Conexus Venture Capital makes first Fund II investment into parking software startup Offstreet

Saskatoon and Regina-based Conexus Venture Capital (CVC) has re-entered the province’s venture capital (VC) scene with an investment into Offstreet’s $2.4-million seed round, its first capital deployment in just under two years.

“We don’t have [Big Tech] here, so you can find super talented people. This gives us an unfair advantage in attracting talent.”
Matt Fahlman
Offstreet

This marks the VC firm’s first investment through its $30-million target Fund II, which held its first close last May and focuses on early-stage Saskatchewan-based tech startups. Conexus Credit Union, of which CVC is a venture offshoot, is the fund’s first limited partner.

CVC told BetaKit that it had a “very successful second close” since then but declined to say how much additional capital had been raised. Fund II is slated to hold its final close later this year, the firm said.

The deal marks the Regina-based parking management software startup’s second round of seed financing. Offstreet closed a $1.2-million seed round in 2023, led by an undisclosed group of investors. The new all-equity, all-primary round brings its total funding raised to just under $4 million.

Founded in 2016 by University of Regina graduates Matt Fahlman and Kyle Smyth, Offstreet makes licence plate-based parking validation software. The service allows parking managers to manage paid parking exemptions at ungated lots and garages, while drivers can use an app to validate their parking spots.

The software solution eliminates headaches for parking managers when dealing with employees or guests who shouldn’t have to pay for parking spots, the startup says.

Some of Offstreet’s clients include large universities, healthcare centres, and parking lot managers like Indigo, Parkwell, and Impark.

Offstreet said the funds will be used to accelerate product development, expand market reach, and add 10 to 15 new hires to their current team of 25 employees. The startup’s main goal is to land more major US universities as clients by addressing more of their parking management needs. It already counts San Jose State University and the University of Miami as users.

Fahlman, Offstreet’s CEO, wrote in an email to BetaKit that “all fundraising processes are challenging to some extent,” but that theirs was “pretty straightforward” given the startup’s long-standing relationship with the CVC team.

However, Offstreet’s successful fundraising is a rarity given the low levels of VC investment in Saskatchewan throughout 2024.

Saskatchewan saw relatively low VC fundraising activity last year, with only $3 million invested in Saskatchewan-based companies across six deals for the first three quarters of 2024, according to a report from the Canadian Venture Capital Association. Though it mirrored a wider trend in Canada, Saskatchewan’s deal value represented only 0.046 percent of all VC funding in the country during the same period, beating only Manitoba and Prince Edward Island.

CVC managing director Jordan McFarlen said that the lack of capital is the main issue, rather than a lack of high-quality deal opportunities. He added that CVC’s Fund II, along with its ability to bring in other investors, will play a key role in boosting deal activity in Saskatchewan.

“The [Sask.] startup ecosystem is immature, specifically in Regina,” Fahlman told BetaKit. “There’s not a ton of people you can reach out to for guidance. Most of my mentors are from out of province.”

But for Fahlman, the flipside of the region’s immaturity means that startups can scoop up high-quality talent. Employment in Saskatchewan’s tech sector more than doubled from 2019 to 2023, and is on track to triple by 2030, according to a report from Innovation Saskatchewan.

“We don’t have [Big Tech] here, so you can find super talented people,” Fahlman said. “This gives us an unfair advantage in attracting talent.”

Feature image courtesy Conexus Venture Capital.