Sophic Capital Weekly Cache
Please see what we’ve been reading in technology and ESG related investing this week. Please feel free to send us what you’ve found interesting.
We had a busy week in Canadian capital markets, marked by fundraising in public and private markets, as well as M&A activity. Public markets interest seems focused on the crypto, healthcare tech, esports/sports betting and ESG sectors. In the USA, high profile SaaS companies issued converts & bonds. High profile IPOs performed well, with the Visa-Plaid acquisition called off, with some speculating the company could choose to go public in an enthusiastic public market.
2021 is off to a busy start in Canadian capital markets, with regards to public equity offerings, private financings and M&A. Specifically, in the small-medium cap space, Emerge Commerce & Converge appear to be executing very rapidly on their M&A plan. We’re looking forward to additional details for mobile sports betting in New York, which bodes well for theScore and eventually Sophic Client, Luckbox. In the USA, we’re also excited to watch the potential public market debut of Roblox, Affirm, Bakkt and SoFi, among others.
We wish you and your family a happy, healthy and prosperous 2021. Canadian capital markets were relatively quiet this past holiday week, following a busier than usual December, we expect activity to pick up in January, with a focus on technology, which appears to have more robust activity in the past few months. As expected, heightened activity also benefited global investment banking, according to Refinitiv. In the near term, we expect headlines pertaining to NYSE – China telco delisting and Bitcoin momentum to dominate.
Thank you for your support through 2020, we hope you and your loved ones are enjoying a restful holiday season. Canadian fundraising activity understandably slowed this past week, M&A activity remained robust. As Bitcoin enjoys a revival these past few weeks, we would expect to see heightened capital markets activity in 2021. In the USA, most of the news in the past week focused on SPACs. We would also keep an eye out for the Securities and Exchange Commission’s approval of the NYSE’s “direct” listing plan, which could allow companies to raise capital in direct listings.
This past week, we saw multiple successful Canadian tech company public market debuts, including Sophic Client Luckbox (LUCK-TXSV), Emerge Commerce (ECOM-TSXV) and WeCommerce (WE-TSXV). While in the USA, ContextLogic (WISH-NASDAQ) was down 16% on its IPO. That said, recent tech IPOs and strong tech stock performance has left experts scratching their heads and led to the introduction of new structured products. At the same time, the potential IPO, SPAC list continues to grow, with listings expected by Poshmark, Bumble, UiPath, Coinbase, Playtika, Tokopedia, indie Semiconductor.
While Canadian capital markets slowed this week after a very busy previous week, in the week ahead, we’re looking forward to the trading debut of Sophic client, Luckbox (LUCK-TSXV). Emerge Ecommerce (ECOM-TSXV) is also expected to start trading this coming week. Meanwhile, in the USA, AirBnB, DoorDash and C3.AI, all had very strong trading debuts as expected by most. At the same time, IPOs of Roblox and Affirm seem delayed to 2021, with speculation that these companies may try a different approach than the traditional IPO in order to avoid massive IPO pops, which do not benefit companies issuing new stock. Some alternatives could include direct listing, auction IPOs or going public via a SPAC. At the same time, there seems to be increasing chatter about unsustainable valuations.
This past week was perhaps one of the most tech capital markets news intensive weeks we have witnessed in a while. In Canada, there was plenty of activity in public and private markets, as well as M&A with MindBeacon, Dye&Durham, theScore, BlackBerry, Lightspeed, Benevity, Element AI & PayBright. In the USA, a lot of attention was focused on Salesforce-Slack acquisition, at a 50% premium, however, there were at least three more high profile acquisitions, as well as a few more high profile IPOs including Airbnb & DoorDash.
We witnessed another week of decent small tech capital markets activity in Canada. In the USA, with the Thanksgiving shortened holiday week, another massive Stripe up-round, Metromile’s SPAC and Discord’s financing were perhaps the most topical news items.
It was a robust week for tech financing in Canada, as well as another high profile M&A exit. While, in the USA, there’s news of a few more high profile tech IPOs. Usually capital markets activity slows down markedly between the American Thanksgiving holiday and the New Year, but with a lack of Holiday parties this year, it remains to be seen if this holds true.
This week, we learnt some more details on ANT Financial’s IPO delays, as well as planned IPOs for Airbnb, DoorDash and Instacart (all likely benefiting from the COVID trade). In Canada, it was relatively quiet week on the funding front, but we expected continued activity in healthcare tech, and perhaps crypto related companies (we’ve already seen a couple), as Bitcoin quietly marches upwards.
US elections dominated the news cycle this past week, with larger tech related questions pertaining to US antitrust & Section 230 regulations, as well as, US-China relations. The sudden change in ANT massive planned IPO was a very unexpected development for investors. Airbnb’s planned IPO, which could be announced next week, and its reception, could help shape the near term tech investing narrative. In Canada, we expect Lightspeed with its largest acquisition to date (US$440 million), to attempt emulate Shopify’s success in gaining support from an international investor audience.
With the US elections looming in the coming days, capital markets newsflow in the USA this past week focused on M&A vs. new issues. Internationally, the imminent Ant Group IPO, seems very eagerly anticpated by investors. In Canada, as we expected a few weeks ago, we saw activity in the healthcare tech space with Vitalhub and CB2 Insights, both announcing financings.