CIBC Tech & Innovation Market Update – September 2024

Canadian technology sector performance and valuation

Source: FactSet and Pitchbook as at August 30, 2024; in C$ unless otherwise noted. 
1 Please refer to the end of the document for technology group constituents.

Canadian venture capital market monthly recap

August 2024

Aggregate deal value

$103M
(vs. $1.57B in Jul-24)²
YTD: $3.93B
(vs. $3.48B YTD-23)³

Number of deals

34
(vs. 42 in Jul-24)
YTD: 312
(vs. 662 YTD-23)

Avg. deal value

$7M
(vs. $60M in Jul-24)²
YTD: $24M
(vs. $9M YTD-23)³

Most active province by value ($ / #)

Ontario
($60M / 17)
YTD: Ontario
($2.02B / 154)

Most active province by count ($ / #)

Ontario
($60M / 17)
YTD: Ontario
($2.02B / 154)

Most active sector

Software
(92% of funds raised)
YTD: Software
(73%)

2 19 deals in Aug-24 and 16 deals in Jul-24 with no announced values are omitted from deal values.
3 145 deals in YTD-24 and 264 deals in YTD-23 with no announced values are omitted from deal values. 

Noteworthy Canadian deals

Company Size Financing round Sub-sector Lead investors
Viggle AI US$19M Series A AI Andreesen Horowitz
CruxOCM US$17M Series A Co-Pilot Tech M12
BinSentry US$15M Series B Supply Chain Spring Mountain Capital

T&I @ CIBC

Deal activity

Learning.com

Undisclosed
Growth Capital
CIBC Innovation Banking acted as Sole Provider

Learning.com - Growth Capital

CIBC Innovation Banking has provided growth capital to Learning.com, a leader in helping K-12 students develop healthy relationships with technology to enhance academic outcomes and improve interpersonal relationships. The funding will enable Learning.com to accelerate its mission of equipping students with the essential digital skills through organic growth and strategic acquisitions.

Boosted.ai

$10 Million
Growth Capital
CIBC Innovation Banking acted as Sole Provider

Boosted.ai – $10M Growth Capital

CIBC Innovation Banking provided $10 million in growth capital to Boosted.ai, a Toronto-based company that uses AI to automate investment management processes and increase productivity.

Wemolo

Undisclosed
Debt Financing
CIBC Innovation Banking acted as Sole Provider

Wemolo- Debt Financing

CIBC Innovation Banking provided a debt financing package to the German tech company Wemolo. Wemolo specialises in digital parking lot solutions using license plate recognition, and is active on more than 2,500 properties across Europe.

Andgo Systems Inc.

Undisclosed
Growth Capital
CIBC Innovation Banking acted as Sole Provider

Andgo Systems Inc.

CIBC Innovation Banking provided growth financing to Andgo Systems Inc., a market leader in workflow automation solutions for dynamic absence onboarding, shift filling, and vacation mapping in complex, high volume industries.

In the news

CIBC announced the launch of two new AI-driven tools, CIBC AI for team members, and GitHub CoPilot for its developer community, to put more tools in the hands of CIBC team members to deliver on the bank’s client-focused strategy. CIBC AI is a custom-built GenAI tool that provides bank’s workforce to automate regular recurring tasks and focus their time on higher-value, client-centric activities. CIBC also announced today that it has selected GitHub CoPilot for a broad rollout to the bank’s developers. GitHub CoPilot assists developers by providing code suggestions, automating repetitive tasks, and enhancing overall coding efficiency. This tool has proven to be invaluable in accelerating development cycles and improving code quality, making it an essential asset for our developer community.

Read the full report on Newswire

For the first quarter of 2024, Quebec was the leading province for VC investments. Despite the introduction of new French language laws, which has some investors worried about the province’s ability to attract and retain laws, the province’s low cost of living and high quality of life remain a big draw for talent, and its strong network of universities, research institutes, and investors make it enticing for big tech.

