems (36,128%), an Enterprise CRM Software company, and Avigilon (33,664%), a Vancouver-based high-definition surveillance company.

As happened in 2009, a Quebec GreenTech company is a winner in multiple categories: Montreal-based 5N Plus Inc. appears on the Fast 50 list and it is present on both the Green technology and the Leadership rankings as well.

Deloitte’s annual survey of Fast 50 Tech CEOs, also released today, provides further causes for concern and some glimmers of hope. Almost 80% of respondents to Deloitte’s survey of tech CEOs say Canadian-based venture capital firms are in danger of becoming an irrelevant source of financing for the country’s companies, and 83% see this development as jeopardising future generations of technology companies in Canada.

This year’s Tech CEO survey showed that the main source of financing was cash flow from operations for 76% of companies, higher than in past years, while angel and VC funding was ranked as less than half as important. “Although this year’s winning companies are doing incredibly well,” added Ruffolo, “who knows how much bigger they would be today if they had had access to more growth capital in their formative years?”

“This persistent weakness in the country’s venture capital ecosystem began around 2004, it has now reached crisis levels and it has serious implications for the future of our technology sector and the future of Canada,” said Ruffolo. The ongoing Canadian funding crisis in venture capital continues to have a negative effect on our tech sector, and as a nation we need to rapidly adopt key policy responses that will help build our Innovation Economy, create jobs, and make future Technology Fast 50 lists even better.”

According to survey results, 73% of Tech CEOs said their company’s performance was negatively affected to some extent by the recent recession. At the same time, 68% predict either weak or negative growth over the next 12 months.

On the job front, more than 53% of CEOs indicate their firms have benefited from current conditions thanks to the greater availability of skilled labour at a reasonable cost.

Carbon credits are a hot topic for many tech companies: Of survey respondents who saw credits as relevant to their businesses, a surprising 40% said that future carbon credits were a major part of their strategic thinking.

“Cloud computing is often seen as a beneficial technology for early stage tech companies,” said Stewart. “But there has been a debate if it helps more because it is cheaper than traditional infrastructure-based computing, or if it was the time-to-market factor. The results, at least for Canada, are in: More than twice as many CEOs said that cloud helped them grow/scale more quickly than those who cited the cost benefit.”

Canadian Technology Fast 50 2010:

1 Clickfree – Richmond Hill
2 Real Matters – Markham
3 Varicent Software Incorporated – Toronto
4 NexJ Systems – Toronto
5 Avigilon – Vancouver
6 Vital Insight Group Inc. – Mississauga
7 ProSep – Montreal
8 OmniGlobe Networks, Inc. – Pointe-Claire
9 GuestLogix Inc – Toronto
10 In Motion Technology Inc. – New Westminster
11 ARISE Technologies Corporation – Waterloo
12 Vision Critical – Vancouver
13 CarProof – London
14 Solace Systems – Kanata
15 Strategic Connections, Inc. – Markham
16 Impact Mobile – Toronto
17 ParetoLogic Inc. – Victoria
18 QuickPlay Media – Toronto
19 KineticD – Toronto
20 PNI Digital Media – Vancouver
21 ViXS Systems Inc. – Toronto
22 Allegro Mobile Solutions – Mississauga
23 H2O Innovation – Quebec City
24 Opale Net Inc. – Montreal
25 RuggedCom Inc. – Concord
26 SherWeb inc. – Sherbrooke
27 Dominion Voting Systems Corporation – Toronto
28 Nightingale Informatix Corporation – Markham
29 DragonWave Inc. – Kanata
30 Research In Motion – Waterloo
31 Tantalus Systems Corp. – Burnaby
32 Averna – Montreal
33 Diversinet Corp. – Toronto
34 Coveo – Quebec City
34 Corinex Communications – Vancouver
35 Vantrix – Montreal
36 5N Plus Inc. – St. Laurent
37 iBwave Solutions Inc. – St. Laurent
38 Absolute Software – Vancouver
39 Nexterra Systems Corp – Vancouver
40 uptime software – Toronto
41 GEOTAB, Inc. – Oakville
42 WellPoint Systems Inc. – Calgary
43 In-Touch Survey Systems Inc. – Ottawa
44 MAKE Technologies Inc. – Vancouver
45 Adenyo – Toronto
46 EION Wireless – Ottawa
47 Haivision Network Video – Montreal
48 Level Platforms – Ottawa
49 Sandvine Incorporated – Waterloo
50 Payworks – Winnipeg

Leadership Awards single out companies that are the elite members of the Canadian technology industry, whose ability to create a distinct competitive advantage in a high-growth market allows them to dominate their sector and quickly join the ranks of other Canadian global leaders. This year’s four Leadership Awards recipients are:

5N Plus Inc. – Montreal
Evertz Technologies Limited – Burlington
Open Text Corporation – Waterloo
Research In Motion – Waterloo

The Deloitte Technology Fast 50™, the Companies-to-Watch (CTW) Awards honour early-stage Canadian technology companies who have been in business less than five years, and have the potential to be future Deloitte Technology Fast 50™ winners. The ten companies recognized as CTW this year are:

Awasi Incorporated – Waterloo
Dayforce – Toronto
Morega Systems Inc. – Mississauga
N4 Systems – Toronto
Neuralitic – Montreal
Polar Mobile – Toronto
Syncapse – Toronto
Telepin software – Ottawa
Tynt Multimedia Inc. – Calgary
X20 Media – Montreal

The Deloitte Technology Green 15™ Awards recognize Canada’s leading GreenTech companies who promote a more efficient use and re-use of the earth’s resources in industrial production and consumption. In doing so, they use new, innovative technologies to create products and services that compete with existing products and services on price and performance while reducing our impact on the environment. The 15 winners are:

5N Plus Inc. – Montreal
Bionest Technologies Inc. – Grand-Mère
Cavet Technologies – Toronto
ecobee – Toronto
Energate – Ottawa
Fielding Chemical technologies Inc. – Mississauga
GEEP – Barrie
Global Emissions Systems Inc. – Whitby
H2O Innovation – Quebec City
McMillan-McGee Corp – Calgary
Nexterra Systems Corp. – Vancouver
Odotech – Montreal
ProSep – Montreal
Real Tech Inc. – Whitby
RTI Cryogenics – Cambridge

The Deloitte Technology Fast 50™ ranks companies based on their past five-year revenue growth rates. Celebrating business growth, innovation and entrepreneurship, the program features four distinct categories including the Deloitte Technology Fast 50™ Ranking, Companies-to-Watch Awards (early-stage Canadian tech companies in business less than five years, with the potential to be a future Deloitte Technology Fast 50™ candidate,) Leadership Awards (companies that demonstrate technological leadership in four industry subcategories: Hardware/semiconductor, software, telecommunications and emerging technologies) and the Deloitte Technology Green 15™ Awards (Canada’s leading GreenTech companies that promote a more efficient use and reuse of the earth’s resources in industrial production and consumption). Program sponsors include Deloitte, Gowlings, GrowthWorks, Wellington Financial, TMX, HKMB Hub, CVCA, NACO, IGLOO Software, MaRS. Media partners include Canadian Business magazine and La Presse.