Dax Dasilva publicly pondered the idea of taking Lightspeed private this week, saying reports of Nuvei’s potential buyout “makes you think.”
Dasilva’s comments are a sign of the times. Over the last few months, BetaKit has tracked a spate of public tech companies announcing private buyouts: Q4 Inc. delisting from the TSX in February in its go-private deal; American PE firms purchasing TrueContext and mdf commerce, while Figure 1 sold to a medical news and education platform.
Will Lightspeed be next? “Dax’s views that the company is always open to go-private discussions isn’t so surprising in light of several other recent transactions, but we still think it’s the status quo for the time being,” Scotiabank analyst Kevin Krishnaratne told BetaKit.
Still, more than 35 Canadian tech companies IPO’d from 2020 to 2021, and the majority of these are trading below their IPO share price, according to Laura Lenz, partner at OMERS Ventures. “This under-market trading performance (sometimes up to 60%) causes the board and management to consider a strategic review process – alternatives that could include a strategic acquisition or a going private transaction,” she said.
Part of the reason smaller-cap tech businesses are either going private or considering it has to do with the high interest rate environment (more on that in last week’s newsletter) and mega-cap firms “sucking the air out of the room,” said ATB Capital Markets analyst Martin Toner.
Lenz said she expects more startups to follow suit over the next couple of quarters. Meanwhile, as tech companies remain relatively cheap and “unloved by public market investors” for now, it’s an opportunity for PE firms to leverage, Toner said.
‘Til next week,
Bianca Bharti
Newsletter Editor
TOP STORIES OF THE WEEK
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Learn more about emerging tech’s impact on financial innovation.
From AI to biometrics, emerging technologies are set to transform all industries – especially in finance and payments. With this innovation, we can unlock growth, boost productivity, and improve quality of life, but how do we navigate, adopt, and tap into its potential?
We sat down with Mastercard Canada’s SVP of Product and Solutions, Darrell MacMullin for a BetaKit Live fireside conversation to discuss how emerging tech, open banking, and evolving cybersecurity challenges are set to impact the future of financial innovation.
Watch the BetaKit Live here.
WonderFi responds as shareholders Kaos Capital, Mogo push for board overhaul
Shareholders of Toronto-based WonderFi are calling for “urgent change” to the cryptocurrency firm’s board of directors, claiming that the Toronto Stock Exchange-listed company has underperformed despite a strong crypto market in part due to the makeup of its board.
In response, WonderFi has alleged that one of the firms behind these claims is “engaged in an attempt to gain control of WonderFi without paying a premium to shareholders.”
Yesterday, Miami’s Kaos Capital issued a statement indicating that the hedge fund management firm, Vancouver-based FinTech company Mogo, and other investors (a group Kaos said collectively represents 22 percent of WonderFi’s shareholders) are demanding that WonderFi’s “entrenched and disorganized” board be replaced.
Ontario Budget 2024 tops up existing funds, innovation centres, supports healthtech procurement
In recent years, Ontario has advanced various innovation-related policies, with budgets that have only lightly touched on tech. Budget 2024, tabled March 26 amid continually challenging economic conditions, offered some more of the same. Ontario, which expects to see slower growth, inflation, and higher interest rates take a toll on its economy this year, has put off balancing the budget until 2026 and prioritized investments in infrastructure and healthcare.
Notman House is for sale. A startup-led effort wants to buy it back
Guiker, a rentals-focused real estate startup, is proposing a fractional ownership model to buy back Notman House. The company, along with roughly 30 other investors, plans to make an offer today, BetaKit has learned.
“The vision really is to take Notman to the next level, in terms of what it was always meant to be, which was a community initiative,” said Nan Hao, founder and CEO of Guiker.
Guiker says its offer is nominally competitive with the current asking price of $5,495,000 CAD. Hao says they have reason to believe that higher offers will be presented, but that theirs is unique because community members will share ownership.
C100 launches new Growth Program to support later-stage companies
C100 has launched a new program aimed at supporting the growth of later-stage Canadian technology companies.
The new Growth Program is designed to address challenges faced by fast-growing tech companies in Canada, such as the scarcity of risk-tolerant capital, a lack of senior talent capable of assisting with global expansion, and insufficient personalized mentoring for the founders of scaling firms.
R-LABS, OCI call for a tech-first approach to solving Canada’s housing challenges
As part of an innovation agenda outlining steps the organization feels are needed to address challenges in Canada’s real estate sector, Toronto-based venture builder R-LABS has pledged to invest $1 million into early-stage startups working to solve some of these challenges.
Coinciding with the agenda released today, the Ontario Centre of Innovation (OCI) has also launched a construction-focused challenge that aims to speed up the building of homes in Ontario with innovative technologies and automation.
Funding, Acquisitions, and Layoffs
CGY – ZayZoon – $15M USD
TOR – RealSage – $5.5M CAD
TOR – Tofu – $1.2M CAD
MTL – Idealist Capital secures $50M from Canada Growth Fund
MTL – Dialogue acquires Koble
MTL – Flare acquired Foretrace
L’AS – Zone AgTech – $42M
The BetaKit Podcast
Can video games teach kids math?
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Mobius Math Club co-founder Steven Woods (ex-Eloqua, Oracle, and Benevity) explains how video games are actually a great educational tool, and why taking venture capital won’t help him scale.
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Feature image courtesy Elevate.
