Thank you so much for indulging my presentation. This is my first time at a committee like this. I did not fully appreciate the procedural aspects, so thank you for that indulgence.
I am the founder and CEO of EIO Diagnostics, a company from the west coast, on Vancouver Island. We do early detection of illnesses in the udders of dairy animals, primarily mastitis. This is a $10-billion annual production loss for the global dairy industry.
What I think is interesting about our story is that we are now coming up on our 10-month anniversary as a company. We are very well funded through the private sector and we are engaged with large and small companies across the globe, essentially, at this point.
Turning to the slides, “2017: Origins” provides a little rundown on the timeline. The reason I'm sharing the timeline is that in my experience in building and starting companies, it is not always apparent to regulatory agencies where the actual challenges are in bootstrapping from nothing to an idea that generates jobs and exports.
Our story started in August with a proof of concept that was literally built on my kitchen table. The founders paid for that out of our own pockets, which is normal. Within one week of sharing a 90-second video of that proof of concept, we received an investment offer from an investment fund in the city of New York that specializes in food and ag tech. As part of that deal, they had us come to New York for three and a half months where, in addition to the investment, they opened up their network—particularly in CPG, consumer packaged goods, basically anything you buy in a grocery store that's not in the produce section—and introduced us to a whole series of investors in this space. That program was called Food-X.
At this point we still had no product and no revenue. It was just a proof of concept. In October we started our first commercial test at a dairy close to us on Vancouver Island, Balme Ayr Farm. At that point the Ministry of Agriculture in B.C. was kind enough to give us an innovation grant in the amount of $70,000.
I'm being particular about the numbers because it's important to the story. That $70,000—and we'll come back to this later—which is such a small amount in the big scheme of things, is the amount that kept EIO a Canadian company at that point. At that point we were already receiving additional investment offers from the U.S. The New York City Economic Development Corporation offered our entire founding team residency visas to move the company to New York. We received a long list of offers that we were able to push back on because we had a little bit of runway from our provincial government.
In November and December we made additional technological progress, and in December we had our coming-out party at a large event in New York, in Manhattan, hosted by Food-X. From there we developed all the relationships that we needed to get the company to the next level.
On the next slide there are some photos. The photo on the upper left shows our device in action at Gracemar Farms, a large dairy operation in the Fraser Valley.
We've also extended and are now working in Africa. In one of the images I am teaching a class to Namibian veterinary students, which I think is really funny because I just have a bachelor's degree and I'm not supposed to be teaching a university class anywhere.
As illustrated at the upper right, we were part of a survey to determine, as part of the social policy development in Namibia, how many of their dairy and meat goats are getting sick. Our tool is very portable, very inexpensive, and it goes out into the field. What isn't shown in that image is that shortly afterwards we ended up with heat stroke and dehydration. The whole thing was just a fantastic story that is too long to share in its entirety here.
At the bottom right is a photo of us in Kenya. The young woman holding the device is a veterinarian, recently graduated. After I showed her how this device is used to detect illnesses in animals, she immediately took it out of my hands and would not give it back at the end of the day unless we promised to come back. We are, in fact, going back in September, funded by both NGOs and by large and small producers in Kenya.
In 2018 the company has continued to grow. In Q2 we closed a substantial seed round.
Again I want to point out that we still did not actually have a product at this point. This was still more hope than reality. That is important, because every single one of our investment dollars was from the U.S. In our experience, Canadian private sector investors tend to be fairly risk-averse, while our international colleagues are risk-seeking.
At this point as well, we received our first federal assistance through NRC's IRAP, which is an absolutely fantastic program. We love this program. It, Mitacs, and a couple of the NSERC ones are fantastic. I cannot speak highly enough of them, and we are very grateful for that support. The IRAP support was instrumental to us while we were raising money to be able to push back and say yes, we will take your money, but no, we are not moving to Silicon Valley.
Later this year we will be actually at revenue and selling a product, but we have ongoing pilots with companies as large as Cargill, which is just a behemoth, down to individual farms in the western United States, which tend to be a little bit larger than Canadian farms.
In the next slide, at this point we are engaged on four separate continents, which is pretty amazing, because we're eight people at this point. Even that is kind of amazing, because in January we were two people, essentially unpaid. We were a start-up. We're in agriculture, but we're a tech start-up. Now we have eight people. Average salaries are basically six figures, so we are creating jobs and we are creating value. Investment dollars are flowing from the U.S. to our company and being spent in Canada. This is a good story.
We were lucky. It's not my first company, so I knew where some of the challenges would be. The next slide, with the big red box, indicates where a lot of other companies run into trouble. The real challenge for starting a business here is in that initial stage, in that $500 to $100,000 kind of investment. Most federal support and provincial support comes much later in the process, and by that point companies are already engaged overseas or in the U.S. and many of them have already moved.
The four pillars of being able to foster young companies are capital, talent, advisory services, and markets.
We're really good at the talent part. We produce many high-quality graduates in all the STEM fields. We're not very good at the capital side. It comes from the relatively risk-averse nature of Canadian investors, so most capital comes from outside the country. On markets, we're an exporting nation, so it's kind of built into our fabric to seek outside—
