Toronto-based investor relations (IR) software company Q4 has filed a preliminary prospectus as the firm looks to go public on the Toronto Stock Exchange (TSX).
Q4 plans to go public via an initial public offering (IPO). The number of common shares Q4 plans to sell, as well as its common share price, have not yet been determined. The company plans to trade under the symbol ‘QFOR.’
CIBC Capital Markets, National Bank Financial, and Credit Suisse Securities will act as the transaction’s joint bookrunners. Other underwriters on this IPO include Canaccord Genuity, Raymond James, RBC Capital Markets, Stifel Nicolaus Canada, TD Securities, and INFOR Financial.
Q4 is a global provider of cloud-based IR and capital markets solutions. The firm’s offerings reach across websites, virtual events, corporate access, data and analytics, customer relationship management (CRM), and capital markets intelligence. Q4 claims its platform is used by 2,400 public companies, including half of the S&P 500’s constituent companies, with more than 12 million investors using it every month, as of March 31, 2021.
Founded in 2006 and led by CEO Darrell Heaps, Q4 has raised several rounds of funding, with its last major investment being a $25 million credit facility from CIBC Innovation Banking last year. Prior to that, the company’s last venture round consisted of $35 million USD in Series C funding. The firm is headquartered in Toronto and has offices in New York, and London, England.
In its preliminary prospectus, filed today, Q4 said it plans to use the net proceeds from this offering to repay its debts related to credit facilities, which total $20.8 million. The IPO proceeds will also allow Q4 to pursue its growth strategies and make new acquisitions.
The prospectus noted that Q4 saw “exceptional growth” last year, driven by strong demand for its core offering, and the firm expects this growth to continue in 2021. Q4’s revenues totalled $40.4 million USD in 2020, up 80 percent from $22.4 million USD in 2019.
Last year, 90 percent of the company’s revenues were recurring and came from subscriptions. Total annual recurring revenue also grew from $25.2 million USD in 2019 to $42.6 million USD in 2020.
The company is not yet profitable but said it sees a “clear path to profitability” as it continues to scale. Q4’s net loss in 2020 totalled approximately $13 million USD, according to the prospectus.
“We aim to be the leading capital markets communications platform for corporate issuers, with a growing buy-side and sell-side customer base,” the prospectus stated. “As such, we believe we have a unique opportunity to continue to grow our revenue meaningfully and achieve profitability over the next several years as our products respond to complex issues facing professionals across the entire capital markets ecosystem.”
The company plans to grow by investing in its products, as well as its sales and marketing teams. Q4 noted that any acquisitions the firm “may” make in the future could also improve its organic growth.
Q4 joins a swarm of Canadian tech startups that have filed to go public this year. Other major companies that have recently sought to list on the TSX include Thinkific, which recently closed a $184 million IPO, and Magnet Forensics, which began trading in late April.