January 25, 2017 / 8:44 PM / 8 months ago

New startup investments aim to stem Canadian tech brain drain

TORONTO (Reuters) - Some of Canada’s largest corporations and top executives launched two separate initiatives this week, investing millions of dollars into startup programs they hope will help stem a brain drain in fields like artificial intelligence and financial technology.

NextAI, which was unveiled on Wednesday, and Diagram, announced on Tuesday, both aim to halt the loss of the country’s best technology talent by helping to launch new Canadian-based companies through seed funding and mentorship.

Industry leaders are concerned that without capital, private and public sector support, Canada will be unable to attract skilled tech entrepreneurs, while existing workers and students will be pulled away by global tech giants. More than 300,000 Canadians already work in Silicon Valley.

“A lot of people are looking to come back, but it’s hard to find the right backing and opportunity in Canada,” said Diagram Chief Executive and Founder, Francois Lafortune. “Canada must get this right. There’s are too many jobs at stake.”

Diagram’s goal is to foster tech startups in insurance, financial services and healthcare, providing as much as C$5 million ($3.8 million) in seed financing for a venture.

It is backed by fintech venture fund Portag3, as well as dozens of angel investors, including top Canadian executives from major banks, large companies and entrepreneurs.

“The next generation of students coming out of school and coming out of graduate school around the world - we want them to lock on to an ecosystem here,” Royal Bank of Canada Chief Executive Dave McKay told reporters at the NextAI launch. “I think Silicon Valley does a better job of providing that (ecosystem) right now.”

RBC, Magna International Inc, Bank of Nova Scotia and BDC Capital are the founding corporate partners investing in NextAI, which will provide up to C$200,000 to as many as 20 teams from Canada and abroad.

The teams will work on commercializing their artificial intelligence (AI) research in Toronto, with access to experts and training from schools and tech firms including the University of Toronto, the Massachusetts Institute of Technology, Harvard University, Alphabet Inc’s Google, IBM and NVIDIA Corp.

“We are an export economy. Today we’re exporting oil and gas, predominantly. We need to evolve to export AI technologies that we develop here in Canada,” said Anthony Lacavera, the co-chair of NEXT Canada, the organization behind NextAI. Lacavera is also a Diagram investor.

Reporting by Solarina Ho and Matt Scuffham; editing by Bill Rigby

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