good morning. Turbopuffer is an Ottawa startup that you might not know about unless you’re a major AI company that needs its services. The group currently includes Claude’s Anthropic. The three-year-old company is already on track to bring in $100 million in revenue, but its co-founders were initially reluctant to talk about it. But first:
first up
on the news
Energy: Alberta plans to propose a southern route for a new oil pipeline to the West Coast, government and industry officials say.
infrastructure: Premier Mark Carney and B.C. Premier David Eby said: Multi-billion dollar deals on large projects.
real estate: Condominium construction companies offer big discounts In exchange for signing an NDA.
Justine Li and Simon Eskildsen, co-founders of Turbopuffer.Photo illustration: Yannis Davey Gibinga/Globe and Mail
in focus
Fast-growing AI startups you’ve never heard of
Hello. I’m Joe Castaldo. I write about artificial intelligence for Report on Business.
I’ve been writing about technology and AI and have found that most startups are hungry for media coverage, and almost do so willingly. The Turbo Puffer is an exception.
When I first heard about this company last year, I had no idea what they were doing. The website was filled with highly technical terms rather than common marketing terms. But their customer list, especially Anthropic’s, caught my eye.
I wondered how this little-known Ottawa startup with a few dozen employees ended up with one of the world’s largest and most important AI companies as a customer.
Co-founder Simon Eskildsen, 31, had the answer, but it wasn’t so easy to pin down. He seemed much happier focusing on the company than talking about it with journalists. When we finally arranged a video call in January, he was friendly, engaging, and seemed like someone with a keen sense of autobiography. He enthusiastically told the story of leaving his native Denmark at the age of 18, working at Shopify in Ottawa, and starting Turbopuffer in 2023 with Justine Li, whom he met at the e-commerce giant.
He explained that Turbopuffer has devised a new and inexpensive way for AI systems to search for information when providing answers. Fast, efficient search is essential for AI chatbots and applications to be useful, ensuring they have relevant context to answer questions, retrieve the right documentation, assist with coding projects, and do all the things AI is doing these days. This at least explains why Anthropic would be interested.
Eskildsen and Lee met at Shopify, where they spent years working on the most difficult and critical parts of the company’s infrastructure.Photo illustration: Yannis Davey Gibinga/Globe and Mail
Still, Eskildsen wasn’t sure whether the article was worth it (his target audience is avid engineers, not Globe and Mail readers), but said he would give it some thought. My Ottawa-based colleague Sean Silkoff later met with him to hear more and see if he could convince Eskildsen. Finally, in the spring, he said it was game.
One of the reasons he opened up should say a lot about him. He wanted to focus on the International Information Olympiad, an annual elite programming competition he had participated in as a teenager. He wanted more people to know about this and for Canada to invest more in international math and science competitions for young people. “That would be very good for global GDP,” he said.
As I learned through my interviews, Turbopuffer’s reluctance to interact with the media is not the only unusual thing about him. Although the company is less than three years old, it is highly profitable and is expected to bring in more than US$100 million in revenue this year. While other startups boast of raising tens or hundreds of millions of dollars in funding, the company needs less than $1 million in external funding. And it’s not Silicon Valley.
Canada is constantly worried about the state of its technology sector and how it is losing ground in AI and talent exports. Turbopuffer provides key pieces of AI infrastructure to major enterprises, but it’s proving that things aren’t always so bleak. I’m not just bragging about it. What could be more Canadian than that?
charting
follow the money
According to Statistics Canada, the federal government experienced its largest annual decline in real GDP in April for the first time in about 30 years. Meanwhile, federal defense spending increased significantly, reflecting spending changes made by the Carney administration.
quotation
We squeezed all the juice we could out of the battery.
— Stephen Hill, Tesla Model Y and 28-foot Airstream owner
Worried about the limited range of your electric car? Meet the drivers who use EVs to transport their Airstreams and boats across the continent.
to the next
Other files we follow
defense: Canada is expected to announce about 10 founding countries for the Global Defense Bank at the NATO summit in Turkey next week.
Technology: As companies try to figure out whether they can spend a lot of cash on AI without getting much of a return, you’ll likely see a lot of “AI leveraging” jobs on job sites.
real estate: As the sector continues to struggle with weak sales and rising inventories, some developers are offering deep discounts to buyers of new condominiums on the condition they sign confidentiality clauses.
Today’s schedule: US markets are closed for Independence Day. We are looking at the Services Purchasing Managers Index for the euro area as well as Japan and China.
morning update
Global markets were mixed after yesterday’s weaker-than-expected jobs report caused investors to dial back hopes of an imminent US interest rate hike.
TSX futures pointed higher as the US stock market was closed for Independence Day.
Overseas, the pan-European STOXX 600 index rose 0.17% in morning trading. Britain’s FTSE 100 index fell 0.29%, Germany’s DAX index rose 0.25% and France’s CAC 40 index returned 0.05%.
In Asia, Japan’s Nikkei Stock Average closed 1.47% higher and Hong Kong’s Hang Seng Index closed 1.28% higher.
The Canadian dollar traded at US$70.51.
