A man takes a photograph of the sign next to the entrance of Collision 2022 at Enercare Centre, Toronto, on June 22, 2022.Eduardo Lima/The Globe and Mail
Crypto is out and artificial intelligence is in at Toronto’s annual tech bash.
As thousands of global technology leaders, workers and investors arrive in town for one of the industry’s biggest events, the Collision Conference, executives are acknowledging their fractured reality.
There is a renewed sense of excitement in the sector, thanks to a protracted hype cycle for AI this year, which many say has replaced the fanfare for cryptocurrencies. But sustaining that enthusiasm could prove to be difficult, with the current financial environment challenging companies amid a tech slump that started early last year.
Many startups are desperately looking for capital in a dry market, valuations in general have taken a beating, profitability remains elusive for many, and companies big and small have slashed jobs in successive rounds over the past year.
For those looking to pitch their businesses to the broader public and solicit venture funding – big reasons why people travel widely to Collision – AI has been a source of much-needed relief. As the focus of conversations at the conference shifts to chatbots and large language models instead of blockchains and digital assets, however, some of Canada’s most prominent crypto companies have decided to forego Collision.
“I don’t think it’s a big secret that crypto is no longer the talk of the town,” said Dean Skurka, president and chief executive officer of Vancouver-based WonderFi Technologies Inc., WNDR-T which recently signed an agreement with Toronto-based firms CoinSmart Financial Inc. CONMF and Coinsquare Ltd. to create Canada’s largest cryptocurrency trading platform.
WonderFi had a big presence at Collision last year, Mr. Skurka said. In 2023, it won’t even have a booth there.
This is the case for Ether Capital Corp., DTSRF too. “The hype has certainly moved from one corner to the next, so we’re just not seeing any content at the conference in the form of panels or anything like that showing us there’s an absolute need to attend,” said Brian Mosoff, the Toronto-based company’s CEO.
But it’s not just crypto companies; venture capitalists have been sharing similar thoughts. Many leading investors say they wonder whether conferences, which have previously functioned as launchpads for deal-making, are necessary to their operations.
Sophie Forest, managing partner at Montreal-based Brightspark Ventures, said she didn’t initially plan to attend Collision this year, though she has changed her mind since.
Ms. Forest believes the conference may become a “more of a lifting-your-spirits kind of show,” with AI dominating the conversation, rather than a meaningful way to gauge which companies and products are worth putting money toward. “I always worry when we talk too much about something,” she said, adding that it’s important to step away from the hype.
Laura Lenz, a partner leading the investment activity for the Ontario Municipal Employees Retirement System pension fund, said AI companies are bringing the excitement back to venture capital. It’s one of the reasons why she’ll be attending Collision this week to hear from some of them. But “whether or not those companies are long-term sustainable businesses will be told in the future stories,” Ms. Lenz said.
AI “doesn’t have a material impact in our world yet, but we are very close to it. And it’s a big topic of conversation,” said Lisa Melchior, founder of Vertu Capital, a tech-focused private equity fund in Toronto.
For Ms. Melchior and some other investors, Collision is a great way to get rid of so-called dry powder, meaning funds that are ready to be quickly deployed. “Collision is early stage for us, so it’s top of the funnel. It’s seeing what’s up there which could be a Vertu opportunity years from now,” she said.
Still, Ms. Melchior said the conference “isn’t the only thing happening” this week. She and other investors will be networking off-site in restaurants, cafés and other meeting spots across the city this week, even if that means they may miss the keynote presentations at Collision.
Paddy Cosgrave, Collision’s CEO and co-founder, says he’s not worried about the future of the event and confirmed Collision will return to Toronto in 2024. But he said he’s exploring whether the much-anticipated event should stay in the city any longer.
Tech publication BetaKit first reported that Collision was seeking a three-year deal to stay in Toronto, stating that the conference’s organizers wanted funding similar to their Web Summit in Portugal, another big event for the industry.
Mr. Cosgrave would not confirm or deny how much money he is requesting from Canadian government officials. Neither would he name which cities he has been talking with. But in an interview, he made one thing clear: After a period of hiatus during the pandemic, tech conferences are facing a reckoning of their own.
“Tech has gone through a massive cooling-off period over the last year or so – you had the implosion of crypto, you had the fast slowdown in the amount of venture capital being deployed,” he said. “As a consequence, perhaps smaller domestic tech conferences are suffering a bit. … But the bigger ones, like Collision, are still being attended very largely. And I think it’ll stay that way.”