CIBC Tech & Innovation Market Update – October 2020

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

A line graph showing Canadian technology sector performance and valuation

 
EV / NTM revenue multiples 1 LTM sector price performance 1
A bar graph showing EV / NTM Revenue Multiples. High-Growth Canadian SaaS was 16.7x, Large Cap Canadian Tech was 4.1x, Mid Cap Canadian Tech was 3.7x, Small Cap Canadian Tech was 2.5x. LTM sector price performance bar graph: High-Growth Canadian SaaS, 124.6%. Large Cap Canadian Tech, 20.6%. Mid Cap Canadian Tech, 33.2%. Small Cap Canadian Tech, 24.2%.

Source: FactSet and Pitchbook; as at October 30, 2020; in C$ unless otherwise noted.
1 Please refer to the back page for technology group constituents.

 

Canadian Venture Capital market update

$245M

(vs. $311M in September-20)
Aggregate deal value

32

(vs. 23 in September-20)
Number of deals

$15M

(vs. $16M in September-20)
Avg. deal value

Ontario

($183M / 21)
Most active province ($ / #)

 

FinTech

(46.6% of funds raised)
Most active sector(s)

 

Noteworthy Canadian deals

Company Size Sub-sector Lead investors
Wealthsimple logo C$114M FinTech TCV logo
Knowledgehook logo US$20M Software London-based EdTech investment fund
AddEnergie logo C$53M Software MKB logo
 

T&I @ CIBC

IPO announcement – CIBC Global Investment Banking

BBTV - $172 million IPO, October 2020

BBTV – $172 million IPO

Priced on Oct 22, 2020, BBTV is a digital media platform helping content owners distribute and monetize their content. The proceeds were used to buy out a controlling shareholder’s stake.

Deal announcement – CIBC Innovation Banking

chronometriq - $5 million growth capital, October 2020

Chronometriq Inc. – $5 million growth capital

Chronometriq’s platform enables full-cycle appointment management for clinics and patients with tools such as online appointment booking services, automated reminders and access to telemedicine. Chronometriq recently acquired Health Myself as part of its growth strategy, and will use this financing to support its plans for further growth across North America.

apptegy - undisclosed growth capital, October 2020

Apptegy Inc. – Growth financing

Apptegy is a leading omni-channel communication platform designed to help schools connect with students and parents. Headquartered in Little Rock, Arkansas, the additional capital will be used to support the firm’s strategic initiatives and growth into new regions.

Vapotherm - US$52 million, Growth Capital, October 2020

Vapotherm Inc. – US$52 million growth capital

Vapotherm is a global medical technology company focused on the development and commercialization of its proprietary high velocity therapy, which is used to treat patients of all ages suffering from respiratory distress. Vapotherm will use the funding to repay its existing revolving loan facility and term loan facility.

Crunchbase, Undisclosed, Growth capital, October 2020

Crunchbase Inc. – Growth capital facility

Crunchbase helps professionals find new business opportunities by combining private-company data with powerful prospecting software. Salespeople, entrepreneurs, investors, and market researchers use Crunchbase to help them tap into the private company market.

 

Podcasts

 

Technology & Innovation in‘sites’ with CIBC Equity Research

T&I ‘Bits & Bytes’

A red vector drawing of a bar graph

Q3 e-commerce activity remained elevated

In our “opening up” series, we revisit global web traffic to ecommerce and consumer discretionary websites for August, September and the beginning of October.

A red vector drawing of a globe

Primed for success – early prime day returns highlight bright e-commerce future

Early results from Amazon’s two-day ‘Prime Day’ event are in, and the rapid shift towards e-commerce remains in full force.

A red vector drawing of blocks

Q3 VC funding review – hot software market leads to high VC investment levels

While the emergence of a second wave of COVID-19 has driven the market off recent highs, venture capital appears to have been operating at full speed in the third quarter.

A red vector drawing of a shield with an exclamation mark on it

Anti-competitive concerns – long-awaited report hammers big tech

The report contains a number of findings on the market power of Amazon, Apple, Facebook, and Google with a conclusion that the companies had leveraged their dominance to eliminate competition and reduce innovation.

 

Recent technology news

“What social media companies have fixed since the 2016 election”

“On the eve of the next US presidential election, it is fair to say that the platforms have come a long way in acknowledging and taking steps to address the most blatant of those abuses. What isn’t yet clear is how much of a difference those steps will make.”

Read the full article at Medium.

“The 2020s promise better tech solutions to humanity’s biggest problems”

“While humanity’s problems have never been greater, our tools have never been better.”

Read the full article at Tech Crunch.

“SPAC to the future: how blank-check acquirers could reshape emerging companies’ roles in public markets”

“The SPAC phenomenon is set to reshape the role of high-growth, venture-backed companies in public markets in profound ways.”

Read the full article at Crunchbase.

“Telehealth, telemedicine, and telecare explained”

“When most of us think about healthcare, we think of visits to the emergency room or a general practitioner. That is because the norm for us, as the patient, is to leave our home to meet the doctor at a healthcare facility of some kind. But things are changing.”

“Big tech continues its surge ahead of the rest of the economy”

“While the rest of the US economy languished earlier this year, the tech industry’s biggest companies seemed immune to the downturn, surging as the country worked, learned and shopped from home.”

Read the full article at New York Times.

 

Tech & Innovation Key Contacts

Roman Dubczak
Deputy Chair
Kathy Butler
Vice Chair and Head of CIBC Capital Markets – B.C.
Ryan Voegeli
Managing Director and Head of Consumer, Industrials and Telecommunications
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
Robert Rosen
Managing Director, Innovation Banking
Julia Kassam
Managing Director, Innovation Banking
Paul McKinlay
Executive Managing Director and Co-Head
Amy Olah
Managing Director, Head of Canada & US West Coast Venture Banking, Innovation Banking
Eric Laflamme
Managing Director, Innovation Banking
Joe Timlin
Managing Director, Innovation Banking
Daniel Lee
Managing Director, Technology & Innovation, Global Investment Banking
Rob Magwood
Managing Director, Equity Capital Markets
Stephen Redding
Managing Director and Head

Canadian Technology Constituents

High-Growth Canadian SaaS – Ceridian, Descartes, Docebo, Kinaxis, Lightspeed, Shopify

Large Cap Canadian Tech – Altus, Blackberry, CGI, Constellation Software, Enghouse, Evertz Technologies, OpenText, Real Matters

Mid Cap Canadian Tech – Absolute Software, Calian, Celestica, Computer Modelling Group, Dye & Durham, Sierra Wireless

Small Cap Canadian Tech – Alithya, Baylin, Blackline Safety, Converge Technologies, Optiva, Patriot One, Quarterhill, TECSYS, Terago, Sangoma, Sylogist, Vecima, Vitalhub

RELATED INSIGHTS: Tech & Innovation Market Update

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