An IPO isn’t the only way to go public.
While we wait, fingers-crossed, for the dam to burst on Canada’s tech IPO scene, unveiling the Hootsuites and Shopifys and Desire2Learns to the world, a number of interesting companies have been trickling into the market, mostly in the form of CPCs and Qualifying Transactions.
These aren’t, to be sure, $100-million plus revenue companies, but many are part of a new wave of techs who operate with business models that simply didn’t exist five years ago, much less the last time tech was this relevant. They’re helping to fill a demand for innovation that has been a major theme of the Canadian markets for the better part of two years.
We give you five of the most interesting new or newer listings on the TSX Venture Exchange, listed by current market cap, highest to lowest.
1. EXO U (TSXV:EXO)
Market Cap: $183.9-million
EXO U is a disruptive recurring revenue model company in the education and enterprise verticals, says Mackie Research Capital analyst Nikhil Thadani. In a research report to clients in late August, Thadani initiated coverage of EXO U with a “Speculative Buy” recommendation and a one-year target price of $6.00, implying a return of 52% at the time of publication. Thadani says the trend that sees students and teachers using their own devices in the classroom is a global one. He cites one report that says the market opportunity for software solutions facilitating classroom software could now total $4-billion annually. The analyst thinks EXO U is naturally positioned to capitalize on this trend.
2. Slyce (TSXV:SLC)
Market Cap: $47.7-million
Slyce, which went public through a reverse merger with Oculus Ventures this past summer, is the second notable firm out of Calgary-based Business Instincts Group, which also spawned Urthecast. The company raised $12-million for its image-based search technology which the company hopes will impact retail in a big way. Slyce recently bought “BuyCode Inc., the company that developed the Pounce image-recognition-based shopping app, for (U.S.) $5-million. CEO Mark Elfenbein’s comment on the deal explained his company’s business model. “We are consistently looking to add and perfect the functionality we can offer major retailers with the Slyce visual search platform,” he said. “Through integrating the technologies, we can offer our retail partners an almost seamless discovery-to-purchase process for their customers — whereby consumers can go from seeing an item in the real world to purchasing that item from the retailer’s inventory in literally a few clicks.”
3. Smart Employee Benefits (TSXV:SEB)
Market Cap: $31.2-million
Markham-based Smart Employee Benefits is focused on a market it says it worth $60-billion: healthcare claims processing and group benefit solutions. The company listed on the TSXV in 2012 as the Qualifying Transaction of Whiteknight Acquisitions Inc. and has grown through a series of acquisitions. For the quarter ending May 31, 2014, Smart Employee Benefits recorded a loss of $1,183,017 on revenue of $5.75-million, up from the $3.29-million topline the company posted in the same period a year prior. The company says it plans to achieve profitability in fiscal 2014 with a continued focus on acquisitions.
4. AcuityAds (TSXV:AT)
Market Cap: $24.96-million
Real time ad buying player AcuityAds went public this past summer, raising $5.75 million with Paradigm Capital Inc. and include Clarus Securities Inc. and Euro Pacific Canada Inc. The company sees itself at the bleeding edge of a revolution in the advertising business. “Traditional advertising focused on creating messages and pushing them out to a broad audience, say women aged 24 to 54, and hoping something stuck,” said co-founder and CEO Tal Hayek recently. “Today, Acuity uses proprietary technology to engage one on one with consumers around products that are interesting and relevant to them. Our technology allows advertisers to track the key metrics that matter most to them, all the way from the initial ad impression through to impact on sales.”
5. Intema Solutions (TSXV:ITM)
Market Cap: $5.4-million
Montreal’s Intema Solutions is an online marketing firm with a timely story. The company’s permission-based marketing solutions help companies navigate not only the tricky business of modern data, targeting and SEO, but manage it in the confines of an environment that is defined by Canada’s new anti-spam regulations. Though the company’s revenue is small, it managed to generate a profit of $107,515 in its recently reported second quarter, on revenue of just $480,409.
Tags: CVE:AT, CVE:EXO, CVE:ITM, CVE:SEB, CVE:SLC