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.
March 28, 2021: Canadian capital markets see slight uptick, even as North American investors exhibit price sensitivity
After a few weeks of volatility in Canadian capital markets, last week saw a bit of an uptick in activity. That said, we’re hearing investors are pushing back on some richly valued new issues. We’re excited to see MDA (a Canadian company we’ve known as 15 years as sell side equity analysts) could be a public company once again. In the USA, Robinhood has filed confidentially for a US IPO. Both Robinhood & SoFi have indicated they will let retail investors buy into IPOs. We’re also watching Coursera’s IPO, as many influential investors COVID could forever change education. WeWork could go public via a SPAC. In the US too, recent IPO debuts by Vizio and DigitalOcean suggest investors could be more price sensitive with regards to new issues than in the past few months.
March 21, 2021:Relatively quiet week in Canadian growth sector capital markets, but pipeline remains very busy
Given market volatility in the technology and growth sectors over the past few weeks, this last week saw a muted level of new growth sector equity financings in Canada once again. That said, new offering pipelines appear healthy, and our contacts at various investment banks suggest there could be up to ten newly minted tech companies in Canada relatively soon. Sophic client, AnalytixInsight (ALY-TSX), could be an interesting stock to watch over the next few weeks, as the company could benefit from increased retail investor trading globally – the company, last week, also announced a new ESG focused offering. In this regard, we are also watching eToro’s SPAC in the USA, as well as public debuts by Deliveroo, Coinbase, Stripe.
As market volatility continued early last week after tumultuous trading the previous week, our discussions with our capital markets contacts suggest new issue pipelines remain exceptionally busy, which, in our view, bodes well for public markets relating to Canadian tech and clean tech. In the Canadian small cap space, we were encouraged to witness Sophic Client Luckbox (LUCK-TSXV), and separately, EMERGE Commerce (ECOM-TSXV) both close recently announced upsized financings. We’re also eagerly anticipating Telehealth provider Dialogue’s IPO. With Bitcoin hitting US$60K over the weekend, we expect crypto to remain an active theme globally. In the USA, Roblox and Coupang, both had strong public market debuts last week, as generally expected.
After three successive weeks of extraordinarily strong capital markets activity by the Canadian technology and clean tech sectors, this past week was impacted by ongoing market volatility as we expected last week. Public markets equity raises were under $100 million by our count. We are keeping an eye out on the performance of TAAL (an interesting Bitcoin SV play) and General Pizza (our due diligence found the pies to be delicious!). In the USA, we’re eager to see public debuts by Coupang, Instacart, Rocket Lab and Cipher in coming weeks/months.
February 28, 2021:Another Strong Week for Canadian Capital Markets, Market Volatility Near Term Speedbump
After two consecutive weeks of extraordinarily strong capital markets activity by the Canadian technology and clean tech sectors, with total public equity fundraising announcements of around $2.5 billion. That said, recent market volatility could temper upcoming near-term activity as investors digest recent new issues and grapple with increased market fluctuations. In the USA, we look forward to upcoming public market debuts by Coinbase, Robinhood, Roblox and Toast.
After our last weekly update, highlighted a very busy week for Canadian capital markets, last week was extremely busy as well, coming in at around $900 million in public markets equity transactions. Amongst our client list, Sophic client, Luckbox (LUCK-TSXV) announced a $5 million equity financing, which was raised to $15 million owing to strong investor demand. The launch of the second-ever bitcoin ETF just days after approving the first crypto fund, in Canada (EBIT-TSX & EBIT.U-TSX) received considerable attention. In the USA, Coinbase was reportedly valued above US$100 billion, ahead of a direct listing. SpaceX raised ~US$ 850 million at a ~US$75 billion valuation.
After our entry last week, highlighting a relatively quiet week in Canadian equity markets funding, this past week was perhaps one the busiest we can recall. We counted around ten different transactions in public equity markets, totaling close to a billion dollars. From our previous sell side equity research coverage list, we noted very significant developments with Mogo acquiring a stake in Coinsquare, and a share consolidation in the theScore, ahead of a potential US listing. In the USA, we would keep an eye out for Coupang and Rivian’s public market debuts, we expect both to perform well. Amongst our client list, Sophic client, Luckbox (LUCK-TSXV) announced a meaningful addition to the company’s management team, with the appointent of former Dunder, Mr Green and Electronic Arts executive Mr. Thomas Rosander as Chief Customer Officer.
While this past week, was relatively quiet in terms of Canadian small cap equity funding; sports betting and gaming stocks performed well. Sophic client, Luckbox (LUCK-TSXV) stock performed well as the company announced its entry into sports betting and Sophic client Kontrol Technologies (KNR-CSE) stock also performed well on the back of a $2 million funding from the province of Ontario. In the USA, Robinhood appears to be going ahead with its plans to go public in 2021 as downloads surged despite recent weeks’ public relations fiasco. In other developments, the tech media had some fresh data on Apple’s speculated virtual reality headset, which will reportedly cost US$3,000 and have 12 cameras with eye-tracking technology.
In Canadian tech & clean tech capital markets, this past week, we witnessed some healthy activity related to cryptocurrencies, as well as Sophic Client, UGE International (UGE-TSXV) raising over $6 million through a bought deal offering. Many Canadian investors are also aware of Monkey Knife Fight, which is being acquired by Bally’s, we were impressed by the product’s engagement as we followed the company’s evolution over the past few years. In the USA, and overall markets the Gamestop / Wallstreetbets has captured everyone’s attention and increased market volatility. As some may have speculated WeWork could be considering going public via a SPAC, Roblox’s IPO could be delayed, and Coinbase is considering going public via a direct listing.
Canadian tech & clean tech capital markets had an eventful week, marked by new issues, fund raising and M&A. In the USA, there was considerable chatter focused on the recent GameStop stock pop and resultant drama. Crunchbase had some interesting data around unicorns and their recent proliferation. Meanwhile, Bitcoin seems to be undergoing a correction, which some attribute to Janet Yellen’s comments at her recent Senate confirmation hearing.
January 17, 2021: Stock Investors Remain Focused on Crypto, Healthcare Tech, esports and ESG Sectors
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.