Cool under pressure: U of T Happy Pops startup lands Dragons’ Den deal

Leila Keshavjee sometimes feels like the odd woman out among tech-minded University of Toronto entrepreneurs – she makes ice pops – but that didn’t stop her from landing a deal on the hit CBC show Dragons’ Den.

On last night’s season première, Keshavjee agreed to a $150,000 investment from Arlene Dickinsonin exchange for 30 per cent of her startup Happy Pops, which makes all-natural ice pops in flavours ranging from guava to pineapple coconut.

The deal, now in late-stage discussions, also includes access to Dickinson’s Calgary-based accelerator program, which specializes in packaged goods startups.

“I think the days of red, white and blue popsicles are done,” says Keshavjee, who graduated with a bachelor’s degree in kinesiology from U of T two years ago and spoke to U of T News before yesterday’s episode aired.

“All those artificial ingredients we’re feeding kids has to stop – and I’m on a mission to change that.”

Watch Happy Pops on Dragons’ Den

A long-time fan of the TV show, Keshavjee says she originally planned to be a doctor, but switched tracks in early 2016 when she came across a local ice pop business for sale. Drawing on her  kinesiology background, she figured she could make an impact by developing a frozen treat that was reasonably healthy, tasted good and could be enjoyed year-round.

Plus, it was a concept she had previously toyed with as a student.

“I would always make smoothies at home, freeze them and take them with me to class,” she says.

The ice pop catering business Keshavjee purchased was relatively small, with a 1,000-square-foot commercial kitchen, and zero retail products. Describing herself as a “go-big-or-go-home type of person,” Keshavjee set about creating an all-new ice pop portfolio – and brand – from scratch.

So what makes Happy Pops unique?

“It’s real fruit, very little organic sugar and very little water,” Keshavjee says. “Our flavours are bold and they’re not as icy as other artisanal popsicles out there.

“When you bite into our mango popsicle, which is our number one seller, you really feel like you’re biting into a mango.”

And not just any mango. Keshavjee says Happy Pop’s mangos are imported from India, where many believe the best-tasting mangos are grown. In general, she says she drew on her travels and South Asian heritage to find flavours that would be more appealing to Canada’s diverse population than the neon-coloured varieties typically found in supermarket freezers.

Of course, creating a tasty ice pop is one thing. Convincing people to buy it is another. Keshavjee spent the past few years “hustling hard” as she attempted to build Happy Pops’ brand. That included everything from catering at charity events to delivering popsicles to a gym down the street. Keshavjee even purchased a gourmet ice cream sandwich company to broaden out the product line.

Keshavjee’s drive and determination seemed to resonate with the Dragons. They were also impressed with her product and packaging.

Keshavjee credits her family’s background in the food manufacturing business – her father is a private label juice maker – for helping her spot an opportunity in a highly competitive sector. She also praises U of T’s Impact Centre accelerator, one of nine entrepreneurship hubs on campus, for helping her build her business.

“The Impact Centre was so supportive since Day One,” she says. “They were incredible.”

Keshavjee’s support network was on full display at a screening party held last night at U of T’s Innis College. Keshavjee says 200 people turned out to watch her Dragons’ Den appearance, including Impact Centre staff, friends and customers, among others.

Even so, Keshavjee says it still felt strange being the lone ice pop operation amid dozens of U of T health, artificial intelligence and sustainable technology startups. The fish-out-of-water feeling continued when she first auditioned for Dragons’ Den, one of the few pitch competitions she has entered.

“All of these people had these cool products, and some of them had patents and other things I’ve never seen before,” Keshavjee says, “and I’m like, ‘Hey, I make popsicles.’”

In the end, it hardly mattered. Keshavjee’s insecurities seemed to melt away when she rode her bicycle-powered ice pop cart onto the stage.

“I think it forced me to become more confident in my product.”


