In February, the CVCA released its annual report highlighting the amount of VC & Private Equity capital deployed across Canada. Once again, Saskatchewan was unable to obtain even half a percent of the venture capital deployed across the country. To put that in context, the region of Estrie ($14 million in VC investment) is about on par with the entire province of Saskatchewan ($16 million in VC investment).
This trend is not something new for a province that most of the Canadian startup world experiences at 30,000 ft. on trips across Canada. According to the CVCA reports, if you take the total amount invested in Saskatchewan startups in the past 4 years, the province still secured less than Halifax’s 2018 totals. This is not ideal for a province that boasts success stories like SkipTheDishes (purchased by Just Eat), Solido Design Automation (purchased by Seimens) and GasBuddy (purchased by OPIS). However, if you had been at the recent Uniting the Prairies (UP) Conference, hosted by Co.Labs, you would leave with the impression that Saskatchewan, and the entire Prairies, are quickly becoming a place where startups can thrive.
Perhaps no endorsement can show the success of UP better than that from the creator of Canada’s once-cherished Grow Conference. Debbie Landa, founder of Dealmaker Media & Grow Conference, created one of Canada’s most sought-after startup conferences, focused on bringing Silicon Valley to Canada to drive innovation.
“The UP Conference exceeded my expectations. I had no idea there would be the quality and quantity of attendees,” Landa said. “From an investor perspective, this is a very impressive group of talented founders with a strong ecosystem of talent to support it. As a former conference producer, this rivals any conference out there. I will be bringing many people with me next year.”
Jordan Dutchak, Executive Director of Co.Labs, noted the success of UP was largely driven by the passion and expertise of prairie-based entrepreneurs, including both those who have stayed to build their startups at home, along with those who have left to do great things in larger tech ecosystems.
“We designed UP for the sole purpose of being the most intimate, authentic, and value generating tech conference in Canada,” Dutchak said. “What transpired in the 36 hours we spent with one another literally United the Prairies under one roof.”
“We had expats from all three of the Prairie provinces – in some cases, those who had not been home in over a decade – that were mentoring Prairie startups building the next Jobber, Bold Commerce, Skip, and 7shifts,” he continued. “In its very first year, UP had over 650 attendees (40 percent of which were from out of province), 40-plus speakers flying into Saskatoon, 10 VC firms, and leaders from every major tech company in the Prairies.”
The confidence in Mr. Dutchak’s belief in our ecosystem is justifiable when you look at how much has changed in Saskatchewan to support startup entrepreneurs.
Over the past few years, a few key supporting stakeholders have been pushing significant initiatives to help our province’s earliest stage companies. Minister Tina Beaudry-Mellor, the provincial minister responsible for innovation, has introduced new initiatives to help Saskatchewan startups work directly with the provincial government, including two Innovation Challenges within the last year.
Innovation Saskatchewan (the central agency of the Government of Saskatchewan with responsibility for implementing Saskatchewan’s innovation priorities) recently launched the Saskatchewan Technology Startup Incentive (STSI), which provides a 45 percent non-refundable tax credit for equity investments in Saskatchewan-based startups. This bold move will drive more angel investment into the province, providing more capital to early-stage rounds companies are finalizing minimum viable product and looking for early product-market fit.
Interested investors are able to evaluate deal flow through our province’s revamped & growing Angel Network (Saskatchewan Capital Network) which is helping non-tech investor’s work with investors who understand the space to drive growth in the ecosystem. Moreover, the provinces first tech incubator, Co.Labs in Saskatoon, has already supported 72 new startups in its first 24 months, which have raised in aggregate $6 million in investment, hired 119 employees, and have combined revenues of $5.5 million. The province’s second incubator, Cultivator, was launched by Conexus Credit Union in Regina this year and has already seen 21 startups join its space. As a result of these efforts, we have a significant wave of early-stage companies that are starting to find their product-market fit and positioning themselves to scale.
Creating globally successful companies off the backs of world-class entrepreneurs is nothing new for a province that boasts the 2017 EY Entrepreneur of the Year, Murad Al-Katib, along with global players leading their verticals in the likes of oil and gas, mining, and agriculture. Once again, it will be our entrepreneurs that lead the way to drive our province forward in the Canadian startup space. Our region’s prized founder team, Brendon Sled, Rob Marsh, Josh Simair, and Dan Simair, who drove the success of SkipTheDishes, will continue to blaze the trail for Saskatchewan. They are quickly scaling their newest startup, Pivot Subscriptions, which is going to redefine the way human beings own and use furniture.
While these entrepreneurs have largely lit the flame of our province’s startup ecosystem, the torch is now being carried by dozens of founders who are rapidly scaling their respective startups. Watch the momentum of our ecosystem be carried by the likes of CIX’s 2018 “Top 20 Most Innovative Technology Companies” in Katherine Regnier’s Coconut Software, and Brendan King’s Vendasta
Many of Saskatchewan’s successful expats who chose to leave the province to build their companies are also now recognizing how the environment they grew up in is quickly changing.
Jay Parmar, founder of Picatic (acquired by Eventbrite), told me how much the ecosystem has changed since they relocated from Saskatoon to Vancouver.
“We proudly launched Picatic in Saskatoon and studied ways for how we could scale the company in our home province,” he said. “Ultimately, we decided the lack of capital, along with the gap in support service, and foundational startup ideology and literacy were going to hurt our likelihood at being successful. As a result, we concluded the best path was to relocate the company to Vancouver.
“Having kept a close eye on our home province, and most recently participating in the UP Conference, I’m confident that more companies will be able to scale their companies in Saskatoon and harness the many new ecosystem support measures.”
Michael Scissons, founder of Syncapse (acquired by LookSmart), FlashStock (acquired by Shutterstock), and Careerlist, similarly sees a province that is different from the one he left to become an entrepreneur.
“The conditions have changed a lot since I left Saskatchewan in 2006, as there’s more opportunity now than there has ever been for entrepreneurs with respect to a support ecosystem forming along with the geographical restrictions for running companies being removed,” he said. “However, there’s still gaps for Saskatchewan as a startup ecosystem. Capital for early-stage startups, executive recruitment, and making sure the current post-secondary environment can create enough jobs to fuel the growing ecosystem will all work against Saskatchewan unless there are significant measures taken.”
Scissons also told me that he is starting to those gaps close. As we sit down next year and review 2019’s CVCA report, I’m confident Saskatchewan will see a significantly higher amount of deals, total capital raised, and higher portion compared to the rest of Canada. We’ll see a Saskatchewan city make the Top 10 list for number of deals made, and the external narrative of our province is going to shift from being irrelevant in the world of startups to one that’s punching above its weight with multiple high growth companies attracting capital and talent.