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Conexus hoping to feed "starving" Sask. tech start-ups with capital and resources

Cultivator and Conexus Ventures are hoping to provide capital and an incubator for tech companies in the province

Saskatchewan has a burgeoning tech start-up community.

That fact is remarkable considering how under-capitalized it is.

Less than 0.5 per cent of the all of the venture capital in Canada flowed into Saskatchewan's start-ups in 2017. Yet, success stories like Skip The Dishes out of Prince Albert, 7shifts Scheduling and Vendasta in Saskatoon show what is possible.

"That blew my mind. When you look at the successes that have already come out of Saskatchewan, like Skip The Dishes, like GasBuddy, like iQmetrix, and then the next wave like 7Shifts, Coconut Software and Vendasta and there are a few other formidable companies that are really moving," said Sean O'Connor, venture capital fund manager for Conexus Ventures. "We've got exceptional companies forming out of a completely starved ecosystem. For us to close part of that start-up funding gap... I'm excited to see what this ecosystem looks like when we start to feed it with an appropriate amount of capital."

O'Connor spoke Wednesday at the Cultivate SK Roadshow at The Hive. The event was hosted by Cultivator, Conexus Credit Union's new tech start-up incubator, which is also Canada's first Credit Union-led business incubator.

"The real focus is to grow, launch and scale innovative tech or tech-enabled companies here in Saskatchewan," Jordan McFarlen, business incubator manager with Cultivator. "We think there's a lot of innovative thinkers and innovative opportunities in the province, outside of Regina and Saskatoon."

Cultivator has 10 start-ups in their beta cohort for their Grow program including Krugo, whose CEO Kirk Morrison is from Moose Jaw. The Grow program is for companies that have launched, have a working product and users, but are under a $1 million in revenue and are still looking to grow. Cultivator will also have their Start program for companies that are in the idea stage, need more support to get launched or who have just launched.

"The big thing for us is to help connect the companies to one another, to mentor, to support providers, to provide space and the workshops and the coaching needed to take it to the next level," McFarlen said. "That's really where the incubator and accelerator model helps is getting in the weeds with companies to make sure they're fully supported to build a strong relationship there."

Joel Pinel, owner of WOW Factor Media and co-founder of SezzWho in Moose Jaw, found that  connecting with Co.Labs, a tech incubator in Saskatoon, was invaluable in getting them on the right track.

"The first couple of years we fumbled our way through it because it's not like any normal business," Pinel said of the early days of SezzWho and navigating the tech world. "I've been in business as a young kid and grew up in a family business and I went to school for business and at the same time I knew nothing about what I was doing.

"We probably could have saved two years of development if there were programs like Cultivator. What happened with us is that we got involved with Co.Labs and within the first week of being with Co.Labs they set us in the proper direction. Starting a tech business is nothing like anything else. The book of business can go out the window. When the whole world is your competition it's a different ball game."

Pinel noted that one of the nice things about the tech world is that everyone generally helps each other and are willing to share information even if they are in competition. 

"Connecting the tech community is huge because everyone has good ideas and everyone is there to help each other out," Pinel said.

SezzWho added three full-time software developers who are creating proprietary machine-learning software to start predicting customer patterns.

"Without being involved in these programs, we might not have known that that was even possible," Pinel said. 

What might be possible for the tech and start-up industry in Saskatchewan remains to be seen, but Conexus Ventures has a $30 million fund to invest in the province and see what can grow with some capital and the support of Cultivator.

"Not only can great start-up entrepreneurs come from anywhere, but great start-ups can be located anywhere in Saskatchewan with the way things are built these days. I'm excited to see what that looks like," O'Connor said. 

O'Connor got his start in the Vancouver start-up ecosystem.

"Three of the strongest entrepreneurs in the city didn't come from Vancouver itself and I think we'll see a lot of that in Saskatchewan as well," he said.

Markus Frind is from Hudson's Hope, B.C., and he started the biggest dating website in the world, Plenty of Fish, which sold for $750 million. Stewart Butterfield began his life in a log cabin without running water in Lund, B.C. and went on to help found Slack which now has a valuation above $7 billion. Ryan Holmes, the CO and founder of HootSuite, grew up outside of Vernon. His family was so far off the grid that as a kid Holmes had to start up his computer using his mom's car battery and he used to get in trouble because he would run the battery down.

"It's amazing and shows that entrepreneurs can come from anywhere. We're seeing that in Saskatchewan right now. We have great entrepreneurs from all over the province," O'Connor said, citing Josh and Chris Simair who are from Prince Albert and founded Skip The Dishes in 2012 and sold it to Just Eat in 2016 for $200 million.

O'Connor noted that Conexus has always supported Saskatchewan entrepreneurs and small business and even though it's a new era for industry, some of the same attributes that have made the province stand-out continue to be strengths in the tech world.

"Because of the lack of capital there's just this Saskatchewan mentality as an entrepreneur, a fix-it-with-duct-tape mentality, that I find is really valuable as a founder. You need to have people who can just solve any problem that comes their way and I think Saskatchewan entrepreneurs have that in spades," O'Connor said. "I think that's an area a lot of Vancouver entrepreneurs lack, they don't necessarily have that roll-up-your-sleeves attitude for a lot of those early-stage problems."

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