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Technology Financings: The Window is Wide Open… But for How Long?

By Peter Traynor & Jeffrey Stanger of ITB Solutions

A credible pipeline for young, and not so young, technology companies has opened up in Canada over the past 18 months. Really, since December 2013 and January of 2014 when two pre-revenue technology companies were financed and listed on the Canadian Securities Exchange, the public markets have been welcoming technology ventures with open arms.

Both private capital and public have lined up for promising technology companies that have demonstrated the market appeal and the necessary wherewithal on the part of management to make undeniable risk look appealing to investors who are seeking alternatives to traditional investment sectors.

The Canadian Securities Exchange, self-billed as Canada’s “Stock Exchange for Entrepreneurs,” has seen year-to-date financings be led by the Technology sector by a wide margin. Technology has accounted for a full two-thirds of all financing -- dwarfing the next nearest defined sector, Mining, by 66% to 14%.

In 2014 there was a total of $153,760,998 in financings on the CSE with Technology accounting for &78,593,605 and mining at $36,477,831 followed up with Diversified Industries at $26, 517,467 and Oil and Gas at $12,172,094. As of June 26th of 2015 CSE companies have completed $86,398,793 in financings for 2015 with Technology companies raising $57,447,786, accounting for 66% of total financings. The remainder were from Diversified Industries at $13,783,904, Mining with $11,849,742, and Oil & Gas at $3,317,360.

The breakdown of technology financings is in three segments; Life Sciences with $22,293,139, Technology with $22,160,222 and Cleantech with $12,994,425.

Currently there are 46 technology companies on the exchange of the total 269 listed companies.

What gives? Most say it is an increasing appetite on the part of investors for non-traditional market segments, most prominent of which has been technology and bio-technology/life sciences. But whatever it is, it is showing no signs of let-up thus far, with recent go-public transactions such as The Mint Corp., Critical Outcome Technologies, Open Source Health and Cynapsus Therapeutics all obtaining financing recently.

Well managed technology companies throughout Canada are taking advantage of the current “open window” for public market financings. Windows open and close however; how long this one will remain open is a widely debated matter of opinion. But smart companies are, as they say, making hay while the sun shines. Long may it shine.

Contact us at the details below if you are interested in exploring your options.

Since 2005, ITB Solutions has provided listings development services to the Canadian Securities Exchange. CSE is the first new stock exchange approved in Canada by securities commissions in over 70 years and has also been designated by the Federal Department of Finance as an eligible stock exchange for RRSPs and TFSAs. We assist companies with the listing application and managing the process to become publicly tradable on CSE, as well as offering advice on how to make the most of your public listing. We also assist the exchange in marketing to potential public companies worldwide. You can reach Jeffrey Stanger at 647-500-0492 or by email at jeffrey@itbsolutions.ca and Peter Traynor at 647-500-0493 or by email at peter@itbsolutions.ca

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