CIBC Tech & Innovation Market Update – January 2023 – Volume 33

Welcome to the official newsletter of CIBC’s Tech & Innovation Capital Markets Group

A curated monthly report to keep our readers abreast on relevant and recent developments within the Canadian tech ecosystem.

Canadian technology sector performance and valuationCanadian Technology Sector Performance and Valuation Chart


EV / NTM revenue multiples 1 LTM sector price performance 1
EV/NTM revenue multiples: High Growth Canadian Saas 4.6x, Mid Cap Canadian Tech 2.1x, Small Cap Canadian Tech 1.7x, Large Cap Canadian Tech 2.5x LTM sector price performace: Large Cap Canadian Tech: (20.3%), Small Cap Canadian Tech (42.2%), Mid Cap Canadian Tech (32.3%), High-Growth Canadian Saas (45.7%)

Source: FactSet and Pitchbook; as at December 30, 2022; in C$ unless otherwise noted.
1 Please refer to the end of the document for technology group constituents.


Canadian Venture Capital market update 2


(vs. $771M in Nov-223)
Aggregate deal value


(vs. 51 in Nov-22)
Number of deals


(vs. $28M in Nov-223)
Avg. deal value


($210M / 17)
Most active province
by count ($ / #)


($210M / 17)
Most active province
by value ($ / #)


(61% of funds raised)
Most active sector

2 11 deals with no announced value are omitted from deal value.
3 23 deals with no announced value are omitted from deal value.


Noteworthy Canadian deals




Lead investors




Yaletown Venture Partners

Darwin CX



First Ascent Ventures
Felicitas Global Partners




Government of Canada

Elastic Path



Sageview Capital

Perspectives from The Hon. Navdeep Bains

Vice-Chair and Managing Director for Global Investment Banking, and former Canadian Minister of Innovation, Science, and Industry shares his insights.

A headshot of Navdeep Bains

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The critical minerals strategy should be welcomed by the sector and signals the government’s strong support for meaningful change… Yet without the requisite urgency, we may not be able to capitalize on our potential to lead in this space.”

This is a pivotal moment for Canada to accelerate its critical minerals advantage.

In early December, the Government of Canada published its critical minerals strategy – essential materials for a wide range of sectors including renewables and electronics. As a resource-rich nation backed by strong research & development and manufacturing capabilities, Canada is truly poised to become an undisputed player in the critical minerals space. We are already home to nearly half of the world’s publicly traded mining and minerals exploration companies with a combined market capitalization of $520 billion. In order to further Canada’s lead there are five key areas that the public and private sectors can engage to further support the industry, develop talent, and meet environmental & social obligations.

Read the full report on the Financial Post


Deal Activity

Azalea Health - $US45M Credit Facility, December 2022

Azalea Health – $45 Million Debt Financing

CIBC Innovation Banking announced their lead arrangement of a $45 million syndicated debt financing for Atlanta-based Azalea Health, a leading provider of electronic health records and revenue cycle management for community-based healthcare providers.

Azalea was awarded the Best Electronic Health Record Solution designation at the 2021 MedTech Breakthrough Awards Program.

Read the full report Business Wire.



Technology & Innovation in‘sites’ with CIBC Equity Research

T&I ‘Bits & Bytes’


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M&A Outlook in 2023 – Tech M&A continues despite market malaise

In times of economic uncertainty and market softness, M&A typically slows initially but picks up steam as valuations are reset. With significant dry powder, an attractive valuation environment, and a renewed focus on value-surfacing activities among management teams and investors alike, 2023 is set up to be a busy year for dealmaking. With buyers that rely on leveraged financing likely taking a more cautious stance, we believe strategic acquirers with cash reserves are well positioned. While smaller deals are making up an increasing amount of the total pie, megadeals continue, with Thoma Brava announcing its intention to acquire Coupa for US$8 billion in December. We also expect M&A amongst late-stage and mature private companies to remain elevated as prospects for public listing remain muted.

Read the full article here.


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2023 Software and Services Outlook – Expecting costs optimization and a continuation of M&A

After several years of pandemic-fuelled growth, the software sector had a difficult 2022. Rising rates coupled with inflation and an uncertain macro environment led the stocks under our coverage to decline 31% Y/Y. At this point, we see signs of a bottom for tech stocks, with SaaS names now trading at an average EV/Sales multiple that is roughly in line with mature software names. That being said, the timing of a recovery remains uncertain and hinges on greater certainty on the timing and extent of a shift to a more dovish rate posture.

