CIBC Tech & Innovation Market Update – March 2021

Welcome to the official newsletter of CIBC’s Tech & Innovation Capital Markets group

A curated monthly report to keep our readers abreast on relevant and recent developments within the Canadian tech ecosystem.


NOTE: Our Technology & Innovation Conference 9.0 on May 12 and 13 is open for registration. Please see attached for the invitation to join.

 

Canadian technology sector performance and valuation

 
EV / NTM revenue multiples 1 LTM sector price performance 1

Source: FactSet and Pitchbook; as at March 31, 2021; in C$ unless otherwise noted.
1 Please refer to the back page for technology group constituents.

 

Canadian Venture Capital market update

$654M

(vs. $746M in February-21)
Aggregate deal value

38

(vs. 36 in February-21)
Number of deals

$20M

(vs. $25M in February-21)
Avg. deal value

Ontario

($76M / 16)
Most active province by count ($ / #)

British Columbia

($502M / 8)
Most active province by value ($ / #)

Software

(87.4% of funds raised)
Most active sector(s)

 

Noteworthy Canadian deals

Company Size Sub-sector Lead investors
US$350M Software
US$25M FinTech
C$30M Retail
 

T&I @ CIBC

Deal announcement – CIBC Global Investment Banking

Optiva – $25 million equity financing

Optiva is a global leader in cloud-native revenue management software to the telecom industry.

Deal announcement – CIBC Innovation Banking

JMI Equity – Capital call line of credit

JMI Equity is a growth equity firm focused on investing in leading software companies.

Practice Ignition – Growth capital financing

Practice Ignition is the leading client engagement, revenue and payment platform for accountants. The software facilitates the creation of proposals, payments, insights, scope management, and integrations for accountants to engage with their clients

MayStreet Inc. – $10 million credit facility

MayStreet’s market data technology delivers the highest-quality, most complete global market data to enable data-driven decision-making. Combining ultra-low latency software with consolidated, top-of-book and full depth-of-book data, MayStreet empowers its clients – including the sell side, buy side, vendors, regulators and academics – to gain deeper insights to drive investing, trading, execution analytics and compliance.

 

Podcasts

 

Technology & Innovation in‘sites’ with CIBC Equity Research

Software valuation monthly – March – SaaS names continue to give back 2020 gains

March was a tough month for software stocks, with the S&P software index trailing both the S&P 500 and the TSX during March.

Read the full article here.

Talent.com enhances the search for qualified candidates

Employment websites from LinkedIn, Indeed, Zip Recruiter and Talent.com (Talent) solve enterprise and SMB staffing needs by connecting them to the millions of job seekers who use their platform, and vice versa.

Read the full article here.

Big Tech organizes – fledgling labor activism at several firms

The rise of the tech industry has been mostly free of large-scale pushes for organized labour.

Read the full article here.

A year of shopping safely – how the pandemic is changing online commerce

As North America reaches the depressing milestone of a full calendar year in a COVID-impacted environment, we now have access to datasets that capture a full year of the virus’ impact.

Read the full article here.

Back-to-back hacks – Microsoft email server attack highlights SMB vulnerabilities

News of another widespread data breach made headlines as a cyberattack on the Microsoft Exchange Server infected tens of thousands of US entities.

Read the full article here.

Lightspeed’s churn risk remains manageable despite a challenging FQ4

While the pace of the vaccine roll-out varies across the U.S., Australia, and Germany, new virus cases have slowly declined across all three regions. This provides a glimmer of hope, and particularly so for the restaurant industries of Germany and the US.

Read the full article here.

Software valuation monthly – the dark days of February

The headwinds facing software markets in January continued into February as an increase in rates at the long end of the curve put additional pressure on richly valued equities sectors.

Read the full article here.

Stay informed. Request access to CIBC Capital Markets Research Central here.

 

Recent technology news

“What we got wrong about Uber and Lyft”

“Uber and some transportation experts once predicted that getting a ride with the tap of an app would help reduce traffic and increase riders’ use of public transportation. Instead, the opposite happened.”

Read the full article at The New York Times.

“5 years after the Oculus Rift, where do VR and AR go next?”

“A lot’s happened since Facebook’s first headset brought virtual reality to the masses. Facebook might have been a first mover, but it also wants to be the last one.”

Read the full article at Wired.

“Everything you need to know about vaccine passports”

“The Biden administration says it’s leaving digital vaccination records up to states and the private sector.”

Read the full article at Vox.

“The hybrid office is here to stay. The shift could be more disruptive than the move to all-remote work.”

“The post-vaccine workplace is taking shape, and for many it’s going to be a hybrid model, allowing more remote work but with clear expectations that some days a week will be in the office.”

Read the full article at The Washington Post.

 

Tech & Innovation Key Contacts

Roman Dubczak
Deputy Chair
Kathy Butler
Vice Chair and Head of CIBC Capital Markets – B.C.
Emilie Bissonnette
Managing Director, Global Investment Banking
Frazer Wong
Executive Director, Technology & Innovation, Global Investment Banking
Mark McQueen
President and Executive Managing Director, Innovation Banking
Mark Usher
Executive Managing Director, Innovation Banking
Robert Rosen
Managing Director, Innovation Banking
Julia Kassam
Managing Director, Innovation Banking
Paul McKinlay
Managing Director, Innovation Banking
Amy Olah
Managing Director, Innovation Banking
Eric Laflamme
Managing Director, Innovation Banking
Joe Timlin
Managing Director, Innovation Banking
Rob Magwood
Managing Director, Equity Capital Markets
Daniel Lee
Managing Director, Technology & Innovation, Global Investment Banking
Stephen Redding
Managing Director and Head

Canadian Technology Constituents

High-Growth Canadian SaaS – Ceridian, Descartes, Docebo, Kinaxis, Lightspeed, Shopify

Large Cap Canadian Tech – Altus, Blackberry, CGI, Constellation Software, Enghouse, Evertz Technologies, Nuvei, OpenText, Real Matters

Mid Cap Canadian Tech – Absolute Software, Calian, Celestica, Computer Modelling Group, Dye & Durham, Sierra Wireless

Small Cap Canadian Tech – Alithya, Baylin, BBTV, Blackline Safety, Converge Technologies, Optiva, Patriot One, Pivotree, Quarterhill, TECSYS, Terago, Sangoma, Sylogist, Vecima, Vitalhub

RELATED INSIGHTS: Tech & Innovation Market Update

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