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 November 30, 2021; in C$ unless otherwise noted.
1Please refer to the end of the document for technology group constituents.
Canadian Venture Capital market update 2
2 9 deals with no announced value are omitted from deal value.
3 9 deals with no announced value are omitted from deal value.
Noteworthy Canadian deals
| Company | Size | Sub-sector | Lead investors |
|---|---|---|---|
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US$150M | Semi-conductors |  |
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US$115M | Commercial Services |  |
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US$70M | Software |  |
T&I @ CIBC
Deal announcement – CIBC Global Investment Banking
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E Inc. – $136 million Initial Public Offering E Inc. is a leading AutoTech platform that provides automotive dealerships with access to an online wholesale auction marketplace where they can purchase or sell vehicles to other dealers, as well as access innovative software solutions to support dealers’ digital retailing and inventory management. |
Deal announcement – CIBC Innovation Banking
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Intradiem – $35 million Credit Facility Intradiem is an Atlanta-based provider for of automation technology solutions for customer service teams. Intradiem will use the $35 million debt facility to expand its market growth and accelerate the launch of strategic products to deliver on its next generation platform and machine learning objectives. |
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Harbor Compliance – Credit Facility Harbor Compliance is a technology company that empowers nonprofits and businesses with licensing, tax, and entity management solutions. Harbor utilized the new capital to finance its acquisition of Labyrinth Inc. |
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Shorelight – Debt Financing Shorelight is a Boston-based enrollment and performance management platform providing greater access to international students to enroll in top U.S. educational institutions. Shorelight plans to further invest in automated, self-service tools for students, counselors and universities engaged on its platform. |
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CIBC Innovation Banking Expansion in New York We are expanding our New York operations with a number of strategic new hires and promotions, as we foster our growth in key technology, life science and clean tech markets in North America and the UK. Former marine, Ryan Enriquez joined this month as an Executive Director from JPM Chase’s Technology and Disruptive Commerce Team. Caroline Tkatschow joins as a Relationship Manager from our Toronto office. Jean Rafaelian joins as an associate for the Fund Banking Group after finishing her MBA in Finance at NYU. Existing Managing Director Paul Gibson has broadened his responsibilities to help drive the team’s progress in the Mid-Atlantic and New York markets. |
Podcasts
Technology & Innovation in‘sites’ with CIBC Equity Research
T&I ‘Bits & Bytes’
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Facing Regulation – Facial Recognition, A Contentious Topic Clearview AI, a provider of facial-recognition software running on neural networks, recently ranked among top 10 in accuracy in a U.S. federal test that ranked 100 global facial recognition vendors. While facial recognition technology accuracy has been improved through the use of deep learning and matching algorithms, the technology is still highly controversial. Clearview’s use of personally identifiable information without explicit consent has been heavily criticized and questions around the legality of the software loom large. Canada and Australia have both found Clearview AI in violation of privacy laws, and Australia has ordered the company to destroy all images and facial templates belonging to Australian residents. These negative headlines highlight the importance of clear data sharing policies and the need for independent review and consistent monitoring of surveillance technology to prevent misuse. |
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Canadian AI Update – Canada Continues To Make Waves In A Hot Market There has been a wave of global tech heavyweights joining the burgeoning Canadian AI industry as regional innovation hubs such as Toronto continue to churn out promising start-ups financed by prominent backers. Both Canadian VC firms and AI start-ups are seeing marquee talent join, with John Megrue Jr., former co-chairman of Bridgewater Associates, recently joining Radical Ventures as a partner. Canada has long been a centre for AI and is currently seeing the third-fastest growth in AI jobs worldwide. We highlight the diverse AI ecosystem here in Canada, including notable start-ups, recent financings, as well as supportive public funding, government policies, and programs that contribute to Toronto’s overall appeal and its superior ability to attract talent. |
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Put The E In ESG – COP26 Puts The Focus On Environmental Stewardship As world leaders convened at the UN Climate Change Conference (COP26), numerous firms announced new environmental targets, including Big Tech. The technology sector has generally scored well on the environment aspects of ESG given that technology firms generally have smaller carbon footprints than companies in other sectors, with their emissions (primarily data centre and office/employee travel) being potentially easier to reduce. Big Tech focused on 2030 environmental targets, with Google committing to be carbon-free by 2030, Microsoft planning to be carbon negative by 2030, and Apple stating that it will be carbon neutral across its entire business, manufacturing supply chain and product life cycle by 2030. Big Tech is also focused on combating misinformation, with Facebook, Google and Twitter announcing stepped-up measures to combat climate misinformation. |
Stay informed. Request access to CIBC Capital Markets Research Central here.
Recent technology news
“What’s worst about omicron so far is the uncertainty”
With a new variant comes widespread concern and serious questions to answer. One question that lingers is how effective current vaccines will be against the new variant. BioNTech SE and Moderna Inc. plan to have efficacy data to report within two weeks’ time.
Read the full article at Bloomberg
“Three views on Jack Dorsey’s decision to step down as Twitter’s CEO”
In Jack Dorsey’s resignation announcement he expressed the importance of founders distancing themselves once their company has reached maturity. Ultimately he believed a company staying founder-led “is severely limiting and a single point of failure.” He does not appear to be taking his own advice as he continues on as Square CEO (now named Block).
Read the full article at TechCrunch+
“What to expect from your lead investor”
For a startup CEO, having a trusted lead investor is vitally important- like one that is willing to swim in potentially shark-infested waters alongside you. Betakit shares 5 tips for how startup CEOs can build strong relationships with their lead investors.
Tech & Innovation Key Contacts
Canadian Technology Constituents
High-Growth Canadian SaaS – Ceridian, 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, Calian, Celestica, Computer Modelling Group, Farmers Edge, Sierra Wireless, TECSYS, WeCommerce
Small Cap Canadian Tech – Alithya, Baylin Tech, BBTV, Blackline Safety, Kneat, MindBeacon, Optiva, Pivotree, Quarterhill, Sangoma, Sylogist, Terago, Vecima, Vitalhub
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