It’s pretty bleak out there. Investors are tightening their belts amid the highest inflation in decades, and high-flying company valuations are crashing back to earth. In the last year, tech stocks witnessed their biggest setbacks since the early 2000s, and IPO activity came to a screeching halt. 

But it’s not all bad news. While many companies are hemorrhaging cash or in some cases closing their doors, new startups continue to sprout. In an effort to look beyond the gloomy headlines, The Logic spoke with five founders who’ve launched new companies despite the economic downturn. Whether building an e-commerce venture or a platform that teaches mental wellness to children, these entrepreneurs saw reason for optimism when many others did not. 

Bailey Newton, founder and CEO of Frate

When 24-year-old Bailey Newton launched Frate in April of this year, he felt there was no time like the present. 

At the time, tech markets were on the precipice of a months-long plunge, and investor bullishness was evaporating fast. But the young founder, who had been thinking about the inefficiencies of online return portals, was unperturbed. 

“It was the naivety of being a first-time founder,” Newton said. “This is something that I was so excited about that, regardless of all the outside noise, I am positive it’s going to work.” 

Toronto-based Frate is a platform that facilitates peer-to-peer returns for online shoppers. Though still in its beta phase, at its core Frate is essentially a portal embedded inside an online retailer’s store. When a customer wants to return a product, Frate re-posts the product back in the online store at a discount; rather than re-packaging and re-shipping the product back to the retailer, it is sold directly to a second buyer. The initial purchaser receives the payment for the product returned.

Newton’s elevator pitch is that Frate cuts out unnecessary shipping costs and takes the pesky task of product returns out of the hands of retailers. The company is currently working to build an internal algorithm that will establish a resale price that guarantees at least a break-even price for retailers. In a time of widespread belt-tightening, Newton believes the platform can appeal to customers and store owners alike. 

“We’re not upselling revenue right now, we’re saving costs, which is what all retailers and consumers want,” he said. 

So far, the company has inked partnerships with four retailers, and recently raised $1.96 million in pre-seed funding led by 2048 Ventures to continue building. 

Sonya Gill, CEO and founder of The Lnk

The economy in which Sonya Gill dreamed up her e-commerce firm two years ago was vastly different from the one in which she launched it this month. 

The idea for The Lnk came to her early in the COVID-19 pandemic. Online shopping was the only option for many people, and Gill could see its long-term potential, but there were still so many issues with the experience for both sellers and buyers, she thought. That meant there was an opportunity.

“You saw this plethora of merchants overseas suddenly scrambling to build not just Instagram profiles, but Shopify or Wix, or a website on WordPress,” she said. Few of those brands cut through the noise on social media. “The algorithms are all over the place; advertising is not as cheap as it used to be,” said Gill. “Things are getting lost amongst many, many, many other products.” 

Gill’s solution was to create a platform that would connect customers with curated indie brands from overseas and make the shopping experience better by handling surprise costs for consumers associated with things like shipping, duties and returns. 

Having sold her marketing company Youzus to the Australian media agency Cummins & Partners in 2015, Gill had some cash and experience to back up her new venture. Once she had a concept, she began knocking on doors, in search of prospective investors and merchants. 

By the time she launched, she had 300 brands on the platform, a team of 17 staff and board members and offices in Toronto, New York and Langley, B.C. 

Despite the economic downturn, Gill said she wasn’t afraid to launch The Lnk. While venture capital investing in Canada has nosedived from its pandemic highs, she still thinks good startups can serve as alternative investment vehicles for wealthy individuals who in the down market might be shying away from real estate or publicly traded stocks. So far, Gill has raised half of a $1-million seed round and she’s confident she’ll get the rest. “The people that are reaching out to me that have money to invest, they’re ready,” she said. “They are looking for those startups that are going to make it big.” 

Hong Phuc Nguyen, CEO of Kibbi

When Hong Phuc Nguyen left Hong Kong in early 2020, she arrived in Calgary with a pressing problem common to new immigrants: What will I do for work? 

Nguyen, a Vietnamese national, had left Hong Kong amid a wave of demonstrations over changes to the city’s extradition agreements with mainland China. When she and her husband arrived in Calgary—in the depths of the COVID-19 pandemic—she unsuccessfully fired off countless resumes for positions in her profession, marketing. After some time she began applying for “survival jobs” just to make ends meet, putting in applications at big box stores like Costco. 

“I applied for tonnes of jobs but didn’t get a response,” she said. 

