Israeli companies are a good fit for the Toronto Stock Exchange, banker says

The TMX Group is trying to woo Israeli tech companies to list on the TSX and TSX Venture exchanges, a move that’s easily a win-win scenario, says Doron Cohen, CEO of Israel’s A-Labs Ventures, who claims that while not too many Israeli tech businesses are currently ready to go public, the tech-friendly investment scene in Canada is a real draw for Israeli firms.

Last week, the TMX Group sent a 12-member delegation to Tel Aviv to meet with local startups and tech businesses and to raise awareness about North American markets. The TSX already lists six Israeli companies but the plan is to push for more, especially in the tech sector.

“Israel is second only to California in terms of success in the tech space,” says Robert Peterman, VP of global business development of the Toronto Stock Exchange and Venture Exchange, to the Times of Israel. “If we want to be a relevant tech player,” Israel is the place to be, he said.

Cohen, who runs corporate advisory and banking firm A-Labs Ventures, took part in the four-day meet-up and says that TMX’s exchanges are a good fit for Israeli tech companies.

“We brought five of our portfolio companies to meet up with the TMX group in order to get a broader perspective on the process as well as present and pitch their businesses,” Cohen said in conversation with Cantech Letter, “and the TSX and TSXV have done a great job to help attract these international companies by providing them an easier process and entry level and are probably one of the best public venture exchanges geared at early or growth stage companies.”

At the same time, when asked whether there was a healthy bundle of Israeli companies ready to make the leap to being publicly traded, Cohen said that, at the moment, there isn’t. “Lots of companies in Israel are used to the private and VC route and the process that goes with it,” he said. “Going public is a big step and usually a more mature decision for most that tends to scare them away.”

The TSX’s supporters say that its middling size is actually a bonus on the international stage, effectively making it a good stepping stone for companies looking to get a foothold in the North American market, with an eye towards bigger exchanges like the NASDAQ down the line.

As further evidence of TMX’s international ambitions, they recently hired former Israeli high-tech CEO Yossi Boker as head of business development for Israel, saying that the move helps in the TMX’s goal of raising the profile of the Toronto equity exchanges on the world stage. Boker says that while even successful Israeli companies can find it challenging to get noticed on the NASDAQ amongst the bigger players like Google and Amazon, listing on the TSX and TSXV means they’ll get more exposure.

“Companies with a market cap of a few tens of millions of dollars, up to a few hundred of millions, will be well noticed [on the TSX and TSXV] and will get relatively strong analyst coverage and will be well noticed by the investor community, said Boker to the Canadian Jewish News. “The TSX and TSXV thus provide a very appealing value proposition to small- to mid-cap tech companies. Of course, when the companies grow and expand, they could dual-list on the NASDAQ if they so desire.”