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September 05, 2021: Relatively light Canadian innovation public markets funding ahead of a short week, but high expectations for the fall
While this past week was relatively quiet in Canadian public markets, EMERGE Commerce (ECOM-TSXV) announced a $24 million acquisition funded with cash on hand. Consensus expectations call for a busy fall, with regards to “risk-on” driving public capital markets activity in Canada. Private Canadian VC backed companies announced a couple hundred million dollars of funding last week, which appears to be lower than the past few weeks. In the USA, despite lower SPAC activity leading to fewer IPOS in Q2 2021, more companies continue on the path to being public. Last week, Allbirds, Reddit, Samsara, Binance, and NordicTrack were amongst companies that announced plans to go public. Intuit could be in talks to buy Mailchimp for more than US$10 billion, and Robinhood’s stock fell after Securities and Exchange Commission Chairman Gary Gensler told Barron’s that banning the controversial practice of payment for order flow is “on the table” and PayPal is exploring a stock-trading service for US customers amid a boom in retail investing, CNBC first reported Monday.
August 29, 202: Over $600 million of Canadian innovation funding announced last week, not a bad week for the seasonally slow last week of August
Last week, we saw an upsize raise announcement from Converge Technology Solutions Corp. (CTS-TSX), raising $225 million, before its greenshoe option. Private innovation companies announced financings of around $400 million. Shopify’s (SHOP-NYSE, SHOP-TSX) integration with Tik Tok garnered widespread attention. In the ecommerce space, on Friday afternoon, Affirm shares soared on news of an Amazon partnership for buy now, pay later. Recall, Affirm also partners with Shopify, which also had a stake in the in Affirm at the time of Affirm’s IPO. In August, Square jumped into the space with a US$29 billion deal to buy Australian fintech Afterpay. The week also saw announcements pertaining to public market entrances by Rivian, drawing a response from Elon Musk. As well as news of Warby Parker, Toast, Virgin Orbit, and Forbes going public.
August 22, 2021: Decent Canadian M&A and VC funding week
We witnessed a decent level of Canadian public company M&A last week, with over $300 million of transactions in the past week. Recall, Sophic Capital has previously suggested that M&A could be a positive catalyst for small to mid cap innovation companies in the fall. At the same time, private companies saw over $300 million of VC funding as well. GlobalFoundries Inc has filed confidentially with U.S regulators for an initial public offering (IPO) in New York that could value the chipmaker at around US$25 billion, we could see an allocation of capital to hard tech, such as semiconductors, owing to recent geopolitical tensions, according to some industry watchers. Tencent warned on its second-quarter earnings call that China’s regulatory crackdown on internet companies will continue, as Asian tech stocks stumbled again after a series of volatile weeks. Topps trading cards terminated its SPAC merger and Michael Burry, of the Big Short fame, unveiled a new short bet against Cathie’s Wood’s innovation ETF.
August 15, 2021: Healthy capital markets activity all around this week
Last week saw a major financing by Lightspeed (LSPD-NYSE, LSPD-TSX), raising almost a billion dollars in equity. In addition, in Canada, Freshbooks attained unicorn status. In the USA, car sharing platform Turo has filed confidentially for an IPO. Neobank Chime raised US$750 million at a US$25 billion valuation, the company was valued at US$14.5 billion last fall. Brazilian digital bank Nubank, which has a multimillion-dollar investment from legendary investor Warren Buffett’s company, is planning an initial public offering of more than US$2 billion in the US stock market, according to a Bloomberg report. The regulatory overhang on China tech investments continues, with SoftBank Group CEO Masayoshi Son saying his company will take a wait-and-see approach with new investments in China. CATL, the Chinese lithium battery giant that counts Tesla and other electric vehicle makers as its customers, plans to raise as much as US$9 billion in a private share placement to expand its battery production. In the gaming space, Entain will acquire esports platform Unikrn for £50 million, which we believe could represent a lower valuation from the company’s private valuation. While Golden Nugget spiked 55% after DraftKings agrees to buy it for US$1.56 billion.