Sharethrough postpones TSX debut amid Canadian tech IPO market struggles

tsx

Montréal-based Sharethrough has postponed its initial public offering (IPO) on the Toronto Stock Exchange.

The ad exchange company first filed its prospectus in October with an offering that consists of between 3.9 million and 5 million common shares priced within the range of $15 and $19. If the over-allotment option was exercised in full, Sharethrough had the opportunity to collect about $86.25 million CAD in gross proceeds.

“We have the luxury to be able to say ‘no’ to go into the public now and be able to evaluate when will be the right time we’re ready to go.”

JF Cote, co-founder and CEO of Sharethrough, said the decision came from “adverse and challenging current market conditions, especially for technology companies.”

“We just need the right window,” he said in an interview. “Unfortunately, the window right now is not a good time to take our boat to the open sea.”

Cote cited the decision as entirely related to a difficult moment in the public market, citing the recent disappointing debuts of D2L and Q4. He told BetaKit Sharethrough is confident in its investors, and has the privilege to pause its IPO plans due to strong financials currently.

“We know that we have a very good financial profile. We have the luxury to be able to say ‘no’ to go into the public now and be able to evaluate when will be the right time we’re ready to go,” he said.

Cote noted that Sharethrough generated $60 million USD in revenue in the last 12 months, has $16 million of EBITDA, and holds $25 million in the bank.

Sharethrough’s decision to hold off on its TSX debut follows a recent trend of Canadian tech companies reducing the size and pricing of IPOs.

Investor relations SaaS provider Q4 first filed to go public in May but paused its IPO plans to restart the process in June, making its debut in late October. Q4 then decreased its target to $100 million via the sale of 8.3 million common shares priced at $12 each. Q4’s IPO closed on October 29.

Edtech company D2L also reduced the size and pricing of its planned IPO. Along with E Automotive, D2L began trading on the TSX last week.

The results did not deter Coveo, which this week filed for its own TSX debut. The Québec-City based company operates in a different market from the likes of D2L, Q4, and E Automotive, offering SaaS solutions for the advanced search engines market.

It also remains to be seen how the Canadian tech IPO results will affect Hootsuite, which sources have indicated to BetaKit plans to file to go public before the end of the year.

RELATED: Hootsuite plans to IPO before Christmas, raise $200 million on TSX

Sharethrough continues to assess the IPO market for now and Cote expressed interest in moving forward with a public offering at a later date. However, the company is also open to raising capital through the private markets. Similar to how Saskatoon-based e-commerce SaaS startup Vendasta put its IPO on hold after filing to go public on the TSX in March, and later raised $119.5 million in venture funding.

Cote emphasized that Sharethrough’s decision to postpone its IPO doesn’t come from lack of interest as it has “great investors in the book.”

“The problem for us was that … we agree it isn’t the right time,” he said. “We have a good financial profile to decide when is the right time versus companies who need to go public to raise capital.”

Sharethrough was created earlier this year through a merger between Montréal-based District M and San Francisco’s Sharethrough. The combined entity consists of over 140 employees across eight offices in Canada and the United States, with its headquarters in Montréal.

The company generates revenue through its programmatic advertising and managed services business lines, offering a platform that provides advertisers, media agencies, and brands with the ability to access the advertising inventory of publishers, and execute programmatic campaigns. On the managed services side, Sharethrough also facilitates campaigns on behalf of advertisers, agencies and brands.

With files from Meagan Simpson

This story has been updated with comment from Sharethrough CEO JF Cote

UPDATE 08/11/21: This article previously incorrectly noted Sharethrough’s revenue as $16 million, it has since be updated to reflect the correct number.

Charlize Alcaraz

Charlize Alcaraz

Charlize Alcaraz is a journalism student at Ryerson University and the business and technology editor at The Eyeopener, Ryerson's largest independent newspaper.