CIBC Tech & Innovation Market Update – January 2024 – Volume 45

Canadian technology sector performance and valuation

Source: FactSet and Pitchbook as at December 31, 2023; in C$ unless otherwise noted. 
1 Please refer to the end of the document for technology group constituents.

Canadian venture capital market monthly recap

December 2023

Aggregate deal value

$234M
(vs. $328M in Nov-23)²
YTD: $6.1B
(vs. $8.1B YTD-22)³

Number of deals

30
(vs. 46 in Nov-23)
YTD: 537
(vs. 822 YTD-22)

Avg. deal value

$11M
(vs. $11M in Nov-23)²
YTD: $17M
(vs. $15M YTD-22)³

Most active province by value ($ / #)

Ontario
($132M / 6)
YTD: Ontario
($3.6B / 259)

Most active province by count ($ / #)

British Columbia
($79M / 11)
YTD: Ontario
($3.6B / 259)

Most active sector

Software
(64% of funds raised)
YTD: Software
(65%)

2 8 deals in Dec-23 and 16 deals in Nov-23 with no announced values are omitted from deal values.
3 187 deals in YTD-23 and 290 deals in YTD-22 with no announced values are omitted from deal values. 

Noteworthy Canadian deals

Company Size Financing round Sub-sector Lead investors
KOHO C$86M Series D Software - FinTech Eldridge Industries / BDC
ContactMonkey US$55M Series A Software – TMT SaaS Updata Partners
Fantuan US$40M Series C Restaurants, Hotels, and Leisure – FoodTech Celtic House Asia Partners / GrubMarket
UniUni US$20M Series B Commercial Services - B2B E-Commerce Alibaba Group / Celtic House Asia Partners

T&I @ CIBC

Deal activity

CourseKey

Undisclosed
Senior Credit Facility
CIBC Innovation Banking acted as Sole Provider

CourseKey – Growth Capital Financing

CIBC Innovation Banking provided a senior credit facility to CourseKey, a leading student success and retention platform for trade and vocational education programs. The platform supports both students and vocational educators with a full suite of analytics.

Podcasts

Technology & Innovation in‘sites’ with CIBC Equity Research

T&I 'Bits and Bytes'

Holiday halt – Adobe and Figma break up

Recently, Adobe and Figma announced the termination of Adobe’s $20 billion acquisition of Figma, amid EU and U.K. CMA regulatory hurdles. The deal fall-out will cost Adobe a $1 billion termination fee. This year has been a challenging year for big tech transactions, as the FTC cracks down on mega-cap M&A and monopolistic and anti-competitive practices. Earlier this year, we pondered whether big tech M&A was dead in the wake of the Microsoft and Activision Blizzard deal, and this news leads us to ask the same question.

Atomic aspirations – Microsoft targets nuclear power for AI operations

In mid-December, Microsoft announced that the company has been experimenting with GenAI to determine if AI can assist in streamlining the approval process for nuclear power projects, supporting the company’s bet on next-generation nuclear reactors to power its data centres and AI ambitions. We recently wrote about the energy-intensiveness of generative AI in our inaugural AI In Tech note, as well as the potential to leverage generative AI to optimize energy efficiency. Like most of the tech giants, Microsoft has pledged to be carbon negative by 2030, and an uptick in AI workloads presents a challenge to achieving this goal unless the company can find clean sources of energy. Microsoft’s announcement is timely, given the United Nation’s COP28 conference concluded this week, with 22 countries (including the United States and Canada) pledging to “triple global nuclear power generation by 2050”.

GST, HST, and now DST – Canada takes an offensive stance

In early December, a motion was tabled in Ottawa by Canadian Finance Minster Chrystia Freeland that detailed a series of planned tax measures which included the proposed Digital Services Tax (DST). Canada and the US have been feuding over Ottawa’s DST, which targets large technology companies, since fall 2020 when it was first announced. Canada has held off on the DST for the last few years in hopes that a global consensus on how online-based multinational companies should be taxed could be reached; however, earlier this year Ottawa said it will be moving forward. While the motion does not specify when Canada will impose the DST, Freeland’s comments have suggested an effective date of January 2024.

Recent technology news

Conversations around technology can often be negative, like the market’s volatility, AI proliferating disinformation, and large company layoffs. Kevin Roose of the New York Times however, would like to focus on the positive. Last month, Roose curated his annual list for 2023 of the tech projects that in his opinion, delivered real human benefit.

Read the full article at The New York Times.

From the Titan submersible (another story of human hubris) to lab-grown meat (current technology does not look like it can scale), MIT Technology Review rounds up seven of the biggest technology failures of 2023.

Read the full article at MIT Technology Review.

BetaKit’s Douglas Soltys and Rob Kenedi released their annual tech predictions for 2024. After the year that social media networks have had, especially “X”, one of their predictions is that these online communities will continue to languish under more fake news, AI generated content, and mass online harassment.

Listen to the BetaKit podcast.

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Tech & Innovation Key Contacts

Roman Dubczak
Deputy Chair
Susan Rimmer
Managing Director And Head, Global Corporate & Investment Banking
Kevin Li
Managing Director and Head, Global Investment Banking

Global 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
Adam Noily
Managing Director, Head of U.S. Technology & Innovation, Global Investment Banking
Daniel Lee
Managing Director, Technology & Innovation, Global Investment Banking
Emilie Bissonnette
Managing Director, Global Investment Banking
Rob Magwood
Managing Director, Equity Capital Markets
Frazer Wong
Executive Director, Technology & Innovation, Global Investment Banking

Innovation Banking

Mark Usher
Executive Managing Director, Innovation Banking
Paul McKinlay
Vice-President and Head of U.S. Origination, Innovation Banking
Amy Olah
Managing Director and Head of Canadian Origination, Innovation Banking

Canadian Technology Constituents

High-Growth Canadian SaaS
  • Ceridian
  • Copperleaf
  • Coveo
  • Descartes
  • Docebo
  • Kinaxis
  • Lightspeed
  • Q4
  • Shopify
  • Thinkific
Large Cap Canadian Tech
  • Altus
  • Blackberry
  • Celestica
  • CGI
  • Constellation Software
  • Converge Technologies
  • Dye and Durham
  • Enghouse
  • Evertz Technologies
  • Nuvei
  • OpenText
  • Softchoice
  • Well Health
Mid Cap Canadian Tech
  • Calian
  • Computer Modelling Group
  • D2L
  • Kneat
  • Payfare
  • Real Matters
  • TECSYS
  • Tiny
  • Vecima
Small Cap Canadian Tech
  • Alithya
  • Baylin Tech
  • BBTV
  • Blackline Safety
  • Farmers Edge
  • Optiva
  • Pivotree
  • Quarterhill
  • Sangoma
  • Sylogist
  • Terago
  • VerticalScope
  • Vitalhub
  • Voxtur

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