Read the full article here.


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Crypto winter – 2022 institutional investor digital asset survey results

The crypto market turmoil that started late 2022 with the Terra Luna crash and most recently with the public implosion of FTX, has caused a contagion effect among crypto funds. This ripple has resulted in a rush of liquidation requests by customers and led many exchanges to implement a pause on withdrawals, including Gemini which recently told its customers that it cannot meet its redemptions within its service-level agreements.

Despite these events, according to Coinbase’s 2022 institutional investor survey, crypto investors remain bullish on the future of digital assets although expect recent events to dampen short-term sentiment.

Read the full article here.

Recent technology news

“PLG and profitability: more product doesn’t necessarily mean greater profits”

A comparison of public SaaS companies showed that companies focused on product-led growth (PLG) correlated to greater decline in profitability by profit margins than companies focused on sales and marketing (SLG) in 2022. SLG companies were about 5% to 10% more profitable than PLG companies. However, prior to the pandemic, PLG companies had long held greater profit margins. It’s likely the greater expense nature of PLG companies that makes their profit margins more affected by economic downturns.

Read the full article by San Francisco-based Venture Capitalist Tomasz Tunguz.

“ChatGPT is a tipping point for AI”

OpenAI recently released a new version of ChatGPT and the jump in quality of the AI writing has surprised many analysts. From writing weight-loss plans and children’s books to being able to convincingly replicate the style of the King James Bible – ChatGPT is believed to be a turning point in the usefulness of AI learning in the workplace.

Read the full article at Harvard Business Review.

“2022: the year that changed the way we work”

According to Cassie Kozyrkov, Chief Decision Scientist at Google – 2022 was remarkable for increasing productivity through AI solutions. Most of us have likely seen AI-in-action from the likes of Lensa and Midjourney that can instantaneously generate dazzling iterations of artwork. This is all setting the stage for AI’s “productivity phase” in 2023.

Read the full article by Cassie Kozyrkov.

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CIBC Capital Markets Insights

Leverage leading insights and stay abreast of developments in the markets with CIBC Capital Markets Insights.

Connect with us on Twitter and LinkedIn.

Tech & Innovation Key Contacts

Roman Dubczak
Deputy Chair
Susan Rimmer
Managing Director And Head, Global Corporate & Investment Banking
Kathy Butler
Vice Chair and Head of CIBC Capital Markets – B.C.
Colin Ryan
Managing Director, Head of Technology & Innovation, Global Investment Banking
Daniel Lee
Managing Director, Technology & Innovation, Global Investment Banking
Adam Noily
Managing Director, Head of U.S. Technology & Innovation, Global Investment Banking
Rob Magwood
Managing Director, Equity Capital Markets
Emilie Bissonnette
Managing Director, Global Investment Banking
Frazer Wong
Executive Director, Technology & Innovation, Global Investment Banking
Mark McQueen
President and Executive Managing Director, Innovation Banking
Mark Usher
Executive Managing Director, Innovation Banking
Paul McKinlay
Vice-President and Head of U.S. Origination, Innovation Banking

Canadian Technology Constituents

High-Growth Canadian SaaS – Ceridian, Copperleaf, Coveo, Descartes, Dialogue, Docebo, Kinaxis, Lightspeed, Magnet Forensics, Q4, Shopify, Thinkific

Large Cap Canadian Tech – Altus, Blackberry, Celestica, CGI, Constellation Software, Converge Technologies, Dye and Durham, Enghouse, Evertz Technologies, Nuvei, OpenText, Sierra Wireless, Softchoice, Well Health

Mid Cap Canadian Tech – Absolute Software, Calian, Computer Modelling Group, D2L, E Inc., Payfare, Real Matters, Sangoma, TECSYS

Small Cap Canadian Tech – Alithya, Baylin Tech, BBTV, Blackline Safety, Farmers Edge, Kneat, Optiva, Pivotree, Quarterhill, Sylogist, Terago, Vecima, Vitalhub, WeCommerce

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