MaRS partners Vimy Forge to fund defence startups
Toronto’s MaRS Discovery District and the Fredericton-based defence accelerator Vimy Forge announced a partnership aimed at linking Canadian defence and dual-use startups with venture investors.
Matching capital with early-stage defence firms
“Most of the capital in this country, especially in the defence sector, is chasing companies that have already proven themselves,” said Liam Gill, head of MaRS’s capital program. The collaboration will function as a “capital matchmaking engine” that pairs unproven firms with investors familiar with defence-sector risk.
Investors often lack insight into military procurement processes, while founders typically do not have the contacts needed to turn technical know-how into a fundable business. The partnership seeks to close that gap.
The joint effort will target startups that have not yet demonstrated commercial viability and help them reach the technical, commercial and organizational milestones required to become investable, mission-ready ventures.
Bridging the gap between military needs and entrepreneurship
Vimy Forge has already been connecting founders with potential military end users; the new alliance adds a financing dimension to its existing work.
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“We don’t have this soft connective tissue,” said managing director and co-founder Duncan McSporran, a former British army officer who now supports research at the University of New Brunswick. He and co-founder Ian Whytock began discussing the challenges facing Canadian defence startups about two-and-a-half years ago.
Veterans may know what the Canadian Armed Forces need but lack corporate experience, while founders often have the technology but no military contacts to refine ideas for battlefield use.
If the matchmaking engine can consistently surface startups that meet early technical milestones, it could lower the perceived risk for investors and encourage more capital to flow into the sector.
The Canadian military has too few personnel to devote time to informal innovation discussions, and well-funded prime contractors can wait for government decisions—something cash-strapped startups cannot afford.
Ian Whytock notes that investors accustomed to SaaS metrics find defence pitches challenging because revenue is often tied to a single large contract rather than recurring subscriptions. “We’ve got a whole generation of investors that look at annual recurring revenue as the crown jewel,” he said.
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Once a product is adopted by the forces, it becomes “extremely sticky,” according to Whytock, making it difficult for competitors to displace.
Fredericton was chosen for its technical expertise at the University of New Brunswick, provincial support, and proximity to major bases: CFB Gagetown for the army, CFB Greenwood for the air force, and CFB Halifax for the navy, all within a four-hour drive.
Vimy Forge completed a first cohort that included Cellula Robotics of Burnaby and Wuxly of Mississauga. The accelerator, operating as a non-profit with public funding, plans to launch its second cohort in January.
Strategic location and military proximity
Geographic concentration of army, air force and navy installations within a short driving distance creates a unique ecosystem for testing and feedback.
