6 Canadian Tech Companies Looking to Go IPO in 2021
Stock market has been on the rise in 2020 even despite Covid19 pandemic.Stocks like Apple, Amazon and Tesla have risen 61%, 65% and 705% respectivelyin the last year.Canadian software companies do not want to miss out on the hot stock marketand are eying to go public in the next few months.According to Globe and Mail the following 6 tech companies are going IPO inthe next few months or sometime this year 2021: Farmers Edge Inc., AuvikNetworks Inc., Vendasta Technologies Inc., Magnet Forensics Inc., ThinkificInc., Cymax Group Inc.Let’s take a look at what they do: * Farmers Edge is a global leader in digital agriculture delivering cutting-edge solutions powered by a unique combination of field-centric data, artificial intelligence, and complete integration. * Auvik Network’s cloud-based network management software keeps IT networks around the world running optimally. Own the network. * Vendasta is the leading end-to-end ecommerce platform for companies selling digital solutions to local businesses. Start for free. Get up and selling in minutes. Generate recurring revenue. * Magnet Forensics – global leader in digital investigative technology with a mission to seek justice and protect the innocent. * Thinkific makes it easy for thousands of independent experts and companies to quickly create and deliver stunning online courses on their own sites. * Cymax Group builds the tech that runs eCommerce. we function as a powerful supply chain management solution for organizations of all sizes.Canadian companies had great success launching IPOs last year in 2020.Companies like Nuvei launched at $26 USD and their share price went all theway up to $56 USD +. Companies like Dye & Durham launched at $7.50 and nowworth more than $42.With low interest rate, people have nowhere to put their money except forstock market and real estate. Both have been on the crazy rise lately.Hype or not, it is good to be a software company in Canada seeking to go IPOnow.
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—The 12 European tech startups most likely to IPO nextTech stocks around the world have been booming to all-time highs this year,driving dozens of headline-grabbing listings on the public stock markets fromLemonade to Snowflake.The exception to this trend has been across Europe, which has been in arelative initial public offering (IPO) desert. Only 16 tech companies floatedin Europe in the year to September, the lowest in more than a decade.Still, there are now some signs that the European IPO market is waking up.Late last week, Bloomberg reported that London-born Deliveroo was eyeing apublic listing for 2021. Earlier in the month, The Hut Group scored thebiggest tech listing in London since 2015.And it’s not just these two either; startups like Klarna, Allegro and HuuugeGames have also said publicly that they are planning to IPO, suggesting thereis a strong pipeline.Meanwhile, one person at the London Stock Exchange told Sifted they haven’t“seen this level of activity in two years,” particularly after a slow start to2020.The tentative return of the IPO market got us thinking about which Europeanstartups might be next to go public. The following list is speculative, butour methodology is printed at the end. If you think we’ve forgotten anyone,let us know!
Founded: 2010Sector: FintechHQ: London/EstoniaRevenue: £302m (2019-2020); 80% growthIPO hints: TransferWise stands out as one of a handful of consumer fintechsthat’s proven it can be profitable. The company also boasts being a marketleader, with global scale and a huge market left to tap. As a result, it wasthe most popular response for likely IPO candidates among the VCs interviewedfor this piece.According to Beauhurst, “it’s just a matter of time” before TransferWise hitsthe public market.
Founded: 2013Sector: CybersecurityHQ: UKRevenue: £107m (June 2018-June 2019)IPO hints: The best indicator of Darktrace’s public ambitions is that it’srecently been hunting for a bank to lead its IPO process, following news thatGoldman Sachs had turned the role down. Still, Darktrace has a big compliancequestion mark to resolve first, following the arrest of its main investor forsecurities fraud.
Founded: 2005Sector: Enterprise softwareHQ: RomaniaRevenue: $400m (2018-2019)IPO hints: UiPath has now moved to hire IPO underwriters, the biggest sign yetthat it’s looking to float next year. It’s a global leader in the softwaremarket, and according to one VC, has the advantage of there being “limitedpublic market precedent” for this sort of company (specialised in roboticprocess automation).Others to watch this in this space include Calibre.
Founded: 2010Sector: FintechHQ: UKRevenue: £85m (2018-2019)IPO hints: It’s been widely reported that WorldRemit will list before 2022,having closed its last big private round in mid-2019. Playing in a similarspace to TransferWise, the company is well-positioned to continue growing itsglobal reach. One major clue of its IPO plans is that in 2018, it appointed aCEO in Breon Corcoran, who led the merger of the world’s largest bettingcompany before joining WorldRemit.Brexit may also be another reason to push for an IPO in the near future as aUK company, according to one commentator interviewed by The Wall StreetJournal.
Founded: 2009Sector: Mobility (car-pooling)HQ: FranceRevenue: $72m (2015, estimated but unconfirmed)(The company itself does not share specific figures but reported vague detailsthat revenue grew by 71% in 2019, year-on-year. Business Insider alsocalculated annual revenues sat at around at $72m in 2015, but this has notbeen confirmed.)IPO hints: Perhaps the biggest clue that Blablacar is interested in an IPO isthat its founder hasn’t ruled out a public listing, which is saying somethingfor a French startup. France hasn’t had a rich history of successful techIPOs, so Blablacar could be taking the baton to break the curse as France’sfirst unicorn.But it’s not alone. Other mature French startups like Kayroos, Alan, Doctolib,OVH, and Klaxoon would also make good candidates for a public listing in thecoming years. The French Tech’s Next40 and KPMG’s Tech Pulse 40 have made astrong case of who may else be on the list.