Read the full report on Betakit

Technology & Innovation in‘sites’ with CIBC Equity Research

T&I 'Bits and Bytes'

Tech ties – Kamala Harris’ history with the tech sector

With Kamala Harris officially accepting the Democratic nomination at the Democratic National Convention (DNC), we brushed up on the current Vice President’s history with the tech industry. While Harris has been silent so far on what the antitrust environment might look like if she were to be elected president, we can perhaps gain insights from her years as California attorney general as well as her term as Vice President. Based on her professional track record, Harris seems more willing to work alongside big tech when it comes to regulation compared with other candidates. We’re careful to note that her reputation for working with stakeholders does not necessarily mean Harris is ‘tech friendly’; the Democratic nominee also has a long history of holding corporations accountable. As attorney general, Harris famously blocked AT&T’s buyout of T-Mobile’s US operations, and is also known for bringing a lawsuit against eBay alleging anticompetitive hiring practices.

Monopoly money – Google ruled a monopolist in landmark antitrust case

In mid-August, a US judge ruled that Google violated antitrust law, creating an illegal monopoly to become the world’s default search engine. US District Judge Amit Mehta issued his final ruling on August 5 stating, in rather direct words, that Google has violated Section 2 of the Sherman Act and that “Google is a monopolist, and it has acted as one to maintain its monopoly.” Google reportedly paid $26 billion in 2021 alone to ensure its search engine remained the default on smartphones and browsers, effectively pricing out all other competition, and Google has controlled ~90% of the online search market on desktop and smartphones for the last decade. The ruling marks the first big win for federal authorities attempting to tackle Big Tech’s market dominance, and could set the stage for a tougher battle for Apple, Amazon and Meta who also face upcoming antitrust cases.

Savvy startups – Canadian tech startups receiving significant backing

Two major Canadian private financing rounds were announced during the same week in July, highlighting that while public tech valuations continue to sag, private tech companies and AI startups can still command premium valuations. Clio, a Canadian legal tech startup, earned a valuation of $3B, or 15x annual recurring revenue (ARR) after raising a record $900MM in a funding round. On the AI front, Cohere raised another $500MM and increased its valuation to $5.5B, or a stunning ~150x sales based on the latest data available.

Recent technology news

Canada’s digital services taxes, which was first proposed in 2020 and was implemented just this year, imposes a tax of 3% on revenues earned through digital services from Canadian users under certain conditions – largely affecting US tech companies. The Biden administration has requested trade settlement consultations with Canada, adding that the “discriminatory” tax appears inconsistent with Canada’s North America trade deal obligations.

Read the full article at Reuters

Following months of Musk feuding with Justice Alexandre de Moraes, a Brazilian Supreme Court panel unanimously upheld its decision to block X, after the platform failed to name a local legal representative. Justice de Moraes has taken issue with X’s laxed regulation of users, with X becoming a major platform for far-right activists that look to overturn President Luiz Inacio Lula da Silva’s election. Allegedly, de Moraes hopes a local legal representative will exert leverage over the company by having someone to arrest if the Supreme Court wants to enact changes to the platform.

Read the full article at AP News

To sustain this artificial intelligence boom, there is huge demand for more sophisticated chips that can train AI models faster and connect with smartphones and satellites while still protecting people’s private data. As the global chip race begins, here are four trends to look out for.

Read the full article at MIT Technology Review

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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
Executive Managing Director and Co-Head
Amy Olah
Managing Director, Head of Canada & US West Coast Venture Banking, Innovation Banking

Canadian Technology Constituents

High-Growth Canadian SaaS
  • Ceridian
  • Copperleaf
  • Coveo
  • Descartes
  • Docebo
  • Kinaxis
  • Lightspeed
  • 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
  • Blackline Safety
  • Optiva
  • Pivotree
  • Quarterhill
  • Sangoma
  • Sylogist
  • Terago
  • VerticalScope
  • Vitalhub
  • Voxtur

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