New venture studio takes off
Two Hamilton-born tech companies have joined forces in Launchit Solutions and gone public on the TSX Venture Exchange, aiming to help local innovators get off the ground.
Two made-in-Hamilton software development companies are now working as one in a venture studio that specializes in obesity programs and supporting local healthcare innovators.
Launchit Solutions Inc. acquired 2Gen Digital in February and together, they are a company of 40 employees that has recently gone public on the TSX Venture Exchange.
With the simplification of his company’s structure last year and the acquisition of 2Gen Digital in February, which gives Launchit Solutions expertise in the design and execution of front-end, user-friendly products, the company is ready for its public launch as a venture studio, says CEO Jamie Harsevoort.
Though Launchit has expertise in the healthcare space and is particularly specialized in obesity products, running a number national obesity programs in partnership with Novo Nordisk and Shoppers Drug Mart, having a diversified client base is still an advantage, says Harsevoort.
“One of the conundrums in healthcare is they’re late adopters to most technology. So we have some clients in engineering or logistics and other sectors that really like to push the envelope in technology, which really helps me guide a development team that understands new technologies. By the time healthcare gets around to start using them, we've got some experience.”
One of Launchit’s growth areas is in partnering with doctors or scientists who have an innovative product but need a partner willing to take the risk to bring it to market. Going public will provide a funding stream for these ventures, says Harsevoort.
Harsevoort says the public market offers a more flexible, ongoing source of funding compared to seeking private investors.
“With the Venture Exchange, which is really geared towards these smaller startup businesses, there is a much easier route to success, that is much less expensive, and a lot more capital is available than there is in the private funding markets,” he says.
“I do think the Venture Exchange is a little bit of a little bit of a hidden secret in Canada in the business community. It's usually used by mining and oil and gas startup companies, but in the tech company, and particularly health tech, people just don't know about it, or think about it. So I'm hoping that as well, that we can be a little case study to show people a roadmap that's maybe an alternative. And as a venture studio, if we're successful, we can all start investing in some of these other ventures.”
Launchit is eyeing expansions to Brazil, the U.S., and Europe and aims to become a global player, says Harsevoort, he’s also focused on supporting Canadian life sciences. Too many great ideas go south because innovators are able to get funding there, he says.
“Canada has some of the best research in the world. Even just within the Hamilton area, the quality of some of the research that comes out of different organizations is world leading in cardiology, obesity research, and autism. And we're a country that's a little bit less prone to just diagnosing via dispensing medication. So we tend to develop these really good treatment regimens, too.”
In Harsevoort’s estimation, Hamilton offers more advantages in healthcare innovation than anywhere else in the province, including McMaster University, world-class teaching hospitals, and the Synapse Life Science Consortium.
Harsevoort, who grew up in Flamborough and now lives in central Hamiton, started a software development company in 2007 called Mobility Solutions. Over the years, the company specialized in developing large, back-end data pipelines for the healthcare sector, spinning out separate companies.
“Eventually, I realized I had this group of eight companies, and that sounds bigger than it was, because some of them were really just a company that owned a little bit of intellectual property with no staff. But at some point, I discovered it was time to re-amalgamate and simplify everything. And particularly we wanted to go into the public exchange, and going in as a group of companies was difficult. When we talked to potential investors, trying to explain who we were was complicated.”
Launchit is headquartered in Westinghouse HQ on Sanford Avenue North and about two-thirds of employees live in the Hamilton-Burlington area. The remainder are elsewhere in Ontario, Nova Scotia and abroad.
“(The acquisition) has been a really smooth process,” says Mark Wu, who co-founded 2Gen in 1998 and is now chief sales and marketing officer at Launchit.
“We are already familiar with the healthcare space We've done a lot of pharma healthcare projects for some big companies, so we have experience in the field. Jamie also acquired us to assist them to build some applications. For us, it was a perfect fit.”
2Gen, which was one of Hamilton’s first web development companies, will continue to work with existing clients, while having an opportunity to grow, says Wu.
“I'm very much involved with the community. And I always want our success to contribute back to our hometown. Jamie agreed to continue supporting what we do for the community and that was a big plus for me.”