Founded: 2011Sector: MobilityHQ: SpainRevenue: $104mIPO hints: As one of Spain’s two unicorns, Cabify tops the country’s list offirms potentially eyeing an IPO.Cabify also told the FT earlier this year it has bucked the trend among ride-hailing services and is now profitable. That could see it perform better onthe public market than Uber or Lyft.The company should now also be looking for some sort of capital push, havingnot raised fresh funds in two years.Still, Spanish investor and VC partner, David Miranda says an acquisition-exitis still more likely for Cabify and fellow unicorn Glovo for the time being,especially given the Covid pressures.“Undoubtedly, the most obvious path to an exit in Spain is the sale of thecompany, rather than IPO,” he tells Sifted. “Although both Glovo and Cabifymade announcements last year about a potential IPO, I think it has more to dowith their unicorn status (aren’t unicorns supposed to be open to an IPO?)than with a real project to go public.”
11. Interactive investor
Founded: 1995Sector: Fintech (trading)HQ: UKRevenue: £124.4m (2020, ARR)IPO hints: Interactive Investor is the oldest company on this list and isarguably overdue for an IPO. Its CEO hinted that it could float in 2021, andnow seems to be ramping up its ambitions to scale after acquiring a smallerplayer in February this year.One of its key investors, Augmentum, recently valued it at £675m.
Founded: 2013Sector: Health (digital GP)HQ: UKRevenue: $10m (2018, estimated)IPO hints: Babylon isn’t the most obvious IPO candidate. Firstly, it has had aquestionable year amid Covid-19. Despite the virus amplifying its use case anduser base, it has faced public criticism around its handling of data and stillhas tiny revenues compared to its valuation.Nonetheless, it is well capitalised after a mammoth $550m raise in August2019, and now valued at $2bn; making an acquisition unlikely. It is also themarket leader among doctor apps in Europe at present, having expandedinternationally.The company will also be watching the success of digital health IPOs likeLivongo’s in the US last year as a guide of market confidence in the space.As a consumer product, there could be ‘brand appeal’ for Babylon to go publicby helping boost its profile and outpace competitors.
To IPO or not to IPO?
While these companies could realistically list, they may decide to stayprivate for longer. Indeed, the general trend in tech since the late 1990s hasbeen to IPO later — driven by the abundance of capital in the private markets.For example, growth funds like Highland have allowed European companies likeKlarna to raise giant $600m+ rounds, reducing the need for public capital.There’s also been a rise in alternative exit-options. VCs like Balderton havecreated designated “liquidity funds”, which buy shares off of earlyshareholders and have delayed the need for an IPO.Indeed, these secondary share sales are gaining traction among major Europeanfirms like TransferWise and Revolut, and initiatives like Crowdcube’s “IPO-alternative” could further this.There are even companies going the other way, with Rocket Internet de-listingearlier this month.Some are critics of the whole process.“The only reason why any European fintech companies will IPO is to providetheir VC backers an exit — there is no other rational reason,” says DevinKohli, a partner at Outward VC.“All the other reasons to IPO — i) the profile of being a public company, ii)the need to raise growth equity, iii) using their stock as currency for M&Aand iv) greater regulatory scrutiny — have become increasingly irrelevant asthe European private markets have matured.”Kohli also warned going public can “stifle innovation and place undue andarguably unnecessary reporting (and regulatory) oversight for little reward.”Indeed, Flixbus swerved a planned IPO last year, while US payments giantStripe has been very vocal about the sanctuary it finds in private investors.“There has to be a reason to IPO… its got huge overheads. It’s not to be donelightly,” says Julian Rowe, general partner at Latitude.
The resurgence of the IPO
Having said that, several pundits now predict there will be an IPO boom inEurope, arguing that — rightly or wrongly — it’s still viewed a key milestonefor a successful tech company.James Clark, a former manager at the London Stock Exchange, says that recentIPOs success stories could help reignite momentum among startups.“The flurry of recent tech listings in the US, and The Hut Group in Londonwill certainly have tech companies [including those at the sub-unicorn level]looking at public markets with renewed interest,” he tells Sifted.“There’s clearly public demand for tech stocks,” with markets ever hungrierfor new investment strategies amid low-interest rates.Funding pressures brought about by Covid-19 may also speed up companies’ exitplans. This is because the main trigger for going public is often the need fora large amount of capital, says Balderton partner Suranga Chandratillake.“If you want £2bn to do something amazing and huge, the public market isreally the only option. I think in the end people who are really reallyambitious, do end up going public,” he tells Sifted, highlighting the “fintechcohort” stand out in particular.The drop in funding across private investors in recent months could also makeacquisition prices less favourable, helping restore the IPO’s appeal.European tech companies that have listed on the public markets successfullyover the last decade include Spotify, Worline, Worldpay, Teamviewer, RocketInternet, Amadeus, and Trainline.“I think there’s still a lot of [emotional] pull around the IPO amongfounders,” Balderton’s Chandratillake concludes. “Many of them will make jokesabout shaking my hand on the day of the IPO… It’s a goalpost. It’s seen as apretty iconic thing.”