Pandemic levels capital playing field: Skip founder

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This article was published 01/04/2021 (1619 days ago), so information in it may no longer be current.

There were some mixed messages about advantages and disadvantages of starting tech companies in Western Canada at the National Angel Capital Organization’s West Summit, held virtually this week.

According to some of the speakers on Wednesday, the age-old concern about accessing capital — whether it is from angel investors or venture capital — is still clearly a hot-button issue.

But some said that since face-to-face investment pitches are not even a thing these days because of travel restrictions caused by the pandemic, maybe it means being in Winnipeg or Saskatoon rather than Toronto or New York is not as much of an obstacle to landing capital to grow businesses on the Prairies.

Chris Simair, one of the founders of SkipTheDishes, spoke about that company’s early days as a startup, recalling the grinding, long hours and incessant capital raising, first from friends and family and then flying regularly to Toronto and New York and elsewhere pitching to investors.

He said, “One of the fallacies about being an entrepreneur is that it is sexy.”

Simair, who now runs Harvest Builders, a Calgary-based incubator focused on helping startups across the Prairies, is a poster child for the Prairie success story.

He said compared to the tough realities they faced launching SkipTheDishes in 2013, maybe the pandemic “does allow us (on the Prairies) to have a little more of an equal playing field.”

He remembered how the company founders sometimes had to be responsible to do deliveries themselves and then hop on a plane to Toronto to meet with potential investors.

He said the original idea for the business came from a British company that had built technology to allow restaurant meals to be ordered online but the delivery was the responsibility of the restaurants.

“We innovated to add the delivery component and expanded, maybe not rapidly, but it felt like it was rapid growth,” he said.

It was that same British company, Just Eat, that acquired SkipTheDishes in 2016 for about $200 million.

That year the Winnipeg company did about $24 million in sales and had about 300 employees.

The current owners, now called Just Eat Takeaway.com (Just Eat and the Dutch company Takeaway.com merged shortly after Skip was acquired and the company is in the final stage of closing on its acquisition of Grubhub), just reported 2020 financial results with its SkipTheDishes Canadian brand recording revenue of $757 million, up 59 per cent from 2019 and has about 3,000 employees, the majority of them in Winnipeg.

Simair believes strongly that the Prairies are a place that technology companies can get built and thrive and he is using the “scaffolding” of how they did it at SkipTheDishes in his work at Harvest Builders. One of Harvest’s first successful launches is Calgary-based Neo Financial (which also has an office and staff in Winnipeg), a fintech company that is innovating the credit card/savings account banking business.

Simair and his partners effectively did build a billion-dollar business (or, just shy of that), but the question was put to Charles Plant, founder of The Narwhal Project — which provides all sorts of assistance to companies looking to grow rapidly — about whether or not the Canadian economy and its startup ecosystem has what it takes to build billion-dollar tech companies.

Plant does not believe conditions are ideal. He said because of the current makeup of the Canadian venture capital industry — they are not large enough and there are too many of them — for Canadian companies to grow that large: They need better access to American or offshore venture capital.

martin.cash@freepress.mb.ca