Kitchener-based Nicoya, which employs nanotechnology and AI to make analytical instruments that help scientists and medical personnel produce treatments for disease, is poised for aggressive growth after completing a CDN$10-million Series A raise, the company announced today.
The new money, which follows a $2-million seed extension two years ago, was led by Toronto’s Whitecap Venture Partners, with participation from existing investors Garage Capital, MaRS IAF, Laurier Startup Fund, the University of Waterloo Student Venture Fund and others.
Nicoya, a University of Waterloo spinoff, got its start in 2012 and took part in Communitech’s Rev sales accelerator in 2015.
“The future of drug discovery is digital, and we are developing some of the most advanced technologies in the world to support this,” said Ryan Denomme, co-founder and CEO of Nicoya. “The impact our technology will have on human health in the future is significant, but requires the support of great partners, including the team at Whitecap.”
Nicoya has grown steadily. It now has 50 employees, a significant increase from 19 two years ago. Denomme said the company is aiming to expand to 80 employees over the next year.
“One of the reasons we’re hiring people is to support the launch and ongoing commercialization of new products,” said Denomme, adding that a new product, one the company expects to announce within the next couple of weeks, will expand the company’s reach into the biotech and pharma industries.
“We have a really nice international footprint now but being able to put more resources in some very high-potential areas like Asia and Europe is another piece that we’re working on.”
Denomme said he was particularly pleased the round was fuelled by Canadian, rather than U.S., venture capital.
“You read a lot of different articles about trying to keep the benefits of tech companies in Canada, but the reality is most companies in Canada are getting later-stage funding from U.S. VCs. So we were definitely happy we were able to have a Canadian VC, and a really good one at that, be the lead on the round.
“In a lot of ways, because the ecosystem is pretty small and tight-knit, especially for anyone doing investments in biotech or med tech in Canada, you get to know them over the years and so you get to build some relationships and it definitely makes going through the process of fundraising easier. We did talk to U.S. and Canadian VCs through the process, but we’re very happy it worked out the way it did.”
Nicoya’s growth has come despite the absence of a teaching hospital in the Waterloo Region area. Local efforts have begun to build support for hospital improvements, and Denomme said that a teaching hospital “would definitely” spur additional growth “for a company like ours.
“If you’re attracting people that are highly skilled in the field of health care, and biotechnology, the more things you can do to attract those people to the region, the better it’s going to be, just in terms of talent and also long-term partnerships and potential customers.
“We have a lot of customers who do medical research, who are also in an M.D., Ph.D. type of position, so, long term, I think there’s lots of upside that a company like ours would see from [a teaching hospital].”