Wattpad’s secret to success? Think globally and hire locally, co-founder and U of T Engineering alumnus

Allen Lau (ElecE 9T1, ECE MASc 9T2), the co-founder and CEO of story-sharing platform Wattpad, has advice for budding Toronto entrepreneurs hoping to build a billion-dollar business: think globally and take full advantage of the city’s diversity when choosing your team.

“You have to look for global growth – and to have that global growth, you need [people with] a global perspective,” Lau recently told attendees at a Startup Canada event held at Toronto’s MaRS Discovery District.

“From day one, you have to think about how to target people from outside of Canada and the U.S.”

U of T students awarded RBC Amplify’s ‘most disruptive’ prize for AI used in monitoring e-transfers

A multidisciplinary team of students from the University of Toronto and a student from the University of Waterloo have been awarded $10,000 from Royal Bank of Canada’s (RBC) Amplify program for designing the “most disruptive” technology to monitor email money transfers.

A patent for their disruptive technology is pending and the four students have accepted roles at RBC when they graduate this spring.

The U of T Faculty of Information’s Sori Lee, the Faculty of Arts & Science’s Keros Rodrigues, the Faculty of Applied Science & Engineering’s David Wang and Waterloo’s Keira Chadwick were matched together as one of 18 teams taking part in RBC’s intensive summer innovation program.

“There are four different roles that participants in Amplify can have: developer, data scientist, UI/UX designer and business analyst. And, depending on the problem, RBC shapes the groups to fit the problem,” says Rodrigues, a fourth-year U of T computer science student at the University of Victoria College who describes the experience as an immersive, four-month long hackathon, where they got to pitch their ideas to RBC’s top executives.

As the team’s developer, Rodrigues says they were given a problem in a high-risk area for RBC: money laundering, fraud, and cybersecurity. Their research showed e-transfers had increased tenfold for RBC since they were first introduced five years ago as clients increasingly migrate to electronic forms of payment.

The problem for most banks, he says, is that the systems used to monitor these transactions aren’t moving as quickly as machine learning, a subfield of artificial intelligence (AI).

“Rule engines basically track every transaction. ‘This transaction’s okay,’ or ‘this transaction is no good, let’s flag it, and have our team investigate,’” he says. “These engines are very rule-based, so for example, if someone deposits over $10,000, it’s flagged, but that creates a lot of false positives.”

He says they interviewed many anti-money laundering and fraud investigators at RBC, and integrated that knowledge into their machine learning algorithm to help detect financial crime within e-transfers.

Another important feature was their dashboard visualization. Rodrigues says most investigations are tracked through spreadsheets, but they were able to create a system that displayed visualizations, such as graphs or tables, to communicate insight at a glance.

Lee, a second-year master’s student in user experience design at the iSchool, says her role as a UX designer was to have the end-user in mind.

“We received input and feedback from over 100 employees in the product development process. Making sure these specific user needs were met, while working closely with Dave and Keros to ensure our technical capabilities, was a challenging and rewarding process. I strongly feel that our team’s competitive edge was our diverse background.”

Wang, who studies engineering science and was the team’s data scientist, agrees the Amplify program allowed them to capitalize on their strengths and drive their vision into reality.

“Our team gelled very early on, which helped foster innovation culture. The collaborative approach we took allowed everyone to bring something unique to the table, and that helped us fundamentally understand our business challenge,” says Wang. “We created a real-world solution with enormous potential in the future.”

“It shows how machine learning can be used to boost investigations,” says Rodrigues. “If you’re able to stop crime, you’re able to help society as a whole.”

Wattpad’s secret to success? Think globally and hire locally, co-founder and U of T alumnus says

Allen Lau, the co-founder and CEO of story-sharing platform Wattpad, has advice for budding Toronto entrepreneurs hoping to build a billion-dollar business: think globally and take full advantage of the city’s diversity when choosing your team.

“You have to look for global growth – and to have that global growth, you need [people with] a global perspective,” Lau recently told attendees at a Startup Canada event held at Toronto’s MaRS Discovery District.

“From day one, you have to think about how to target people from outside of Canada and the U.S.”

