Propel has been around for over 20 years, helping founders in Atlantic Canada. In this exclusive interaction with Kathryn Lockhart, CEO of Propel, The Tech Factor finds out more about her journey, the challenges & opportunities in Atlantic Canada, the region’s recent VC activity, and Propel’s impact.
For over two decades, Propel has been part of the growing tech startup ecosystem in Atlantic Canada. About four years ago, Kathryn Lockhart took over as the CEO of the accelerator. She’s spearheaded its shift to a virtual continuous-intake model and pushed forth with what she terms as the ‘baby unicorn’ movement. The Tech Factor caught up with her in this exclusive tete-a-tete.
Kathryn Lockhart: Background in business & startups
Recently listed among Atlantic Canada’s 25 most powerful women in business by Atlantic Business Magazine, Kathryn Lockhart has spent most of her life in the region. She has a Bachelor of Philosophy in Interdisciplinary Leadership from Renaissance College, University of New Brunswick, and an MBA from Harvard Business School. Her professional career started in Toronto, where she established and expanded a human capital management company’s first technology division.
After that, she moved to Europe, where she managed two startups in Germany. One was in Munich and the other in Oldenburg, where she also oversaw strategic expansion. She then returned to Canada and worked for Bluedrop Learning Networks, a Saint John’s-based company, as vice president of corporate strategy.
So how did her journey culminate at Propel?
Kathryn told The Tech Factor – “I have a degree in leadership and also an MBA. I’ve always been involved with tech companies – whether in Toronto, with my own startup I launched in Germany, to tech companies in Newfoundland, and Medtech startups. I think my unconventional career path, which also led to my return to New Brunswick, has given me the ability to relate well with the founders at Propel. And my passion for Atlantic Canada aligns with Propel’s mission of growing great companies, right here in the region.”
Propel offers networking assistance, knowledge, mentoring, as well as skill development to Atlantic Canada’s pre- and post-revenue startups.
Atlantic Canada growing in VC share but challenges remain
Now, as per CVCA data, the four Atlantic Canada provinces collectively saw over CA$256M VC investment in 2021, CA$230M in 2022 and about CA$208M in 2023. Overall, this declining venture capital investment activity in the region over the past three years is in line with the national trend. However, the region’s share of the VC funding in Canada has been growing steadily – 1.8% in 2021, to 2.3% in 2022 and to 3% in 2023. With Atlantic Canada being home to about 7% of Canada’s population, there’s probably still more room to grow. Of course, the region doesn’t have a large-scale tech centre like Toronto, Montreal or Vancouver, so there are limitations.
The Tech Factor asked Kathryn Lockhart about the unique challenges and opportunities Atlantic Canada brings for tech entrepreneurs.
She highlighted – “Atlantic Canada is a kind, friendly, and welcoming place, but it’s also risk-averse. Founders here need to be brave and comfortable with ambiguity and risk-taking. The challenge is overcoming this risk-averse mentality, especially when it comes to funding. Moreover, founders often need to travel, which can be expensive, to connect with customers, partners, and investors outside the region.
At the same time, the entrepreneurial appetite in Atlantic Canada is real and growing. We have smart founders and a lot of support available. The region is hyper-connected, making it easy to get valuable meetings quickly. The culture is conducive to fast-paced learning and connectivity. We also have excellent non-dilutive funding support from provincial and federal governments, which is very helpful to startups.”
While the CVCA data on non-dilutive financing for 2021 and 2022 isn’t comprehensive, it suggests that Atlantic Canada accounted for 1.5-1.6% of the country’s SR&ED backed financing and venture debt dollar activity. So, probably there’s potential to grow there too.
Founder response to virtual model of Propel
At present, Propel runs two programs, both as e-accelerator courses. ‘Vision & Validation’ is for idea-stage startups with less than CA$1,000 in revenue, while ‘Traction & Growth’ is for founders who’ve crossed that milestone. Both programs run on continuous intake of startups through the year. So how has been the founder response to the programs and Propel’s virtual model?
Kathryn Lockhart shared – “We’ve been growing and now serve over 115 companies a year, with over 175 founders across Atlantic Canada. Founders appreciate the support of dedicated coaches who get to know them well. Our main filtering criterion is ‘coachability’. Our model works best for those open to learning and feedback from our experienced coaches.
We’ve been virtual since 2018, even before the pandemic. Our operational team ensures it’s a well-oiled machine. We screen extensively for the best speakers and relevant content for our founders. Accountability is a big part of our program, with mandatory attendance and clear expectations. This model works well for founders open to coaching and feedback but may not suit those needing a physical space or resistant to feedback.
Our success is seeing founders evolve, from being excited about a product feature to being obsessed with solving customer problems. We want to see traction and action within their operations, demonstrating their growth in skills and leadership.”
Support for Propel & current challenges
Last year, Propel received CA$1.05 million in funding from the Government of Nova Scotia. Later in the year, the Atlantic Canada Opportunities Agency (ACOA) awarded it an additional CA$2.9 million grant. Gudie Hutching, Minister of Rural Economic Development and Minister responsible for ACOA, had called Propel “the wind in our sails here in Atlantic Canada” with the announcement. These grants will keep funding Propel till 2026, and are instrumental in the scale & impact it’s trying to create.
Kathryn Lockhart divulged – “We are grateful for the support from the four provincial governments and ACOA, which funds about 50% of our operations. Our lean operations, being virtual, allow us to serve over 115 companies annually. Our supporters have been instrumental in our success. Even internally, our team now includes about 10 people, with five to six coaches. These full-time staff are dedicated to working directly with founders.
One major challenge currently is supporting founders in the current venture capital market. We focus on making bootstrapping attractive again, emphasizing customer revenue and early market traction as viable paths to success without relying solely on venture capital.”
With the venture capital market expected to rebound earliest next year, this is indeed a widely-shared sentiment in the market.
What’s the founder feedback on Propel’s efforts?
The accelerator has had success with follow-on rounds for its accelerated startups, frenter and QuickFacts a couple among them.
Christy Silvestri, Founder and CEO of QuickFacts, wrote that participating in the Propel accelerator was transformative for her. She mentioned that Propel’s programming and coaching provided invaluable guidance on refining their Ideal Customer Profile, strategizing fundraising efforts, and connecting with a robust network within the ecosystem.
Other founders, like Imad Boumahdi of PayTic, also recommended the program & attributed their success to the strategic insights and in-depth content provided by Propel. Joel Muise, Co-founder of Tranquility Online who sold to GreenShield Health, lent high credence to the validation program:
“I came into Propel accelerator with just an idea. No co-founder, no MVP, nothing, so I really learned everything I needed to know to start my company, from business planning to incorporating, to building a customer validated MVP!”
Joel Muise, Co-founder of Tranquility Online
What’s next for Propel & Kathryn Lockhart?
Earlier in May and June, Propel unveiled the latest startup participants in both its programs. Some of the notable startups included atlantiq AI, Trippl, Starluv, Innovate Accounting, Keto Newfs, TicketIO, SkillConnect, TheBox, and CashLoop Technologies, among others. With funding secured till 2026, Propel seems set on its path to accelerate over 100 companies annually.
Kathryn has stated in her baby unicorn vision earlier that Atlantic Canada has the ability and opportunity to elevate 100 firms to a valuation between CA$50 and CA$100 million. She wants to continue seeing more successes in the region for launching and expanding new businesses. It’s worth noting that just a few weeks ago, Halifax-based Innerlogic announced its seed round.
Now based in Saint John, New Brunswick, Kathryn no longer believes that one needs to leave the region to have a great career. Through her work and with Propel’s mission, she’s trying to do her part to keep it true.
