Weekly Investment News and Analysis

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.

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.

Sophic Client GameSquare Esports (GSQ-CSE, GMSQF-OTC, Sophic Client) announces US$3.0 million Private Placement led by Goff Capital and the Jones Family and a new strategic investor to further strengthen the Company’s shareholder base. In a recent report, we examine, Sophic Client, Edge Total Intelligence (CTRL-TSXV) offerings as edgeTI’s software provides enterprises a single point of control software enabling the rapid coordination and execution of informed decisions. This is a US$23 billion industry, and edgeTI is establishing itself to grow in this industry. Shopify told employees on Thursday that it will raise all employees’ base salaries, The Information has learned. The salary increases will come into effect starting in July, according to a person familiar with the matter. The move follows The Information’s report that Shopify was suffering from staff defections, even as Shopify’s stock plunge this year has reduced the value of recent stock grants. Canada Pension Plan Investment Board (CPP Investments) today announced that it has invested US$425 million in VerSe Innovation Private Limited, one of India’s leading content technology platform companies. PokerStars and FanDuel join forces to strike major partnership deal with Maple Leaf Sports & Entertainment. Gartner forecasts global tech spending to hit US$4.4 trillion this year, up 4%. Buffett’s Berkshire reveals stake in HP; shares surge almost 10%. Twitter shares surge after disclosure Elon Musk has taken stake. Amazon, Alphabet and others are quietly rolling out drone delivery across America. Cash App discloses security breach impacting over 8 million users. Apple Pay surpasses Venmo and PayPal as teens’ favorite payment app, shows Piper Sandler survey. Meta Platforms’ financial arm, Meta Financial Technologies, has been exploring the creation of a virtual currency for the metaverse, the Financial Times reported.

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.

Most Canadian investors we spoke with this past week, seem as enthusiastic as ever on the telehealth space. We expect more activity in this sector. In the larger tech space, PayPal’s crypto move and the US Antitrust lawsuit against Google seem to be major stories this past week. Looking ahead, the next week is packed with major tech giants releasing earnings, as well as Twitter’s Jack Dorsey, Facebook’s Mark Zuckerberg and Alphabet’s Sundar Pichai will appear before a US Senate committee examining Section 230 of the Communications Decency Act.

Canadian public market investors appear bullish on telehealth & health tech companies, as evidenced by their recent stock performance. We would expect increased capital allocated to this sector in the near term. The investment by a subsidiary of the investment arm of Alibaba Group into PopReach (POPR-TSXV) also appears to have resonated well with investors. Recall, such validation by a well regarded international investor was a very strong endorsement for Well Health (WELL-TSX), which dramatically improved that company’s access to capital.

After around 15 years of covering Canadian technology stocks, we’re very encouraged to begin see an increasing number of high quality Canadian companies go public or consider going public, which enables average investors to benefit from innovation driven wealth creation. In this regard, we’ve recently seen news pertaining to BBTV, Cymax and Nuvei.

Last week saw healthy levels of financing across the Canadian tech ecosystem, in both public and private markets. South of the border, Roblox should be an interesting stock to watch out for. Newsflow seems to be focused more on regulatory issues, and the CEOs of Facebook, Google, Twitter are expected to testify to the U.S. Senate before the election.

IPO activity in the USA cooled a bit after a few heated weeks, while M&A kept chugging along. In Canada, publicly listed technology companies announed ~$85 million in bought deals.

It’s great to see Nuvei have a successful IPO on the TSX last week — we believe robust IPOs are a very important part of the Canadian public markets ecosystem, even as US capital markets rediscover SPACs. Canadian VC also reported strong activity.