Canadian investors as a whole are on the verge of discovering technology, says one portfolio manager.
Colin Fisher, Portfolio Manager and President of StableView Asset Management was on BNN this morning to talk about the emergence of technology in the Canadian capital markets.
Fisher says the sector rotation from mining and metals to innovation is still in its early stages.
“Most of our risk capital is focused on punching holes in the ground,” he said. “We haven’t quite figured out how to get into the technology space and our risk capital hasn’t quite pivoted there yet.”
Fisher says one example is Toronto-based electronic billing and payment processing company VersaPay (TSXV:VPY). The portfolio manager thinks it has better technology than its American peer Bill.com, which recently raised $50-million from tony investors such as from Silicon Valley Bank and DCM Ventures.
“That’s twice the market cap of VersaPay,” notes Fisher.
Fisher says VersaPay is quietly funding its cloud ambitions through its legacy business, instead of strapping on a huge amount of debt. He thinks it is flying under the radar of investors who are still pricing it based on its legacy business.
The portfolio manager says investors searching for a Facebook or Candy Crush in the Canadian tech landscape are looking in the wrong place. He says Canadian businesses are much more likely to be working behind the scenes, solving issues for other businesses.
“You see amazing tech companies in Toronto,” said Fisher. “They are unbelievably good. The strength of them is they focus on is business to business. We generally don’t do very well in the business to consumer facing marketplace, so when you look at a lot of these companies they are generally trying to solve a business problem.”