AI auditing startup MindBridge gets $14.5 million from Ottawa’s Strategic Innovation Fund


Ottawa-based MindBridge Analytics, an artificial intelligence (AI) company for accountants auditing financial data, will receive $14.5 million from the federal government’s flagship Strategic Innovation Fund (SIF).

The Logic reporter Murad Hemmadi spoke with Innovation Minister Navdeep Bains—an accountant by training—about the investment in MindBridge, and the future of the $2.51-billion SIF, which is supposed to help cutting-edge Canadian companies compete globally.

What the money is for: Expanding the technology to financial services organizations in banking and insurance over the next 12 to 18 months. The company has already signed up some clients in the industry, including the Bank of England and Payments Canada, according to MindBridge CEO Eli Fathi. It is also looking at sectors like energy.

What MindBridge is promising: A $140.8-million investment over seven years, and 200 new jobs by 2030.

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Why MindBridge matters (to Canada): The company is one of a small number of AI firms who have been out of the research phase for years and selling their products to large firms. MindBridge launched its auditing tool in November 2016. Some of Canada’s best-funded AI firms, like Montreal’s Element AI ($137.5-million Series A in 2017) are only just announcing their first products.

What MindBridge said: “This investment … enables us to become stronger before the Americans are going to come in and take the company out,” said Fathi.

Who else is providing funding: MindBridge also announced a $15.1-million investment round led by New York-based PeakSpan Capital, with contributions from existing domestic backers Real Ventures, the National Bank of Canada and The Group Ventures.

What’s happened with the SIF so far: The government has awarded $1.3 billion from the $2.51-billion SIF. It originally allocated $1.26 billion over five years in the 2017 federal budget but has added an additional $1.25 billion, as the program has rolled out funding faster than originally announced.

What’s next for the SIF: More funding will be allocated between now and the start of the campaign for the scheduled October election. “You will see more announcements from our government in the coming weeks and months,” Bains told The Logic at MindBridge’s Ottawa office. He said the government’s strategy for SIF hasn’t changed, despite the fact it suspended a $24-million SIF award to Kitchener, Ont.-based North in February, after the wearables company laid off 150 employees. “Our approach is very much the same: do our homework, do our due diligence, examine all the relevant information and make smart co-investments,” he said. “And we’re confident that model will continue to yield strong economic benefits.”

Why MindBridge matters (in Ottawa): The company has grown its headcount from 47 employees to more than 100 over the last year. Fathi is also a member of the federal government’s Advisory Council on Artificial Intelligence.

How MindBridge is different from BlackBerry: In February, BlackBerry received $40 million from the SIF for its QNX connected car software, developed in Ottawa. At the time, CEO John Chen said the funding was not necessary to make its R&D investment. Fathi said that’s not the case for MindBridge, because Silicon Valley competitors have access to larger amounts of venture capital. “Mr. Chen has $2 billion, probably in his bank account, so he doesn’t need $20 million,” he said. “But for us, it’s very important.”