The future of Canadian tech companies looks promising

14 June 2024 by La Presse National Bank
Portrait of Tuyen Vo, Daryl Johnston and Mathieu Apuzzo for an article about Canadian tech companies

Economic slowdown, high interest rates, tightening tax rules on capital gains: many challenges are affecting Canadian companies, including those in the technology sector. However, as Tuyen Vo, Head of the Technology and Innovation Group at National Bank, observes: "Canada stands out for its stability and solidity in every crisis." How do we explain this unique strength?

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Growing in the face of adversity

It's the nature of entrepreneurship to find solutions to problems, and the recent challenges facing Canada's technology sector are driving innovation forward. The current context is forcing SMEs to tighten their activities and review their business models to make them more resilient. Just think of the economic crisis of 2008; the Canadian banking system has emerged from this ordeal even stronger and become one of the most stable in the world.

"Companies that aim for sustainable growth rather than growth at all costs are the ones that will come out ahead."
- Tuyen Vo, Head of the Technology and Innovation Group, National Bank

Ultimately, a tech company that knows how to adapt is even more attractive as an investment target.

Pillars of resilience

After 165 years of supporting entrepreneurship, National Bank is pleased to see two fundamental pillars in Canada on which economic cycles have little influence:

Skilled workforce

Of all the resources in the territory, skilled labour may well prove to be the most valuable. In recent years, Canada has seen a formidable network of higher education institutions with a strong graduation rate in mathematics and computer science. The country attracts talent, partners and investments from around the world. 

Diverse ecosystem

The local tech ecosystem is enviable and includes successful SMEs in artificial intelligence, cybersecurity, supply chain management, finance and information technology – to name a few.

This optimism explains why the financial institution recently acquired the commercial loan portfolio of the Canadian arm of  Silicon Valley Bank (SVB) during the latter's difficulties. It consisted of approximately CAD 1 billion in loan commitments including roughly CAD 325 million in drawn loans. This has provided a unique opportunity to strengthen its position in the technology, life sciences and global fund banking sectors.

"The acquisition of the Canadian portfolio of Silicon Valley Bank (SVB) demonstrates our continued support for the Canadian technology ecosystem. We are doubling down on a sector in which we truly believe.
- Tuyen Vo, Head of the Technology and Innovation Group, National Bank

→ Read the full article on Canada's tech sector

The rise of clean technology

Some parts of the technology sector are particularly well positioned. For example, the fight against climate change mobilizes societal values, entrepreneurship and innovation – an ideal context to stimulate the development of clean technologies. The needs are glaring, government policies are favourable to adopt new solutions, and even the next generation within the industry seems assured. In Montreal alone, more than 70,000 students are enrolled in university programs related to clean technologies.

→ Learn more about clean technology in business

Supporting SMEs at every stage, from ideation to commercialization

It takes capital, expertise and knocking on the right doors for great ideas to come to fruition – and for society to benefit. This is where financial partners, such as National Bank's pan-Canadian Technology and Innovation group, come in. It offers specialized venture, M&A and growth financing, as well as specific treasury and foreign exchange expertise. In addition to financing, calling on such partners allows access to management services, banking services and personalized advice for a wide range of situations.

Through their advice and financial services, specialists in National Bank's Technology and Innovation Group support companies in the Canadian tech sector, particularly those that are innovative when it comes to environmental concerns. These companies include Mangrove Lithium and Oxygen8 located in British Columbia, as well as dcbel and FLO in Quebec.

"We put our values to work for our talent, and vice versa. The will is there: the challenge lies in access to capital to develop and commercialize ideas.
- Tuyen Vo, Head of the Technology and Innovation Group, National Bank

The financial institution regularly works on the development of strategic partnerships. For example, it facilitated a unique collaboration to install FLO electric vehicle charging stations at Imperial-owned gas stations, contributing to Canada's net-zero goals.

Despite the challenges, it is still possible to double or triple in size in one year when you benefit from the personalized and agile approach of our financial partners.

"The past few months have not been easy, but all of these changes will put technology leaders in a better position to take advantage of what's to come. And they will be able to count on the support of an entire ecosystem.
- Tuyen Vo, Head of the Technology and Innovation Group, National Bank

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