REGINA, Saskatchewan–Conexus Credit Union here is reporting its Conexus Venture Capital Fund, which it launched earlier this year, has hit its $30 million fund target. The fund is aimed at bolstering early-stage investment in Saskatchewan startups.
The fund, which is led by fund manager Sean O’Connor, originally raised $22.5 million when it first launched in July. The fund is supported by $15 million from Conexus Credit Union, its largest investor, as well as five other credit unions, and around a dozen local business leaders that contributed a collective $7.5 million, according to Betakit.com.
The final $7.5 million, which brought the venture fund to its target, comes from SaskWorks Venture Fund, a Saskatchewan-based retail mutual fund that typically invests in local small-and-medium-sized businesses ($6.5 million), and a few undisclosed individuals and credit unions ($1 million), Betakit.com added.
“Conexus Venture Capital Fund’s decision to work directly with local investors, instead of acting as a conduit for investors from outside the province, was a conscious one,” according to the report.
‘Local’ Is Key Part of Strategy
O’Connor told BetaKit that sourcing investment and LPs locally was a key part of their strategy, and the fund saw investment from a number of individuals from agriculture, gas, and construction industries, for example, who would not typically invest in tech companies.
O’Connor also noted that there was an excess of interest from local investors, with the fund having to turn away $7.5 million in additional capital, Betakit.com reported. “O’Connor hinted that the fund may grow to more than $30 million as he speaks with existing investors about accepting additional capital into the fund, though nothing was finalized at time of publication,” the report added.
Betakit.com noted another reason the Conexus fund stayed local was because of the Saskatchewan Technology Startup Incentive (STSI), a provincial government tax credit meant to encourage investment in early-stage technology startups within Saskatchewan. Through the tax credit, which is running on a two-and-a-half-year pilot, investors are eligible to receive a 45% tax credit when they invest in eligible startups. O’Connor told BetaKit that about half of the investors in Conexus’ fund are likely to benefit from the tax credit.