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 valuation
| EV / NTM revenue multiples 1 | LTM sector price performance 1 |
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Source: FactSet and Pitchbook; as at May 31, 2022; in C$ unless otherwise noted.
1Please refer to the end of the document for technology group constituents.
Canadian Venture Capital market update 2
2 10 deals with no announced value are omitted from deal value.
3 18 deals with no announced value are omitted from deal value.
Noteworthy Canadian deals
| Company | Size | Sub-sector | Lead investors |
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US$185M | Financial Services |  |
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US$95M | Software |
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US$50M | Commercial Services |
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US$45M | Software |
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T&I @ CIBC
CIBC Global Investment Banking
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CIBC Technology & Innovation Conference 10.0 Between May 25-26th, CIBC 10th Tech & Innovation Conference took place at the Metro Toronto Event Convention Center, hosting 34 of Canada’s most innovative corporate tech firms. Our keynote speakers were CIBC Deputy Chief Economist, Benjamin Tal and Mark Shulgan, Managing Director and Head of Growth Equity at OMERS. Benjamin Tal gave his economic forecast which accounted for changes in supply chains, consumer spending, Canadian immigration, and rent prices. Mark Shulgan provided his account of the growth equity market and how it has been influenced in part by the increase in technology adoption spurred by the pandemic. There was a high level of activity at the conference for which we hosted 106 investor meetings with close to 150 touchpoints. Our team greatly valued a return to in-person to witness the connections made through live discussion and collaboration among our attendees. Thank you all for making our 10th Tech & Innovation Conference a great success! |
Deal Announcements – CIBC Innovation Banking
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DealMaker – Growth Capital Financing CIBC Innovation Banking is pleased to announce growth capital financing for DealMaker, a leading capital raising technology platform. The financing will enable the company to accelerate its growth across North America.
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Impartner – $35 million Growth Capital Financing CIBC Innovation Banking is pleased to announce $35 million of growth capital financing to Salt Lake City-based Impartner Inc. (“Impartner”), a leading partner relationship management (PRM) platform. Impartner plans to use the financing to increase its investments across sales & marketing, go-to-market strategy, and research & development to further accelerate its growth momentum.
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Podcasts
Technology & Innovation in‘sites’ with CIBC Equity Research
T&I ‘Bits & Bytes’
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CIBC Tech & Innovation Conference Recap – A look at key themes & implications The Canadian tech ecosystem remains vibrant, with 34 public and private Canadian tech firms participating in our two-day in-person event. For those who were not able to attend, our analysts provide seven key takeaways including the M&A environment showing signs of improvement and forecast that supply chain disruptions will continue in 2022. Read the full article here. |
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The impact of HB20 – New Texas social media law targets Big Tech A recent ruling from the 5th U.S. Circuit Court of Appeals will enact HB20, a new law that prohibits large apps and websites from banning users or removing content from Texas residents based on the “viewpoint of the user or another person.” The surprise ruling has raised immediate concerns around the future of content moderation on social media platforms, as it creates a clear path for users to sue tech giants for a variety of content moderation decisions. If HB20 is upheld by the Supreme Court, social media platforms will likely have to significantly rethink their approaches to content moderation as they become legally required to host content that would be in clear violation of their established community guidelines. Read the full article here. |
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Canada’s emerging tech in 2022 – Perseverance through a market in flux Our analysts consolidate their findings in their 10th report on emerging tech within Canada under the backdrop of rising interest rates, inflation, supply chain disruptions and the war in Ukraine. Despite recent declines in the tech sector and emerging near-term challenges, Canada’s technology ecosystem remains vibrant with numerous opportunities. Read the full article here. |
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Conserving cash – VC-backed firms pivoting from a growth mentality The broad valuation reset among public tech companies is trickling into private tech markets. Venture capital (VC) funding fell 26% sequentially in Q1 according to Pitchbook, with valuations of high-growth start-ups down 42% over the same time period. Investors have a renewed focus on profitability, with private tech companies aggressively instituting hiring freezes and cost cuts to conserve cash. With VC and IPO funding increasingly scarce, we expect M&A could accelerate to fill the void, with strategic acquirers looking to strengthen their tech stack at reasonable valuations. Read the full article here. |
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Hiring consultants – The great hiring spree of business services companies The total number of U.S. jobs hasn’t yet climbed back to pre-pandemic levels, but that has not stopped Business and Professional Services companies from stockpiling talent as demand for their services skyrockets. There might be a great resignation, but the hiring spree has been greater for this sector, allowing these companies to recover any ground lost in the pandemic, and then some. Read the full article here. |
Stay informed. Request access to CIBC Capital Markets Research Central here.
Recent technology news
“Could smart guns save lives?”
In the wake of the deadliest U.S. school shooting in a decade, another debate over U.S. gun control has arisen with predictably high levels of partisanship. With stalls in creating effective public policy, entrepreneurs are looking to create more security measures such as adding fingerprint technology or phone app logins before a gun is able to fire.
Read the full article at the Washington Post.
“Have we hit the bottom?”
Insights from a Palo Alto Venture Capitalist informs us how the tech landscape has changed since 2008, and what that means as investors forecast the sector’s performance in the midst of another recession.
Read the full article at Clouded Judgement.
“What the hell is happening in the Tech Industry?”
Insights from a Senior Product Manager informs us how hiring will change based on the shrinking of the tech market while capital is in more moderate supply. Since March, 120,000 people were fired from startups all over the world.
Read the full article at Medium.
“Flight delayed? Blame a spaceship.”
While more diligent sanitation protocols and greater incidents of unruly passengers have impacted flight times, airports in Florida have seen a sharp increase in delays from rocket launches. As interest in commercial space travel gains traction, airlines will have to contend with this reduction in available air space. To recognize the impact of space travel to airplane flights, it was found that the Space X Falcon Heavy launch in 2018 impacted 563 flights, creating 4,645 total minutes of delay, and forced planes to fly an extra 34,841 nautical miles.
Read the full article at Vox.
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Tech & Innovation Key Contacts
Canadian Technology Constituents
High-Growth Canadian SaaS – Ceridian, Coveo, Descartes, Dialogue, Docebo, Kinaxis, Lightspeed, Magnet Forensics, Q4, Shopify, Thinkific
Large Cap Canadian Tech – Altus, Blackberry, CGI, Constellation Software, Converge Technologies, Dye and Durham, E Inc., Enghouse, Evertz Technologies, Nuvei, OpenText, Real Matters, Softchoice
Mid Cap Canadian Tech – Absolute Software, Blackline Safety, Calian, Celestica, Computer Modelling Group, Sierra Wireless, TECSYS, WeCommerce
Small Cap Canadian Tech – Alithya, Baylin Tech, BBTV, Farmers Edge, Kneat, Optiva, Pivotree, Quarterhill, Sangoma, Sylogist, Terago, Vecima, Vitalhub
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