It’s a credo the University of Toronto alumnus credited for taking Wattpad, first launched in 2006 with co-founder Ivan Yuen, from a poky e-reader app on the Motorola Razr flip phone to a fast-growing, story-sharing platform with more than 65 million users. Earlier this year, Wattpad raised US$51 million in a financing round led by Chinese Internet giant Tencent Holdings. The deal valued Wattpad at about US$400 million.

To illustrate his point about the value of a global outlook for early-stage startups, Lau reached back to Wattpad’s earliest days when he and Yuen were struggling to source content and build an audience. Their solution was to import 17,000 books in the public domain – classics by authors like Jane Austen or Charles Dickens. But they also took the seemingly unusual step, for a North American startup at least, of simultaneously importing titles in French, German and several other languages.

Lau called it a “hack” because it made Wattpad look like it supported multiple languages even though it didn’t. “The product was exactly the same if you clicked on ‘German’ because we had no budget to localize for Germany or to internationalize,” he said. “But it gave users a very good first experience.”

It also meant Wattpad’s user base, albeit tiny, was technically global in scope – a feature that would later boost the company’s growth following the introduction of the iPhone and the mobile Internet. Case in point: One of the first breakout authors on the platform wrote in both English and Tagalog. “That hack we did early on started to really work because, without that support, the content would not have been discovered,” Lau said.

In the years that followed, Wattpad continued to expand support for other languages and convinced Canadian literary icon Margaret Atwood to share stories and poems on the platform. The move allowed Wattpad to ride on the coattails of Atwood’s international reputation, generating coverage in foreign newspapers like the Guardian and Washington Post.

The startup’s first big breakthrough came in 2014 when 25-year-old Anna Todd amassed a huge following on Wattpad for her One Direction-inspired fanfiction series After, which drew more than 1.5 billion readers. It was later published and became a bestseller in the U.S. and overseas.

“That was one of the first truly global stories,” Lau said. “Even though it was written in English, it started to take off in Germany, France, Mexico and Indonesia.”

In 2015, Lau and the Wattpad team again turned their attention overseas for their first experiment in transforming Wattpad’s popular content, complete with data about the users who read and shared it, into a successful, 200-episode TV series for an Indonesian television broadcaster.

Fast-forward to today and Wattpad now boasts partnerships with broadcasters and streaming companies in North America, Asia and Europe. Netflix, for example, has made an original teen romantic comedy that’s based on The Kissing Booth, which was first published on Wattpad in 2011 by 15-year-old U.K. author Beth Reekles.

Why are studios so interested? In effect, Wattpad serves as a hyper-granular focus group where users’ feedback, often chapter by chapter, offers insights into which characters and plots are likely to resonate with audiences, although not necessarily with critics. The Kissing Booth, for example, is one of the most popular streamed movies in the U.S. even though it has been almost uniformly panned by reviewers, as evidenced by its 13 per cent rating on the Rotten Tomatoes website.

Yet, despite its growing ties to Hollywood and Silicon Valley, Wattpad has resisted the urge to relocate south of the border. Lau said Toronto’s diversity – more than half of Toronto residents identify as visible minorities – has given Wattpad a distinct advantage when it comes to building a company with a truly international outlook.

“Your team has to be equipped to think globally and understand all those cultural nuances,” he said, adding roughly half of Wattpad’s employees are visible minorities, about half are bilingual and half are women.

“You and I speak English, but Google will tell you there are only 350 million native English speakers – not even five per cent of the world’s population. If you don’t think about that global perspective, internationalization and the cultural nuances of different countries, you’re missing out on 95 per cent of the opportunity.”

Litigation gone digital: Ottawa experiments with artificial intelligence in tax cases

The Justice Department has quietly launched an artificial intelligence experiment as the Trudeau government prepares to use such sophisticated software to help make decisions in cases involving immigration, pension benefits and taxes.

The 18-month pilot project, which involves the Canada Revenue Agency, was started even though the government has yet to establish clear ethical guidelines on its use of artificial intelligence, or AI.

