Rampant software piracy in Hong Kong and the mainland has deterred Canadian software firms from entering the markets, according to a venture-capital firm executive. Piracy was the 'most important issue for software companies', Loudon Owen, managing partner of Toronto-based McLean Watson Capital, said. McLean Watson Capital was part of a group of Canadian technology firms which toured Hong Kong, Singapore and Taiwan recently seeking partners or investors to help them enter Asian markets. The group - five small and medium-sized companies and two venture-capital firms - met Hong Kong financiers, investors and information technology groups last week. While Canada has produced many top IT firms such as Nortel, Corel, Zi Corp and Newbridge Networks, the bulk of its home-grown companies are unknown outside North America. The delegation specialised in technology for use by other IT companies, rather than consumer-oriented products. 'We are looking for investors that can put a stake in,' Ron Walker, president of security software firm KyberPass, said. KyberPass is seeking equity investment of C$10 million (about HK$54.36 million) in the first half of this year to expand international sales. The company, which has 20 employees and revenues of $3.4 million, was 'not specifically seeking an acquisition' but would consider one if a bid was made, Mr Walker said. Indeed, many small Canadian firms with specialised technology have been bought by larger, US-based companies, such as Microsoft's acquisition of 3-D developer SoftImage in 1994. 'We don't pretend to know anything about the local markets. We're here to learn how to do business here,' Michel Vulpe, president of software tools maker Infrastructures for Information, said. Another firm, IVL Technologies, said it already was selling audio signal processing technology to karaoke firms in Japan and South Korea. 'We want to expand into Hong Kong, China and Singapore,' president Philip Scott said. 'We see the opportunity in China to be very exciting. The popularity of karaoke [there] is very high.' Although Canadians like to refer to the cities of Toronto, Ottawa and Montreal as the 'Silicon Valley of the north', the country has yet to prove itself a threat to its longer-established and better-funded US counterpart. Michael Farley, of the Canadian Department of Foreign Affairs and International Trade, said the country had valuable expertise and a lower turnover of staff than in Silicon Valley. The delegates noted that the weaker Canadian dollar gave them an edge in pricing over US-made technology. Towards the end of the Hong Kong tour, the group had signed no deals, although they remained optimistic of future developments.