2017 has been a definite success for tech in Canada, says Michael Kousaie, Head of Business Development at the TSX, and we should expect more of the same from 2018, as there’s a healthy stable of private Canadian companies getting primed to go public in short order.
Sure, 2017 will not be remembered as quite the new listings barnburner that was 2016, where a whopping 41 tech companies were newly listed on the TSX and TSX Venture exchanges, but this year is still a bright spot for Canadian tech and tech investment, says Kousaie, who attended the SAAS North conference held this week in Ottawa.
“It’s all pushing in the right direction,” says Kousaie in conversation with Cantech Letter. “We’ve seen 30 new tech companies go public this year, both big and small cap, and when I look at the private companies here in Canada, these companies are not merely good in their city or good in their province, they are good in Canada and good internationally.”
“All of that bodes well for what goes on in the public markets because we’ve got more mature companies getting ready for the TSX,” says Kousaie. “The groundwork has been laid really well.”
It’s been a busy year for the TMX Group, operators of the TSX and TSX Venture, as they’ve been trying to grow their brand internationally, setting up new offices in Silicon Valley and Tel Aviv, all the while dealing with a homemade controversy surrounding Canada’s burgeoning marijuana industry. In October, TMX announced it would delist any companies that held operations in the United States, where cannabis is still a Schedule 1 controlled substance, a move that caused marijuana companies like big-player Aphira (which has investments in Florida and Arizona) to take a hit in their stock prices and to effectively place their future on the Canadian equity exchanges in question. TMX, which has said their position is being taken in the name of clarity and compliance, has promised to release a review on the issue in December.
On the tech side, Kousaie says TMX is fully committed to keeping the good news flowing, as the sector continues to make up a larger piece of the investment pie in Canada. “The tech sector has become increasingly important to Canada and it’s hugely important to the TSX,” says Kousaie. “We do a whole lot to support companies even before they even consider listing, things like [SASS North] that we’re sponsoring. This kind of education is key to building great companies and inspiring the next generation of companies.”
Only two years old, SASS North has grown to premier event status for Software as a Service companies and executives, this year boasting over 1,200 attendees, 400+ companies and 75 exhibitors.
Kousaie says that he’s witnessed a healthy maturing of the tech sector in Canada over the past half decade, one that’s only going to bear more fruit in 2018 and beyond.
“Look at the quality of private companies right now, look at the amount of venture capital coming in, the exits that are starting, this is all allowing businesses to mature further,” he says. “I think it’s easy to forget that although tech companies can scale quickly, it’s rarely overnight. Things that were started five years ago, we’re only starting to see the real impact now.”
“The trend has been fantastic,” Kousaie says.