August 26, 2020

AFTIA: Stories of Survival from Canada’s Tech Innovators

Since the Canadian Advanced Technology Alliance (CATA) was created 42 years ago we have represented the interests of Small and Medium science
and technology-centric enterprises. Today these Canada headquartered businesses are in the tens of thousands and have grown to be the heart of the Canadian economy generating $188B in annual revenues. 

We are over 150 days into COVID19 and we do not see a comprehensive restart or response plan for the technology sector. We see well placed companies thriving and others struggling. News of staff layoffs and acquisition activity continues. Many seek equity for new opportunities, pivoting to other markets, applications and verticals. Tech firms, their IP and talent, remain crucial to Canada’s future economy and job creation.

In this ongoing series, we profile companies dealing with the reality of COVID-19 and their experience with emergency government support programs.

For all those struggling there are others that have seen a rise in business activity.  They are examples of what CATA contends is why tech firms can help drive economic recovery.

We are inspired, we hope you are too.

Right Product, Right Time And AFTIA Is Enjoying A Spike In Business.

A 30-40% increase in revenue for a small firm during a pandemic and economic shutdown is a clear indicator that you have what other companies want.  For AFTIA, a five-year-old Ottawa company, what it offers are solutions to moving a company towards digital transformation and improving the workflow. The founders saw a gap in the solutions available to companies, especially solutions that would enable forms and documents to be integrated.

It may not be the Shopify increase of 83% in profits and 71% increase in client companies during Q2 but co-founder and Chief Operating Officer, Rodney Waugh says AFTIA is benefiting from the same workplace trends driving Shopify and that is the need to move business activity to the online and digital world. Companies and their customers are shifting to remote work and accelerating digital transformation doing in months what might have taken years to unfold.

In July of 2020 research company, Avant Analytics reported that the global Unified Communications as a Service (UCaaS) sales during March increased by 86%compared to the month before as the world shifted to remote work. “The pandemic has accelerated digital transformation plans, making business leaders more aware of any gaps in their legacy communications solutions,” said Ian Kieninger, CEO and co-founder of Avant Communications.

Key AFTIA digital services including eSignature

Waugh says the shift driven by COVID-19 has generated new business and for AFTIA the most demand in recent months is for the eSignature service. The use of eSignatures is not new but COIVD like so many other changes accelerated a shift the has been building for years. A secure signature is the cornerstone of moving manual processes into the digital world. Generating a global revenue of almost a billion dollars in 2019, the entire market for electronic signatures is forecast to skyrocket and hit $9 billion by 2023.

Business opportunities would seem to abound according to a survey by Montreal’s OVHCloud that indicates 48% of Canadian businesses say they are not prepared to either support or maintain long-term remote work because of the digitization shift required. The survey was released at the end of July and meshes with another survey released just days before by Salesforce that indicates 30% of firms do not believe they are prepared to reopen and 20% say they do not have the right technology in place to enable a re-opening.

Business Surveys on preparedness for digital transformation and reopening.

48% not prepared to support or maintain remote work
30% of firms not ready to reopen after COVID lockdown
20% need the right technology to enable reopening

AFTIA has hired a few people during the COVID lockdown and because revenues are up the company could not qualify for most government assistance programs other than the $40,000 partially forgivable loan.

Rodney Waugh Co-Founder and COO, AFTIA

In the past AFTIA was able to expedite hiring more people because of the funding it received through the federal Scientific Research and Experimental Development (SR&ED) program. “AFTIA has been using SR&ED since our first year of operation. It makes a huge difference and ensures that you can grow a company.” The Canadian Advanced Technology Alliance (CATA) believes the SR&ED program is a viable and effective way to get assistance out to Canada’s innovators. “If the CATA plan were implemented and we received the funding it would make a huge difference. Right now cash is everything.”

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CATA’S proposed Resilience and Rebound (RR) Fund and Data Solution  seeks to provide simpler assistance eligibility using available Canadian Revenue Agency audited data. Proportionate and partly forgivable loans, pegged to previous SR&ED claim amounts, will help bring talent back to work and retain sovereign IP as a foundation for bridging to the future. Funds would finance growth expansion and development of new commercial opportunities and/or help bridge stressed COVID19 induced issues for these firms.  StatsCan data reveals that 13,000 Canadian SMEs have established SR&ED records and they directly employ 760,000 and with downstream jobs added in they support 4 million people.