VANCOUVER — Toronto-based Q4, a software firm which counts Walmart, McDonald’s and Netflix among the users of its cloud-based investor-relations platform, has filed to go public on the Toronto Stock Exchange.

The firm sees billions of dollars in global opportunity for its service amid industry trends, including a shift to virtual investor relations thanks to the COVID-19 pandemic. The initial public offering has yet to be priced, but the firm plans to trade under the symbol QFOR. “The number of common shares to be sold and the price per common share have not yet been determined,” wrote Q4 spokesperson Karen Greene in an email to The Logic. She declined to provide further comment. 

“Becoming a great public company has been an objective of ours for many years,” wrote founder and CEO Darrell Heaps in a letter included in the company’s prospectus. “The time to partner with public investors to execute on our growth strategy is now.”

Q4 hopes to become the world’s largest capital-markets-communications platform. It connects public companies, investment banks and investment managers for functions including investor relations and research. Its cloud platform helps corporate investor-relations teams build and manage websites, host virtual events and view analytics. Its platform also offers services to both sell-side and buy-side customers. “If you have visited a public company’s investor relations website or joined an earnings call in recent years, you have likely used Q4’s software,” Heaps wrote in the letter.

It is the latest in a string of Canadian tech companies going to the public markets. Toronto-based information-technology company Softchoice filed earlier this month for its return. The company, which first went public on the TSX in 2002 before going private in 2013, is looking to raise $350 million.

The filings come after a run of successful Canadian tech offerings in late 2020 and early 2021, then some apparent waning interest that ensnared Canadarm maker MDA, which raised 20 per cent below its target at the start of April, and Vendasta Technologies, which has not updated its filings since reportedly considering downsizing its $100-million IPO.

The market has since picked back up. Thinkific, a Vancouver-based online-course platform, debuted on the TSX in late April with a roughly $1-billion valuation.

Q4’s principal shareholders are Heaps and Ten Coves Entities, the latter of which also holds stakes in 7shifts and TouchBistro. The two shareholders’ stakes were not disclosed.

The joint bookrunners offering the common shares are CIBC World Markets, National Bank Financial and Credit Suisse Securities Canada. The underwriters are Canaccord Genuity, Raymond James, RBC Dominion Securities, Stifel Nicolaus Canada, TD Securities and Infor Financial, along with the bookrunners.

According to the prospectus, Q4 is not yet profitable, and its losses have grown in recent years. In the year ended Dec. 31, 2020, it reported a net loss of roughly US$13.1 million, up from about US$11 million in 2019 and nearly US$8.3 million in 2018. For the three months ended March 31, 2021, the company saw a net loss of almost US$12.3 million, up from about US$2.4 million in the same time the previous year. It attributes the losses to “substantial investments we made to grow our business.”

Its revenue, however, has been growing steadily. In its 2020 financial year, it recorded almost US$40.4 million in revenue, up from US$22.4 million in 2019 and US$17.3 million in 2018. Nearly 90 per cent of its revenue in 2020 was recurring from subscriptions. It attributes its revenue growth to new customers, including those it added through acquisitions.

Q4 now has almost 2,400 customers including its backlog, wrote Heaps, up from about 1,000 in 2018. By the end of March 2021, half of the S&P 500 had used its platform for their capital-markets investor-relations programs, and about 500,000 investors had attended Q4-hosted virtual events each quarter, according to the prospectus. Q4 maintains the profiles of about 350,000 institutional investors, their firms and underlying funds.

Heaps still sees big growth ahead for the firm. The prospectus claims structural changes, including fee compression and changing investor preferences, are disrupting the capital markets, and participants want technology that allows them to scale cost effectively by using data to drive decisions. Public companies are becoming more proactive in finding shareholders, and there is a demand for better capital-markets data, the prospectus says. There’s also the impact of COVID-19, which “appears to have permanently shifted the way interactions, particularly meetings, are being conducted” and “has accelerated the speed of virtual-event adoption across all meeting types,” according to the filing. 

Q4 believes hybrid digital and in-person solutions will become the norm in a post-pandemic world. It estimates there are about 41,500 public companies worldwide, from which it projects a market opportunity of about US$13 billion annually, at its price point. It sees another US$5-billion annual opportunity for its service on the sell side, and US$2 billion a year on the buy side.

It plans to invest in sales and marketing and expand into Western Europe, Australia, Asia and South America. It’s also eying “strategic, accretive acquisitions” in what it calls a fragmented market. “We believe we are well positioned to become the consolidator in this industry and that our platform can benefit from strategic acquisition opportunities,” including additional data sources and customers. 

Along with expanding its customer base and pursuing acquisitions, Q4 plans to use the money it raises from the offering to repay about US$20.8 million in debt.