Definitions of AI vary, but it’s generally understood as a computer system designed to quickly learn, reason and make decisions by imitating human cognition.

Since January, 26 tax practitioners at Justice Canada have been using commercial AI software that analyzes thousands of court cases to predict how judges might rule on a given set of facts about a taxpayer’s affairs.

“There is currently no legislation, regulations, policy position or framework within the Government of Canada to govern the use of AI in Canada,” says a May 2018 briefing note, obtained by CBC News under the Access to Information Act.

“There is a need to engage stakeholders to look at this uncharted territory with a critical reflection on challenges and new legal, ethical and policy issues.”

Policy vacuum

Even in this policy vacuum, the Justice Department wants to be “on the leading edge and part of the critical discussions surrounding how to leverage new technology as a department and as a government,” says the briefing note.

The pilot project uses the software program Tax Foresight, developed last year by Toronto-based tech startup Blue J Legal Inc.

The company, founded by legal experts at the University of Toronto, claims that the program predicts tax-litigation outcomes with an accuracy rate of 90 per cent.

The Department of Justice, which has paid Blue J Legal more than $20,000 for licences, went ahead with the pilot after its AI Task Force recommended an off-the-shelf product for the exercise, said spokesman Ian McLeod.

The department did not provide details about how Tax Foresight will be used, except to say that it will not supplant human employees. “This technology is meant to assist government employees in their work, not replace them,” said McLeod.

I think there’s a lot of hype around AI– Fenwick McKelvey, assistant professor of communications, Concordia University, Montreal

Justice Canada also is looking at whether to launch two other pilots. One pilot under consideration would be launched at Immigration, Refugee and Citizenship Canada (IRCC) to help develop “litigation strategies,” says a notice to industry sent earlier this year asking for information.

The other proposed pilot, with Employment and Social Development Canada (ESDC), would be used in litigation and research involving compensation for federal government employees. Eventually, AI could be expanded to work on litigation involving the Canada Pension Plan, Old Age Security and Employment Insurance cases, says the notice.

Justice Canada is still reviewing industry feedback for the IRCC and ESDC proposals, and has not made any decisions, McLeod said.

Through the Treasury Board, the Trudeau government has been ramping up efforts to use more artificial intelligence programs across departments. Those efforts are being quarterbacked by Alex Benay, who was appointed Canada’s chief information officer in April 2017.

Alex Benay, Canada’s chief information officer, is quarterbacking an effort to use more artificial intelligence in federal government operations. (CBC)

Treasury Board has been circulating a white paper suggesting seven principles for using artificial intelligence, including a proposal that AI software should be “trained” in ethics and human-rights obligations.

The document also says AI “should be deployed in the most transparent manner possible,” and that “people should always be governed — and perceived to be governed — by people.”

Critics and skeptics of AI have warned that the technology can be problematic, especially when it’s used in policing and justice-related applications. Underlying crime data used by the software, for example, may be racially biased — which could drive litigation decisions that reflect racist attitudes.

“I think there’s a lot of hype around AI,” Fenwick McKelvey, an assistant professor of communications at Concordia University in Montreal, said in an interview. “It raises a lot of concerns where the rubber hits the road.

“If it’s for tax cases, I think there’s room for manoeuvre. But I think that it’s important to be sensitive to some of the downsides of AI in justice and law enforcement, given the risks.”

AI and human rights

McKelvey said government must ensure any use of AI does not violate the Charter of Rights and Freedoms or the Privacy Act, and operation of the software must be subject to external audit.

Fabio Bonanno, a tax expert with Trowbridge Professional Corp. in Toronto, began using the Tax Foresight software this year as a time-saving tool to research large numbers of court cases.

He said the firm’s advice to clients remains in the hands of human professionals, not in the software, and he welcomed the news that Justice Canada is using the same Blue J Legal software.

“Hopefully, it will reduce any sort of disputes,” Bonanno said in an interview. “On their end, there are employees in the Department of Justice that are going to be doing the same thing as me.”

