GaN Systems believes it’s on the verge of becoming a clean-tech industry powerhouse, and Larry Spaziani can barely contain his own energy when talking about it.
GaN Systems’ Larry Spaziani.
“We’re focused on growing a business, but it sure feels good when you can do it and save an enormous amount of energy (costs for clients),” said Mr. Spaziani, the Kanata-based company’s vice-president of sales and marketing as well as its acting general manager.
GaN Systems in one of about 240 local firms in the clean technology cluster and among its most successful. The company – one of only a few in the world that manufactures ultra-fast, super-efficient semiconductors using a compound called gallium nitride instead of the traditional silicon – now employs 52 people, about three-quarters of them in Ottawa, and last year landed $20 million in venture capital funding.
Part of that round came from the Business Development Bank of Canada’s ICE Venture Fund, which invested in 18 promising clean-tech startups across the country. Mr. Spaziani said the capital infusion allowed the fledgling business to fortify its testing facilities and its operations team, including its sales and marketing staff, in its bid to scale up.
The company has since expanded its customer base from just three clients to nearly 1,000, ranging from Vancouver to New Zealand. Its annual revenues have hit seven digits, and the firm has set its sights on an ambitious goal: becoming a $100-million enterprise within three years.
Mr. Spaziani says GaN’s technology can make electric car engines 30 per cent more efficient and save data centres – buildings with thousands of servers that store information for the likes of Google and Microsoft – millions of dollars a year in electricity costs.
“That’s why BDC invested in us,” he said. “They see the impact this technology can bring.”
BDC’s initial fund was so successful the crown corporation launched a follow-on last month, pledging to invest another $135 million in a new fund to aid more startups in the clean-tech sector.
“Our goal is to intensify our support for innovative Canadian entrepreneurs who are leading the way in the transition to a low-carbon economy,” said Jerome Nycz, BDC Capital’s executive vice-president.
That’s music to the ears of industry insiders such as Mr. Spaziani and Blair Patacairk, the director of investment and trade at Invest Ottawa.
They say the capital is an emerging force in clean-tech, with more than 4,600 workers now employed in the sector, and BDC’s recent announcement will only help fuel more innovation in the field.
“This is still an emerging sector, and with the advent of the clean technology companies that are here, this is a welcome opportunity for these companies to try and get some venture capital,” Mr. Patacairk said.
The uncertainty surrounding some existing government-funded efforts to boost the clean energy sector such as Ontario’s Feed-In Tariff Program makes BDC’s latest fund all the more important, he added. He believes many of Ottawa’s young clean-tech enterprises are “right in the wheelhouse” of what the bank is looking for when it comes to funding opportunities.
The federal Liberals appear to be putting a high priority on clean-tech initiatives, Mr. Patacairk said. Having a local MP, Catherine McKenna, in charge of the environment portfolio can’t hurt the Ottawa industry’s chances of success either, he added.
Programs like the new BDC fund can help new firms find their footing before venturing into international markets, he explained.
“If they can cut their teeth on their own home turf, it’s way easier” for clean-tech companies to sell their products abroad, Mr. Patacairk said.
“We’re really starting to see traction.”