The Business Development Bank of Canada (BDC) has invested $150,000 convertible notes into three startups that graduated from Moncton-based tech accelerator, Launch36. The story was first reported by Entrevestor.
Eigen Innovations, FoodTender Solutions and TopLog all scored the startup capital, with the latter startup TopLog attracting another $250,000 from Halifax-based venture capital firm Innovacorp. Halifax-based TopLog is seeking out a $500,000 seed round.
Eigan Innovations is a Fredricton-based company that provides software solutions for the Industrial Internet. Eigan built a patented multi-dimensional non-linear software algorithm that leverages ‛‛big data’’ information from industrial equipment and, based on the algorithm’s optimization capability, provides control input into the key devices that operate the manufacturing process. “The end result is a more efficient manufacturing operation, with improved productivity, increased quality, and lower costs.” The company leverages talent and resources from the University of New Brunswick’s faculty of engineering.
“Most of these things take place in the backroom,” CEO Richard Jones told Entrevestor. “The good thing about this BDC note is it’s very public. … It allows us a lot of help in our search for new investors. It’s an important validation.”
Meanwhile FoodTender Solutions acts as an online marketplace between restaurants and suppliers, ensuring the restaurateur gets the best price and the supplier gains exposure to new customers. It currently has 75 clients.
TopLog, meanwhile, formerly worked out of the Volta accelerator in Halifax. The startup turns log data into visual intelligence, reducing costly network downtime. It plans to launch in 2014. According to Entrevestor, the company makes life easier for network system administrators by analyzing the events that take place over the network and identifying things that departed from the norm. This knowledge can prevent problems and alert administrators when anything wrong happens.
BDC often awards the convertible notes to startups at notable Canadian accelerator programs. If startups eventually earn the money back through customer revenue, the note acts as a loan. As with any other VC financing, companies aren’t personally liable, but the BDC “would go after anything in the company to recover our investment”. It’s a great initiative aimed at giving seed-stage startups a small push they need.