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Toronto startup Second Closet aims to ‘Uber-ize’ self-storage

Mark Ang was 17 years old when he and his older brother, David, moved out of their parents’ home. The brothers piled into a small, 500-square-foot apartment, with David working full-time to cover their rent and claiming the only bedroom. Mark, a student at the University of Toronto, was deputed to sleep on the couch.

“That was my desk, that was my office, that was everything for the next little while,” said Mark, who is now 22 years old. His old bedroom furniture had to go somewhere, but he was faced with steep prices to put it into storage, leading the brothers to muse that there had to be a better solution.

David Ang, left, and Mark Ang, founders of Second Closet.

A few years later, the brothers started tinkering with business concepts, and as Mark finished university last spring, they formally launched their storage company, Second Closet. The company’s tech-driven storage solution operates on a model where users pay only for the space that their belongings take up, rather than paying a fixed price for a storage locker that may not wind up full.

The company arrives to pick everything up, and delivers it back when the customer has space for it again. Everything is arranged with a few clicks on a smartphone or a laptop; the costs range from $3 a month to store a small box to $36 a month for a three-seat couch.

The customers’ items are taken to two leased storage sites – one in Toronto at Allen Road and Sheppard Avenue, the other in Mississauga near Pearson International Airport.

Second Closet’s Toronto-based team has grown over its 15 months in existence, from the two brothers with an idea to 35 full-time employees. The staff include drivers and movers as well as engineers, salespeople and customer experience representatives.

According to Michael Hyatt – founder of the software company BlueCat Networks Inc., Second Closet’s first investor and the young brothers’ business mentor – Second Closet has effectively “Uber-ized” storage.

“They’re walking into [the storage industry] and saying, ‘Hey, I’m going to take technology, make it way more efficient and better,’ ” Mr. Hyatt said. “And I love that idea, because the demand for their business is huge.” Space is a premium commodity, he added – particularly in the dense urban environment of Toronto where the company has started out.

Mr. Hyatt first learned about the brothers’ project through a chance encounter with them in the tech hub MaRS Discovery District in April last year, the same month that Second Closet launched.

By May, however, Mark was craving stability and had resolved to take a job with a consulting firm. The day before he was slated to begin, Mr. Hyatt posed a question over coffee. What would the brothers need to make a real go of this Second Closet idea, and for Mark to abandon the consulting job? They’d need half a million dollars, Mark answered.

So Mr. Hyatt made some calls. By the end of that day, all $500,000 was locked down from investors including Mr. Hyatt, his brother Richard, Generation Capital’s Geoff Beattie and Colliers’ Mike Cowie. The Angs reminded Mr. Hyatt of Richard and himself, Mr. Hyatt said, “when we were young and super keen and overly anxious to build something.”

In June, Second Closet raised an additional $2-million, led by the family-run investment company MIG Group.

Mark estimates Second Closet has worked with about 3,000 customers in the Greater Toronto Area so far, accruing monthly revenue in the lower hundreds of thousands. The company is set to expand to Vancouver at the beginning of 2019, and long-term, they’ve set their sights on New York, Boston, Miami, Los Angeles and San Francisco.

Ty Shattuck, chief executive of McMaster University’s Innovation Park, sees potential in Second Closet’s business concept. “They’ve definitely hit a vein in terms of a need,” he said, adding that scaling will be their next hurdle to surpass. “My one concern is, there’s lots of people in the storage or the temporary storage area. How easy would it be for someone with a big brand and deep pockets to simply replicate what they’re doing?”

While Mark doesn’t see similar competition popping up yet in Canada besides traditional self-storage outfits, a U.S.-based company called Clutter does have a business model akin to Second Closet’s. But with success comes competition, Mr. Shattuck said. If bigger companies can design and implement similar technology, the true test of Second Closet’s business chops will be whether they can stand out.

“Their viability, frankly, is about how fast they can move to create a brand,” Mr. Shattuck said. “The trick is to move fast enough before a big boy decides to come eat your lunch – or, frankly, eat you.”