Toronto-based Outside Intelligence Inc. has been acquired by New York-based Exiger LLC, the Canadian firm’s largest outside investor. A source familiar with the deal said it valued Outside Intelligence Inc., an Artificial Intelligence (AI) start-up, at $30 million.
This acquisition follows an interesting trend. Domestic Canadian start-ups seem to be selling to foreign buyers in their numbers. Canada has a fertile AI ecosystem. For example, it’s home to some of the world’s leading AI experts, namely the University of Toronto’s Geoff Hinton, Yoshua Bengio at University of Montreal and Rich Sutton at University of Alberta. Furthermore, researchers from University of Toronto and the University of British Columbia now hold senior AI positions with Apple, Uber, Microsoft and Elon Musk’s OpenAI.
Some are worried that foreign buyers will extract domestic AI start-up firms before they can grow into domestic giants. In the last few months, AI firms Meta Inc. of Toronto and Montreal-based Maluuba have been purchased by the Chan Zuckerberg Initiative and Microsoft, respectively. Also, Microsoft and Google have actively funded Canadian AI initiatives including Toronto’s Vector Institute.
“We’re seeing a lot of early-stage AI companies selling because there are a lot of buyers offering premiums,” said Steve Irvine, an ex-Facebook executive who moved back to Toronto to start the AI firm Integrate.ai.