April 22, 2020

Automotive News CANADA – Auto start-ups pivot to join COVID-19 fight amid fears of lost momentum

Original Article

Only weeks ago Polish entrepreneur Slawek Potasz was preparing to relocate his vehicle-scanning company to Toronto in April, where a berth awaited in a prestigious business-accelerator program.

Then the full impact of Covid-19 hit worldwide, grounding indefinitely Potasz’s flight to Toronto and his plans to join Canada’s burgeoning transportation-technology sector.

How long can he hold out? “Right now, we have a runway until say September,” said the InMotion Labs founder.

Among people, the elderly are the most susceptible to the novel coronavirus. In business it’s the young – small start-ups like Potasz’s, often with limited access to credit and government financial help.

“What we see is that daily, companies are dropping. And once they drop they’re gone,” warned Suzanne Grant, of the Ottawa-based Canadian Advanced Technology Alliance (CATA).

In a bid to help the innovation sector through the pandemic, Ottawa announced April 17 it was adding $250 million to the Industrial Research Assistance Program. The funding was designed to help high-tech start-ups, which were not eligible for other financial aid, such as the 75-per-cent wage subsidy program.

Yet, even with the future uncertain, some tech companies are pivoting to address the urgent need for medical supplies. Colin Dhillon, chief technology officer the Automotive Parts Manufacturers’ Association, said SMEs – or small to mid-size enterprises – are among firms answering the APMA’s call on the industry to supply crucial medical gear.

Among them are Toronto’s Forcen Inc., producing pressure sensors for ventilators being built by Canada’s auto suppliers and others, and Alchemy Nano of Kitchener, Ont., which has created a removable film to extend the life of face shields, Dhillon said.

Resourcefulness and adaptability are hallmarks of a successful startup.

INNOVATE TO SURVIVE

Dhillon believes firms putting those qualities to work in the crisis have the best chance to survive.

“Some SMEs are definitely going to struggle and to be honest, some major corporations and large companies will struggle. The difference is, those that are stepping up probably will find an innovative way out of this.”

Among the innovators is InMotion’s Potasz, who with his move to Canada postponed joined an international effort to produce “cleanbots,” or robotic platforms that can spray disinfectant and perform other tasks to protect health workers from contact with the virus. Potasz won approval from the Polish government to build prototypes that could be in hospitals by April 30.

InMotion’s robots normally follow a magnetic path around a lease or rental return and carry cameras and scanners to check for dents and scratches. An upcoming version aimed at used vehicle appraisals will measure paint depth to reveal hidden body repairs.

The company has also developed a multi-scanner system for parking enforcement that Potasz hopes could also be adapted for pandemic use: Checking the temperature of pedestrians, for example, or measuring crowd separation.

SMALL MEANS NIMBLE

The 26-year-old entrepreneur remains intent on opening in Canada, where a lower dollar and the ability to do business in the same time zone as eastern U.S. cities are major lures.

“You can actually make short trips to the U.S. while staying in Canada and growing your business from Canada,” he said.

InMotion was one of 10 start-ups selected from hundreds of applicants for the 2020 Techstars Toronto program, now set for a delayed launch in June. The business accelerator network provides mentoring and access to investors in exchange for a six-per-cent stake in the company.

Sunil Sharma, director of Techstars Toronto, said small companies aren’t always at a disadvantage in a crisis.

“They can be much more nimble, even if at the same time they are in a more precarious financial situation,” he said. Suzanne Grant of CATA agrees, but can’t help worrying about a loss of momentum in a Canadian tech sector starting to show the fruits of $36 billion in annual investment spread between universities, research institutes and programs to commercialize intellectual property.

After the alliance voiced concerns that tech startups were being shut out from federal business relief, the government resumed processing stalled claims for research credits and announced $1.2 billion in new support for entrepreneurs.

Still, multinational giants better able to withstand a COVID-19 shutdown are already scooping up engineers and developers laid off by startups.

“Those recruiters don’t stop,” said Grant. “They’re coming from companies that a little blip for three or four months isn’t going to hurt. They’ve got a lot of cash, and they’re in recruiting mode.”