2021 Narwhal List tracks Canada’s notable exits, raises, valuations during pandemic year

The 2021 Narwhal List, which tracks Canada’s fastest-growing tech companies, has highlighted several significant deals and exits following an unprecedented year in Canadian tech.

A total of 51 companies are now on track to become Unicorns, more than a 20 percent increase from the 2020 list, which tracked 42 Unicorn status-bound firms.

“It takes many years to create a successful company and the growth we are seeing in the latest year is as a result of a long-term pattern of growth.”

Twenty-five companies on the 2021 list raised a total of over $1 billion, with the largest raise of the last year going to CSI Solar, which raised $260 million. In 2020, four companies from last year’s list went public and five were sold.

The Narwhal List, which is released in partnership with MaRS Discovery District, Communitech, and Invest Ottawa, ranks financially attractive companies according to “financial velocity.”

The metric is derived by the amount of funding a firm has raised, divided by the number of years the company has existed. The report also measures the rate at which a company raises and consumes capital to support its growth.

The Narwhal List identifies a set of private Canadian companies (meaning those that have not been acquired or have gone public) that are scaling successfully. Graduated companies are those that have exited through an initial public offering or acquisition, making them no longer eligible for the list. All monetary figures are in US dollars unless otherwise stated.

This year, the Narwhal List introduced a new metric to include companies that are scaling through bootstrapping. The “scale-up score” reflects the success a firm is having in scaling the business. The companies on this year’s list that achieved top scale-up scores included Kitchener-Waterloo-based ApplyBoard, Calgary-based Symend, and Vancouver-based Hootsuite, respectively.

There are two new Canadian Unicorns on this year’s list, including PointClickCare and ApplyBoard. These companies both join Coveo, which achieved Unicorn status in 2019.

In January, PointClickCare raised a strategic minority investment from Hellman & Friedman and existing investor Dragoneer Investment Group, giving the tech company a $4 billion valuation. PointClickCare ranked seventh in the Narwhal list in terms of financial velocity with a score of 60.4.

RELATED: Despite pandemic, Canadian VC investment remained high in 2020

Edtech startup ApplyBoard raised $170 million in Series C funding in 2020, with its initial $100 million giving the Kitchener-Waterloo firm its Unicorn status. ApplyBoard was the first-ranked company in terms of financial velocity with a score of 87.9.

Though not technically a Unicorn as it is publicly traded, Nuvei, which reached a nearly $3 billion valuation after listing on the Toronto Stock Exchange in the fall, was another Canadian tech stand-out.

“It takes many years to create a successful company and the growth we are seeing in the latest year is as a result of a long-term pattern of growth,” Charles Plant, the founder of the Narwhal Project, told BetaKit.

“Certainly there were companies such as Ritual that were negatively affected by the pandemic, but the negative COVID-19 impacts were really only felt in certain sectors of the economy such as travel, entertainment, and restaurants,” Plant added. “Others, such as e-commerce, were direct beneficiaries. So, on balance, we could continue to see strong growth even in such difficult times.”

The greatest number of companies on the list came from Toronto, with Vancouver and Montréal following. Startups from Calgary, Edmonton, and Kitchener-Waterloo featured prominently in this year’s list as well.

Computer technology continues strong trajectory

The Narwhal List tracks companies across three sectors: computer technology, healthtech, and cleantech. Over the last four years, the average financial velocity of computer technology companies on the Narwhal list has increased from $8.7 million to $15.6 million, while the number of companies on track to become Unicorns has grown from seven to 40.

“The computer technology sector continues to show strong growth and this growth is getting better every year.”

Of the 40 computer technology companies on track to become Unicorns, the top-ranked companies in terms of financial velocity and scale-up score are ApplyBoard, Symend, Hootsuite, and Toronto-based Wealthsimple.

Wealthsimple lost its Narwhal List eligibility in 2020, due to the revelation that investor Power Financial, collectively owned more than half of the company at the time. A $114 million CAD investment led by TCV gave the company a $1.1 billion valuation in October of last year.

“The computer technology sector continues to show strong growth and this growth is getting better every year,” said Plant. “I think that we are seeing the results of a long period of strategic investment in the sector, particularly by larger Canadian funds and the many US and foreign funds that are now investing in Canada.”

Despite positive momentum, Plant noted that computer technology companies raised less on average and in total in 2020 compared to the year prior. The average amount raised fell from $95 million to $36 million last year, while the total amount raised by computer technology companies fell to $551 million in 2020 from $2.1 billion raised in 2019.

It should be noted that Canadian VC investments set a new record in 2019, however computer technology companies still raised more in 2018 ($600 million) than in 2020.

Healthtech companies show less forward momentum

Healthtech was one of the sectors most dramatically impacted by the COVID-19 pandemic, not only due to the new demands for rapid testing and vaccines, but also the surge in demand for virtual healthcare solutions.

Among the healthtech firms on this year’s list are Toronto-based Deep Genomics and MedAvail, and Montréal-based Inversago Pharma. Five companies out of the ten raised an average of $39 million in the last year, and five are on track to IPO if they maintain their current trajectory.

The average raise for healthtech companies has fallen over the last three years, from $111 million in 2018 down to $38 million in 2020. This drop can also be seen in the total amount raised, which dropped from $429 million in 2019 to $194 million in 2020.

RELATED: How COVID-19 set the stage for a Canadian healthtech boom

Four companies also graduated from the list in the last year, including Chinook Therapeutics, Repare Therapeutics, Fusion Pharmaceuticals, which all went public, and Northern Biologics, which was acquired.

Plant said these healthtech Narwhals do not “show the same forward momentum” that computer technology companies do.

“These companies are exiting because of the very frothy market for tech IPOs,” said Plant. “I’m sure these entrepreneurs looked at the valuations they could achieve in public exits and compared them to the valuations they would have obtained in a later stage VC round and decided to take the public route. Whether this was the right move in the long term remains to be seen.”

Cleantech showing signs of potential

Among the list of Canadian cleantech Narwhals is Carbon Engineering, which recently launched a carbon removal purchase program with Shopify as its first buyer.

Other cleantech Narwhals include CarbonCure Technologies, Li-Cycle, and GHGSat, with GHGSat raising approximately $30 million in Series B financing last year.

Three out of the ten total cleantech companies on this year’s list raised an average of $117 million, and seven are said to be on track to IPO if they maintain their current trajectory.
Canadian cleantech companies raised a total of $265 million in 2020, more than double the $177 million raised in 2019. On average, cleantech companies raised $66 million last year, which is also higher than the $44 million average raise in the year prior.

Image courtesy ApplyBoard.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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