Saskatchewan’s tech sector is setting records in venture capital.
Investors are seeing Saskatchewan’s potential and a healthy ecosystem of technology companies blossoming on the Prairies. As the Canadian Venture Capital & Private Equity Association’s (CVCA) 2021 Q3 report showed a record-breaking $201 million poured into Saskatchewan tech companies and startups.1
Previous figures put that achievement into perspective, when only $14 million was raised in all of 2017, $16 million in 2018, and just $15 million in 2020. Additionally, the year-to-date total of $11.8 billion invested across Canada by Q3 helped the country surpass pre-pandemic records and the highest VC investment record of $6.2 billion in 2019.2
What we’re doing
Supporting this influx has been the Saskatchewan Technology Startup Incentive (STSI), an angel investment tax credit program run by Innovation Saskatchewan. The program has generated over $40 million in private investment to date, resulting in 150 jobs created, and has increased the size of the province’s investment community, with 62 per cent of eligible investors reporting that they had never made an angel investment prior to applying.
Innovation Saskatchewan’s Saskatchewan Advantage Innovation Fund (SAIF) is also accelerating the commercialization of technological innovations through nonrepayable grants and committed $395,000 to Red Leaf Pulp to develop novel wheat straw pulping technologies. SAIF and Innovation Saskatchewan’s Agtech Growth Fund have also approved over $3.4 million in funding for 17 companies in core sectors including agriculture, energy, and mining.
The future of prairie VC looks promising as Conexus Venture Capital Inc. (CVC) announced the launch of its second VC fund Emmertech last August. Focused on agtech and agribusiness innovation, and providing proper access to early stage venture capital, Emmertech reached an initial close of $45 million and closed at $60 million on December 31, 2021.
Before Emmertech was officially launched, the fund had already teamed up with Economic Development Regina and CVC in June to launch the Agtech Accelerator.
The partnership aims at solidifying Saskatchewan as a global hub for agtech investment, commercialization, and job creation by providing world-leading agtech and foodtech companies with the mentorship, resources, programming and funding.
Also joining the Agtech Accelerator as a funding partner is Innovation Saskatchewan, with a $300,000 investment over three years and the founding partners also built agreements with the University of Saskatchewan, University of Regina, and Saskatchewan Polytechnic.
In addition to the explosion of capital last year, Saskatchewan tech giants Coconut Software, 7shifts, and sMedia all made it onto The Globe & Mail’s Report on Business list of Canada’s Top Growing Companies because of
their tremendous revenue growth over the past three years.
2021 Saskatchewan VC highlights
On March 31, Saskatoon’s Rivercity Innovations (RCI) announced the closing of a $700,000 seed round led by CVC that also saw participation from Saskatchewan’s Golden Opportunities Fund and Tribune Capital.
That same month, Brew Ninja announced the closure of its seed round, which raised $650,000. It was led by Toronto’s Maple Leaf Angels and also included Women’s Equity Lab, Capital Angel Network, York Angels, and VenturX.
Coconut Software announced it had raised $28 million in its latest round of funding in May. Following which, Vendasta participated in the largest venture capital round ever for a western Canadian information and communication technology (ICT) firm, receiving $119.5 million in financing, and smashed the previous $40 million record set by the company in 2019. The raise was led by New York-based Lugard Road Capital, joined by Nicola Wealth, the Canadian Business Growth Fund (CBGF), and a set of existing investors including Regina’s PFM Capital.
In June, seven Saskatchewan tech companies received a collective of $3.93 million in funding and loans through the Regional Development Agency PrairiesCan’s Business Scale-up and Productivity program. The following month, Prairie Robotics, a Saskatchewan-based CleanTech venture, announced the closure of its $690,000 seed round. The round, led by CVC also had participation from investors Max Schmeiser, Kerry Lumbard and Dan Cugnet.
Startup TNT’s Investment Summit made its Saskatchewan debut on Nov. 18, where early stage local tech startups from the province, Edmonton, and Calgary pitched their companies in front of live audiences and connected with entrepreneurs and angel investors during three simultaneous events.
The same-day delivery service StoreToDoor secured $125,000 in investment funding as the regional winner at the event. The other Saskatchewan finalists—Immigrate, Nanogram Pharmaceuticals, Omnee, and Tunedly—all walked away with sizable investment offers which reached a total of over $1.4 million.
What changed in 2021
Wanda Hunchak, Westcap Mgt. Ltd. vice president, says that the momentum shift in the sector has come from word getting out about the vibrant sector building in the province. “In the last five to seven years, the ecosystem has really come together and we’ve started telling our success stories,” says Hunchak. “Nothing builds more success like success.” Saskatchewan is now on the radar for outside investors and local companies are shining nationally and internationally.
What 2022 brings remains to be seen, but if 2021 is any indication for VC in Saskatchewan, sunny days are ahead.
1O’Connor, Sean. “What the CVCA Q3 Report Tells Us About the State of Saskatchewan’s Tech Ecosystem.” LinkedIn, Nov. 29, 2021. https://www.linkedin.com/pulse/what-cvca-q3-report-tells-us-statesaskatchewans-tech-sean-o-connor/
2Canadian Venture Capital and Private Equity Association. Q3-2021 – Canadian VC & PE Market Overview. Quarterly Reports, Nov. 16, 2021. https://www.cvca.ca/research-insight/market-reports/q3-2021-canadian-vc-pe-market-overview