Q4 Inc. pauses plans for $150 million public offering on Toronto Stock Exchange

Toronto-based investor relations (IR) software company Q4 Inc. has paused its planned initial public offering on the Toronto Stock Exchange (TSX).

A spokesperson for Q4 confirmed to BetaKit the company has paused its plans to go public and declined to provide any additional comment. As first reported by The Globe and Mail, the decision followed a planned debut on the TSX, through which Q4 hoped to raise $150 million CAD.

Q4 first filed to go public in May, looking to trade under the symbol ‘QFOR.’ It priced its offering in June, and, with the plans to raise $150 million, had to potential to reach a market capitalization of almost $700 million. The company planned to use the proceeds from the IPO to repay its debts related to credit facilities, which total $20.8 million, pursue its growth strategies, and make new acquisitions.

Q4 offers cloud-based IR and capital markets solutions that reach across websites, virtual events, corporate access, data and analytics, customer relationship management (CRM), and capital markets intelligence. Its platform is used by approximately 2,400 public companies, including half of the S&P 500’s constituent companies, with more than 12 million investors using it every month. Its customers include Netflix, Visa, McDonald’s, Walmart, Square, Shopify, and Nike.

The company’s prospectus noted Q4 saw strong demand for its offering last year, with revenue jumping 80 percent to $40.4 million USD. Q4 did experience a net loss in 2020 of $13 million USD and is not yet profitable. In its prospectus for the public offering, the company said it sees a path to profitability as it continues to scale.

The decision to pause its IPO is not related to issues attracting investors or closing Q4’s offering on its desires terms, according to The Globe.

The offering’s joint bookrunners included CIBC Capital Markets, National Bank Financial, and Credit Suisse Securities, and underwriters include Canaccord Genuity, Raymond James, RBC Dominion Securities, Stifel Nicolaus Canada, TD Securities, and INFOR Financial.

Q4 is the second Canadian tech startup to adjust its public market plans amid the recent surge in IPOs. In May, Vendasta opted to not go public after filing for a $100 million offering, instead, raising $119.5 million CAD in venture funding from private investors. The move came amid reports that Vendasta was struggling to sell its offering as part of a cooldown in investor demand for Canadian tech IPOs.

Q4’s paused plans also come as other Canadian companies are making similar moves or experiencing downward pricing for IPOs. The list includes Burlington, Ontario-based cleantech firm Anaergia and Power Corp. subsidiary LMPG Inc. While companies like Thinkific Labs have met success in the public markets, other Canadian tech companies that have recently been part of the IPO surge have seen stocks prices fall, including MindBeacon, BBTV, and Dialogue.