She ended up in the non-profit sector. It was there that she got the idea to launch Kibbi, a job portal for new immigrants and non-English speakers. The platform works by taking entry-level positions posted by employers, translating those postings into 60 different languages, and then displaying them on a map. Kibbi is currently developing an in-app chat system that will also translate text to allow employees and employers to exchange information or answer questions. 

Nguyen said Kibbi is getting around 2,000 new downloads a month since its launch in June 2022, and it has partnered with more than 35 nonprofits in Alberta and B.C. The company plans to raise $800,000 in seed funding, which it hopes to close in January. 

Although she was aware of how inhospitable the macroeconomic climate was when she launched Kibbi, Nguyen said she had deeper reasons for founding it. The platform could help so many newcomers gain a foothold in a new country, she said. As an example, she described an uncle of hers who moved to the U.S. in search of better job prospects. Due to an uncertainty about where any alternative jobs could be found, his salary hardly increased despite years of hard work. 

“When I started making this app, he told me if he had this app when he first came to North America his life would be different.” 

Jenna Galloway, founder and CEO of Fledge

Jenna Galloway was studying medicine at the University of Calgary when a severe bout of depression and anxiety left her hospitalized for nearly two weeks. A decade later, that traumatic experience fed into her decision to launch Fledge, an online platform that gamifies mental health education for young children. 

“I went through the experience of not having the tools that I needed to really navigate what I was feeling at that time,” Galloway said.

“It really made me think about how things could be different in terms of the trajectory of a child’s development if they have these tools from an earlier age.” 

Launched in January 2022, Fledge was developed for students between kindergarten and grade three, and draws from mental health research by neuroscientists and psychologists. As a class, and with the guidance of a teacher, students are encouraged to build their mental health awareness through tasks like breathing activities or exercises where they are prompted to consider what emotions they are feeling and why. It is structured so that the students advance through the prompts in a game-like format. 

“It’s kind of like Minecraft but for mental health,” Galloway said. 

In early 2022, startup funding was just beginning to drop off as inflationary pressures continued to bite. Galloway was undeterred by the chaos around her, however, driven in particular by a belief that the pandemic underscored mental health challenges that applications like Fledge could help address at a young age. 

“I was very aware that it would be challenging to start a business in this environment,” she said. “However, I also see that there’s a huge opportunity, and that this particular problem needs to be addressed now, and the conversations that we’ve had with investors who really understand the purpose and vision behind what we’re doing is very positive,” she said.

The company is currently hoping to raise a pre-seed round of $500,000, which it hopes to close in January. So far Fledge has been tested with 30 educators, and the company aims to launch a wider pilot project next year. 

Mark Proudfoot and Alex Conconi, co-founders of Wecasa

When Mark Proudfoot and Alex Conconi first started building Wecasa in the fall of 2021, it might have seemed like the exact wrong time to launch a luxury home co-sharing service. The Bank of Canada was months away from announcing the first in a series of rate hikes to combat inflation, setting off a period of economic turmoil and consumer belt-tightening.  

But the pair hardly saw things that way. Instead, they saw plenty of reason for optimism in the co-shared real estate market—in which people buy a slice of a property and divide the time they use it among the other co-owners—largely due to pandemic work-from-home provisions that proved to many people that they could work from anywhere, including secondary properties. Co-sharing, they thought, would also offer cheaper options for aging baby boomers. As they near retirement, many expect them to be on the lookout for secondary getaways or vacation homes. 

“The almost wholesale transition to flexible work for knowledge workers that happened during the pandemic really gave us conviction that a lot of people were going to be spending a lot more time in the leisure property markets,” Proudfoot said. 

Vancouver-based Wecasa buys homes, then converts them into co-sharing common spaces equipped with amenities like lockers, where owners can store things when they’re not staying at the property. The company then divides the cost of the home into eight equal segments and sells them to would-be co-owners, each of whom can buy however many segments they like based on how often they plan to live at the home. Owners can book time at the home over a central app. 

Wecasa only officially launched in early December 2022, and the company currently has two properties for sale in British Columbia’s Okanagan region and in Whistler. So far, costs for a share in the properties range from $300,000 to $1.2 million. Wecasa plans to buy more properties in the coming year. With the backing of Conconi’s VC fund, Conconi Growth Partners, the company closed its $4.2-million pre-seed funding round in June, and is preparing to announce an additional debt-financing arrangement.