CIBC Tech & Innovation Market Update – April 2023 – Volume 36

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The information you need to stay up to date on developments within the tech ecosystem.

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CIBC Technology and Innovation Conference 11.0

We are excited to announce that CIBC’s 11th annual Technology and Innovation Conference is scheduled for May 24, 2023 at CIBC Square in downtown Toronto.

This conference is by invitation only. Please contact your CIBC representative for more information.

Canadian technology sector performance and valuationSector Performance and valuation chart: S&P 500 (9.3%), S&P 500 Info Tech Index (5.6%), NASDAQ (14.1%), S&P/TSX Info Tech Index (6.2%)

EV / NTM revenue multiples 1 LTM sector price performance 1
EV/NTM revenue multiples: High Growth Canadian Saas 5.2x, Large Cap Canadian Tech 2.8x, Mid Cap Canadian Tech 2.3x, Small Cap Canadian Tech 1.8 LTM sector price performace: Small Cap Canadian Tech (33.3%), Mid Cap Canadian Tech (24.2%), Large Cap Canadian Tech (14.6%), High-Growth Canadian SaaS (10.0%)

Source: FactSet and Pitchbook; as at March 31, 2023; 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. $491M in Feb-233)
Aggregate deal value


(vs. 36 in Feb-23)
Number of deals


(vs. $18M in Feb-233)
Avg. deal value


($125M / 18)
Most active province
by count ($ / #)


($125M / 18)
Most active province
by value ($ / #)


(46% of funds raised)
Most active sector

2 Market update for March 2023. 17 deals with no announced value are omitted from deal value.
3 14 deals with no announced value are omitted from deal value.


Noteworthy Canadian deals




Lead investors



Communications and Networking

Government of Canada

SPARK Microsystems



Idealist Capital




Centana Growth Partners

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 [Inflation Reduction Act] was introduced by Mr. Biden last year and while it is to be applauded for its wide-ranging measures in support of the energy transition, its aggressive subsidies also demand a meaningful Canadian response.”

Canada must note U.S. friendship during Joe Biden’s visit, but also stand up for itself

Mr. Biden’s visit is an opportunity for Canadians to consider how to make sure our own decisions and advocacy can reinforce Canada’s place within a strong North American partnership.

The Inflation Reduction Act is a great starting point. The act was introduced by Mr. Biden last year and while it is to be applauded for its wide-ranging measures in support of the energy transition, its aggressive subsidies also demand a meaningful Canadian response.

The measures in the act add up to billions of dollars of support for the U.S. manufacturing and energy sectors over the next few years. There is real concern it could trigger capital flight to the U.S. and leave Canada’s energy and clean tech sectors reeling. “The U.S. has turned on a shop vacuum to suck up incentives and we’re standing here with the Dustbuster,” Matt Poirer of the Canadian Manufacturers & Exporters Association told Parliament’s international trade committee in November.

Read the full report on CIBC Capital Markets Insights


Deal Activity US$40 million Credit Facility. CIBC Innovation Banking acted as Sole Provider. March 2023. – $40M Credit Facility

CIBC Innovation Banking provided $40 million in growth capital financing to San Fransico-based is a leader in using artificial intelligence to expedite disease detection, inform critical care decisions and help improve patient care. This financing will help expand the company’s AI-powered care coordination platform and fuel its expansion including potential acquisitions.

Read the full report on Business Wire.



From actionable lessons to must-ask questions, our #CIBCInnovationEconomy video series showcases how founders have navigated the growth of their company.

Technology & Innovation in‘sites’ with CIBC Equity Research

T&I ‘Bits & Bytes’


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Taking stock – Federal budget institutes a 2% tax on buybacks

The Federal budget announcement in late March formalized a 2% tax on share buybacks, which was first announced in November 2022. The buyback tax follows the lead of the US, which passed a 1% share buyback tax with its Inflation Reduction Act (IRA) in August 2022. The Canadian tax will come into effect in January 2024 and is expected to increase federal revenue by $2.5B over five years. In addition to a government revenue generator, the budget document suggests that the tax will provide an incentive for companies to prioritize other spending, including re-investments into the business. We see the tax as possibly too low to make much of a difference in capital allocation decisions, although we could see more buyback activity in 2023 as corporates buy back shares ahead of the implementation of the 2% tax.

Read the full article here.


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Q4/Canadian Software Recap – Key themes from Q4 earnings

With the global economy slowing down and tech valuations having come back down to earth, some investors are searching for additional ways to generate returns in the tech sector. In 2022, Bloomberg noted a 74% increase in activist engagement involving tech companies, with 32 tech sector shareholder activism campaigns registered in Q4/22 alone. While H1/22 tech sector activism mainly focused on hardware companies given supply chain challenges, recently the focus has shifted towards software firms. Most notably, multiple activist investors have built positions in CRM giant Salesforce, including a multi-billion dollar stake by Elliott Investment Management. Specific details of the activist campaigns against Salesforce haven’t been made public, but the company is facing a number of challenges including the departure of co-CEO Bret Taylor, a 10% reduction in headcount, and macro-related pressure on IT spending that has resulted in the company declining to provide 2024 guidance.

Read the full article here.


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IRS Calling – Delayed IPOs could lead to hefty tax bills

Late-stage private companies have been using restricted stock units (RSUs) to attract and retain top talent for years. These RSUs are triggered by a liquidity event (typically an IPO) and expire within five to ten years. Amid an IPO window that remains effectively closed, many private firms are now debating how to approach expiring RSUs. Letting the RSUs expire worthless impacts employee morale, while modifying the expiration date can lead to tax implications. Stripe has been the most visible company to struggle with RSU expiration and is looking to raise capital to fund a hefty tax bill that will come due as it makes adjustments to its RSU program. With a muted IPO market, 2023 is shaping up to be a year of RSU headaches for many private firms.

Read the full article here.

Recent technology news

“Before collapse of Silicon Valley Bank, the Fed spotted big problems”

Even as far back as 2021, the Federal Reserve was concerned with Silicon Valley Bank’s cash reserves, issuing six citations. After little evidence of improvement, the Federal Reserve gave Silicon Valley Bank a full supervisory review in July 2022, finding significant issues in governance and controls. In March 2023, the Federal Reserve was performing a horizontal review – i.e. a comprehensive risk management assessment. With Silicon Valley Bank’s weaknesses being identified and monitored by the Fed long before the March 10th collapse it calls into question how the Fed intervened, and if the Fed could have done more to prevent it.

Read the full article at the New York Times.

“Who owns the generative AI platform”

In this generative AI boom, there have been early winners with several applications such as Stable Diffusion and ChatGPT reaching $100 million of annualized revenue in less than a year. As the AI industry takes shape among infrastructure vendors, application vendors, and model providers, how will market forces play out?

Read the full article at Andreessen Horowitz.

“When will SaaS Budgets increase again?”

The economic slowdown which started last year has reduced growth rates across SaaS groups from 46% to 31% annually. Using MongoDB’s recent earnings as an example, their earnings showed no single vertical contributing to their drop in revenue – rather revenue growth dropped across the board, intensifying budget constraints. As of yet, there is little sign of software budgets improving near-term.

Read the full article by Venture Capitalist Tomasz Tunguz.

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CIBC Capital Markets Insights

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

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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 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, 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, 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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