Made in Canada: How Novarc navigates market uncertainty

The BC-based welding cobot company relies on key partnerships to chart a steady course.

In this series, we explore how Canadian businesses are contending with global trade disruption.

Vancouver’s Novarc Technologies owes its existence to creative problem solving. In 2013, Reza Abdollahi, an engineer with three decades of robotics experience, had a client working in heavy industry who was searching for a safer way to tackle a tricky element of a pipe-welding project. Abdollahi connected with Soroush Karimzadeh, an expert in industrial automation. The two devised what became Novarc’s first collaborative robot, or cobot — and subsequently co-founded the company. While industrial robots had been used in welding since the 1960s, the technology had seen few novel iterations, notes Karimzadeh, Novarc’s CEO. Over the past 12 years, he and his colleagues have continued to explore different applications, most recently incorporating computer vision to create an AI-enhanced system that expands the autonomous capabilities of a range of robots.

That combo of collaboration, responsive agility and shrewd market foresight is key to the venture’s growth. Novarc recently announced two major milestones: the successful closing of a $71.6 million Series B funding round led by Export Development Canada, which will help accelerate the commercialization of its tech, and a strategic partnership with Miller Electric, an American manufacturer of arc welding equipment, through which the two companies will combine their tech for more advanced autonomous welding products. This move seems especially savvy in the current economic climate, as it will allow Novarc to access U.S. market opportunities that might otherwise have been out of reach.

As Karimzadeh explains, Novarc “always likes to take a very practical approach.” Here, he shares more insights about how the company is maintaining a steady course through turbulent times.

Soroush Karimzadeh, Novarc’s co-founder and CEO.

How can Novarc’s tech help welders out in the field?

First off, there’s a big shortage of human welders — you’ll see a version of this happening in every market. It’s not because we haven’t spent enough time recruiting or training new welders. Demand for welding is outstripping the supply, and the new generations are not necessarily interested in starting careers in welding. So, with our NovEye tech, instead of holding a torch by hand and relying on their own brain and reactions, a human welder could direct the AI-enabled cobots to start the weld and after that, if there are variations in the process, the system can use its perception and react in real time. This addresses the shortage issue by increasing the productivity of human welders — the process will not be as taxing, and in some cases, the tech helps automate industrial robots that could not address an application before.

I’d imagine the tariffs on steel and aluminum have ramifications for your customer base — and perhaps for Novarc, too. Have you observed any dramatic shifts so far?

We haven’t seen it yet. I think the price correction hasn’t quite been reflected in the market, given that a lot of customers have some inventory. But we expect a general increase in prices, whether it’s going to be from the U.S. or from global inflation or local inflation — it has yet to be determined. We’re closely monitoring the situation for sure.

Does your partnership with Miller Electric offer a solid American base to work from as you navigate this uncertain trade landscape?

Absolutely. The distinction would be between our historical business unit, which is our full-solution robots, and the new one, which is NovAI. With the full-solution robots, we do have a strong presence in the U.S. market, with our own direct sales and marketing force. With NovAI, it’s targeted at a much bigger total addressable market, with a lot of new segments we’re not currently in. We’re taking an indirect approach with NovAI on cobots, where we can leverage Miller Electric’s market presence and their channels to reach customers. It’s the same geography, but a different go-to-market strategy for the two different product lines.

Given that the U.S. has been a primary trade partner for so long, many Canadian businesses have had to reassess their key markets as they factor tariffs into pre-existing plans. In this climate, how important will market diversification be for Novarc?

We started our geographic expansion efforts back in 2019, but the rubber hit the road in 2022 when we started our active expansion into Australia and the Southeast Asian market as well as the European market. With this current phase, we’re planning to accelerate those expansion efforts to diversify our revenue streams. Obviously, the U.S. remains a very attractive market, and we definitely want to be able to play in that market and cater to the needs of our U.S. customers. For any business, it’s always healthy to think globally and to have a plan for diversified revenue streams — we were just lucky that we started earlier and had already made some inroads.

Does that head start affect how you’re feeling about the economic landscape?

I’m very positive about future goals for the tech industry, whether it’s in Canada or globally. Ultimately, I think the only gains to be made will be through technology and how it can help the human race become more productive, which is directly tied to our standard of living. There are tailwinds that support what we’re doing at Novarc for many decades to come — including the shortage of human welders, the demand for welders increasing globally and a greater need for automation. Obviously, there is significant restructuring happening in the world, but that’s something we’re used to. We went through a major disruption when COVID hit, and we had to reimagine some of the things we were doing and pivot to adapt to that market. This is a similar challenge. The part that is different is the level of uncertainty, so people need to be more flexible compared to previous disruptions. But I am proud of Novarc’s resiliency. Obviously, we’ve got to stay agile, but we’re hoping we can use the skills we’ve learned to weather this storm.

Has Novarc considered any potential applications of this tech that haven’t come to fruition?

There’s a lot of work that human welders do that’s very difficult to automate, and we do get requests for those. One example is underwater applications. Another is overhead welding, especially in a confined space or at a great height. As much as people have asked us to automate these tasks, we’re more focused on where we can bring value, not necessarily what could be possible, because some possibilities might not make sense from an economic or technical standpoint.

Given that experienced welders are aging out of this industry and new hires aren’t keeping pace with demand, do you feel like technology like Novarc’s has the potential to attract more young people to the field?

I think so. There’s a big benefit to adopting these technologies. Extending seasoned welders’ careers is one thing, but now, instead of asking a new generation to hold a torch for many hours in a day, which is taxing on their bodies and exposes them to carcinogenic gases, you’re asking them to set up, operate and supervise a machine — they’re at a remove from the auto plant, from those carcinogenic gases, and they’re not as physically tired when it’s time to go home. It could transform welding from dull, dirty and dangerous to, hopefully, clean, clever and cool.

Photos courtesy of Novarc