The future of the climate technology industry in Canada looks bright, and foreign investors should be lining up to offer plenty of cash for expansion, according to panellists at a recent green business conference.

“For us, it’s not really borders that dictates the primary question of do we invest or not? It’s ‘Does this team have world-class talent?’ Because the team is the most important thing and Canada does have world-class talent,” Peter Sopher, investment partner with Boston-based Clean Energy Ventures, said.

Sopher was part of a panel discussion entitled, Why Canadian climate tech is stealing the international spotlight, part of MaRS Climate Impact, a green technology and investment discussion held in Toronto Dec. 4 and 5.

Canadian climate tech is also becoming more prominent around the world, according to Sopher.

“On the plus side for Canada, there’s just more confidence in the grant ecosystem here, especially going forward; you can be more capital efficient here. Talent doesn’t cost as much, and you get world-class people and there’s know-how from the oil and gas sector,” he said.

“We want to invest in companies that become pillars of the next 50 to 100 years.”

So how do Canadian companies become targets for a takeover?

“The advice I want to give to give to other Canadian founders is you have to wake up every morning wanting to win. I wake up every day thinking that I have to beat them,” Natasha Kostenuk, CEO of hydrogen storage technology company Ayrton Energy, said.

“We have to absolutely crush them and I think that’s what you have to do every single day, and you can’t really take a day off and that’s how we’re going to win this.”

What makes Canadian cleantech appealing to investors

There are some clear signs that illustrate whether a tech company is attractive to investors looking to push it forward on its journey, said an investor for a firm that invests in businesses focused on decarbonization.

“First thing is profitability. We look for companies that are profitable, that have solid economics. It’s okay to go for growth instead of profitability, as long as you have the capability to switch back to profitability if it’s needed, depending on the market. That’s No. 1,” Karine Khatcherian, managing partner of Power Sustainable, said.

“We also look for consistency. We want to see three years of steady growth. And finally, we want to see growth, or the capability for growth. We’re happy to invest in growth, but we want to see that there’s some track record of growth and more coming up.”

For one investor, the Canadian success story became apparent a few years ago after hearing about a female-focused incubator effort.

“In 2018, I came across this Women in Cleantech Challenge, and I found it interesting because we were investing already in cleantech, and I believe in female founders, but it was the first time that I’d seen it together. I’m Belgian. I have no links to Canada. I live in Singapore, so Canada is not an obvious place for us to source, but this Women in Cleantech Challenge concept intrigued me,” Michael Gryseels, founder and managing partner with Antares Ventures, said.

“I reached out to all six (female founders), and I ended up investing in three. I could have even invested in more because I found each of the founders exceptional.”

Canadian cleantech success stories

The climate tech sector has grown in years, and this has led to some positive success stories for Canadians, according to a similarly themed panel discussion.

Stuart Lombard, former founder and CEO of smart thermostat and home device company ecobee, talked about his journey from startup to becoming a target for a larger U.S. generator company.

“When we thought about the exit for ecobee, what we were really thinking about was, how do we further the mission? And so, we ended up selling the business to Generac but a big part of that was do we have an aligned view as to where the world is going and how we’re going to build the future together? They had incredible assets that we didn’t have,” he said.

But the investment story is also becoming more apparent in other areas of the climate tech sector, another founder added.

“Being in a cleantech boom for my space, which is around the utility grid, software for distributed resource management, our entire cohort was acquired within like a nine-month span, starting with Opus,” Josh Wong, founder and CEO of ThinkLabs AI, said.

Wong was a founder of Opus One Solutions Energy Corp. before it was sold to GE.

“I think we keep going to these big conglomerates who completely dominate the space for the past 100 years and in the end, it’s the customer that put us together, and it’s the customer that actually prompted GE to acquire Opus One, and that just made complete sense afterwards.”

Canada cleantech drawing foreign investment

Canada is an attractive country in which to invest in climate tech, according to Gryseels.

“I think the summary, is you’ve got exceptional founders, that’s the main reason that attracts us back here. You’ve got a very well integrated and supportive ecosystem.”

“We invest in far fewer U.S. compan(ies) than Canadian companies,” he said.

Because of its abundant resources, investors have many great reasons to look to Canada, according to an energy company executive.

“Canada is one of the energy capitals of the world and energy comes in all forms, so it’s not oil and gas or hydrogen. We need solar, we need wind. We need it all for what we’re dealing with and the solutions and we have all the resources there, the people, the know-how, the equipment, the infrastructure and the capital to make that happen,” Kostenuk said.