Local startups cash in on little-known tech program

Rapid growth attributed to CTA, which provides free office space in expensive U.S. cities

6S Marketing president Chris Breikss (centre) used the Canadian Technology Accelerators program to spin off a subsidiary company and launch an office in New York City

Stephen Ufford was seeking financing for his fourth startup in 2010 when he packed his bags, left Vancouver and made his way down to the Silicon Valley to find investors.

He didn't know anyone down there.

In the midst of wandering around the Plug and Play tech centre – a business accelerator that helps startups with rapid growth – he stumbled upon a Canadian flag hanging above some cubicles and began chatting with a trade commissioner.

The commissioner eventually convinced Ufford to sign up for the Canadian Technology Accelerators (CTA) program. Instead of paying for his office space at Plug and Play, Ottawa would foot the bill and help make introductions with potential investors.

“No one knows about this stuff,” Ufford said.

“I stumbled across it merely by being in close proximity to the booth.”

He walked away with $2 million in seed funding and went on to found Trulioo, an online identity verification service based in Vancouver.

“Simply by being in the building, you get access to the accelerator's resources, and I was very quickly put on the pitch circuit,” he recalled.

“A Canadian guy, never having been to Silicon Valley before, I have to this day never sent one cold email yet, and that's been a result of starting off at the CTA.”

The CTA launched as a pilot program at the San Francisco consulate in 2009 and has since spread to New York, Boston, Denver and Philadelphia.

The federal Trade Commissioner Service evaluates applicants based on consultations with stakeholders, market accelerators, venture capital firms and industry associations.

In addition to offering free office space in some of the most expensive cities in the U.S., the program helps Canadian entrepreneurs pursue clients, refine their business model and secure financing.

Out of the 129 companies accepted into the program last year, 27 – or 21% – were from B.C., which accounts for 12.5% of Canada's population.

“B.C. is one of our top three provinces for applicants, and they are consistently more prominent in California CTA programming,” Department of Foreign Affairs, Trade and Development spokeswoman Caitlin Workman said in an email.

But young entrepreneurs aren't the only ones using the CTA program.

Vancouver-based 6S Marketing set up a subsidiary in New York City earlier this month after becoming the first marketing company accepted into the CTA program.

Chris Breikss, founder of 6S, told Business in Vancouver in May the plan to create a spinoff has been in the budget for more than a year. But it wasn't until the company was accepted into the CTA that 6S committed to launching in the Big Apple.

The subsidiary, Sheng Li Digital, is targeting affluent Chinese clients who need help with media buying and social media management.

6S Marketing had been offering those services in Vancouver for five years when it decided to create the spinoff company in New York, where the Chinese population is larger in terms of sheer numbers.

Breikss said Sheng Li's development of advertising technology clinched its approval into the CTA program.

More than a decade after founding 6S, Breikss said moving to New York to run Sheng Li will be somewhat nostalgia-inducing as he works with a smaller team in a tighter space provided by Ottawa.

“We're going back into startup mode.”