Wealthsimple's War Room, Xanadu's Moonshot, and an Uber-inspired approach to accelerating innovation in Canada

Tech leaders share post-ZIRP strategies at BetaKit Talks: In the Black, hosted by Float.

What did the last year look like for Canada's largest and fastest-growing technology company?

At Wealthsimple, the challenge was to restructure revenue streams; at Float, the company shifted its product roadmap; and at Xanadus, the CEO is traveling frequently to discuss the potential of quantum computing with investors and policymakers as the company prepares to raise $200 million in Canadian funding.

If you're going to run a company, you need to stand up and say what you think is best for the company.

Rob Kazam, Float

Fresh off its win at SABEW Canada, BetaKit hosted an audience of 100 leaders and financial professionals at BetaKit Talks: In the Black on June 25th.

Hosted in partnership with Float, which recently released a bill payment and refund product as part of its all-in-one business finance platform, the BetaKit Talks event series brings together Canadian tech industry leaders for candid conversations about important topics.

In a packed room at Toronto's StartWell event studios, BetaKit CEO Siri Agrell led a conversation with Rob Khazzam, CEO and co-founder of Float, Christian Weedbrook, CEO and founder of Xanadu, and Hanna Zaidi, VP of payments strategy and CCO at Wealthsimple, about the economic downturn and navigating regulatory hurdles in Canada.

It became about finding new revenue opportunities, finding opportunities to control costs, said Zaidi, who documented the industry's recent shift from a growth mindset to a cost-control priority. This is where certain teams and groups really thrived.

It burns

The past few years have been tough for technology companies across the board, and in a candid look at how they weathered the economic downturn, featured leaders spoke about changes in hiring practices, goal setting and strategic planning.

Zaidi, who leads Wealthsimple's payments strategy, recalled taking a step back to develop a clear plan and set thorough priorities.

The key is to define clear metrics — we went from having daily strategy meetings to weekly, then monthly, she said — and not look at vanity metrics, but at what actually drives you.

The company was able to introduce new revenue streams by internalizing its foreign exchange processes while simultaneously reviewing its banking contracts to achieve significant cost savings.

“We thoroughly negotiated every agreement,” Zaidi said candidly, before outlining to the audience Wealthsimples’ six-pronged approach to weathering headwinds and diversifying away from transaction-based revenue.

For Weedbrook and Xanadu, the impact of rising interest rates and declining external investment has been minimal, as the timeline for their ambitions to build a quantum data center is significantly longer.

“I only found out last week what the revenue means,” Weedbrook joked.

But quantum computing company Xanadu needed to secure a lot of funding early on to build cutting-edge technology that had never been seen before. Because of the nature of the work, investors knew their money would be invested for the long term, which insulated the company from the pressures of rising interest rates and demands for short-term profits.

“We're still one of those moonshot companies. It was like pre-internet,” Weedbrook said. “Look for investors and venture capitalists who are looking for something longer term. They're not as concerned with monthly or yearly fluctuations. In fact, they're probably the best type of investor for anything you do.”

But that doesn't mean the founder isn't under pressure from the outside: He'll be traveling the world over the next year as part of the company's effort to raise the next $200 million, nearly all of which will go toward necessary investments in hardware and infrastructure.

Timing was also important for Float: the company raised its seed and Series A rounds within seven months of each other, just before interest rates began to rise. But while this gave Float financial breathing room, it also put immense pressure on the company to demonstrate growth that matched its valuation – a challenge the company overcame successfully.

Rob Khazzam, CEO and co-founder of Float, talks about the importance of timing fundraising. (Image credit: Douglas Soltys)

“Over the past year and a half, our team size has effectively grown by six people, yet our revenue has more than doubled,” he said.

Dramatic economic changes have altered Float’s product roadmap, and we’ve worked on external products and strategies to help customers understand the percentage they can save for every dollar they spend on Float.

Are we actually saving our customers time and money, or are we just making it easier for them to spend their money? Khazzam asked.

Leaders acknowledged that changing economic conditions are also impacting employees, who must adapt to new workplace norms while navigating a tough job market and high costs of living.

Traditionally, the tech industry has attracted ambitious talent, but now there is a need to foster a more conservative, save-and-retain mindset, calling for a new approach from employers.

2021 was a time when no one wanted to say anything that would scare talent away. That's just a cowardly way to run a company, Kazam said. If you're going to run a company, you need to stand up and say what you think is best for the company.

Weedbrook agreed that it's important to find people who are motivated by purpose and mission: At Xanadu, employees know that their work is groundbreaking and intrinsically rewarding.

Each leader acknowledged that compensation and incentives are important, but what that entails varies depending on each company and its product focus.

“Each company is like a country with its own laws,” says Weedbrook, who now has most of his team back in the office full time. He needs a healthy dose of encouragement to keep him motivated.

The next big thing

During the event, each leader also shared ambitious goals that will drive them through difficult times.

Wealthsimple is already used by one in five Canadians under the age of 40, but Zaidi said the company's next goal is to challenge the big six Canadian banks and become the primary financial relationship for all Canadians.

Xanadu wants to build a quantum version of its data centre in Toronto this decade.

“Ultimately, we'll have a data center that's half the size of a football field, an acre of land, with hundreds of thousands of servers,” Weedbrook said. “And we want to build a quantum version of that ourselves. We'd like to do it somewhere along the lake.”

Each company is like a country with its own laws and you need a healthy force to push you and keep you motivated.

Christian Weedbrook, Xanadu

Kazam said while the float has ambitious, profit-driven goals, his own objectives relate to engaging Canadians in the possibilities of open banking, quantum and other innovations that can benefit people's lives.

“What is our generation going to do in the next 50 years to contribute to our country and future generations to the same extent as our ancestors did?” he asked. “I think we all need to level up.”

A common obstacle preventing each leader from reaching their goal is government policy and the slow pace of investment and adoption, which Shopify CEO Tobi Ltke calls Canada’s “culture of going for bronze.”

Weedbrook noted that two of the world's largest pension funds are based in Canada, a fact that doesn't align with the general perception of where you can invest.

“I'm travelling around the world preparing for the next round because I need to build relationships and explain quantum computing, which takes more time,” he said. “Realistically, there are sovereign wealth funds in Dubai and Singapore, so I'd rather walk to the pension fund than take a 15-hour flight.”

Kazam asked Weedbrook whether it was important for the next round of funding to be entirely within Canada.

“Yes, I'm Australian and I've already given up a country,” he said. “Just give it a try. You shouldn't automatically think, 'Let's go somewhere else.' It's possible. The more you do this, the more your first reaction will be, 'Let's find Toronto or Canada.'”

The two leaders spoke in depth about Canada's “culture of enough,” with Kazam pointing to widespread acceptance of Ontario beer stores limiting consumer choice in favor of perpetuating monopolies.

Zaidi added that regulatory and policy barriers are preventing Canadian companies from making big leaps, but a trend of discontent among tech companies doesn't help either. She believes the first step to change is finding strategic ways to connect with policymakers.

Policymakers often don't know, care or understand why these things matter to Canadians, said Zaidi, and the tech industry needs to be more effective in connecting with policymakers by better understanding their motivations.

Kazam cited his experience as general manager of Uber Canada as an example of how garnering public support and buy-in can create much-needed urgency around regulatory change.

“If no one in Canada cares about these things and tells people they care, nothing will happen,” he said. “The world, and Canada in particular, can change. It's all about belief, inspiration, ambition, and nurturing it.”

Provided by

Float is Canada's only business finance platform that lets you manage all your non-payroll expenses in one place. Sign up for Float and get early access to bill payments and refunds.

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