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News

Ad-exchange tech firm Sharethrough files for TSX IPO

VANCOUVER — Sharethrough, a Montreal-based advertising-exchange technology firm, has filed to go public on the Toronto Stock Exchange, following a relatively quiet period for Canadian tech filings.

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Ad-exchange tech firm Sharethrough files for TSX IPO

By Aleksandra Sagan
A TSX sign board in Toronto in December 2018. Photo: The Canadian Press/Frank Gunn
Oct 4, 2021
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VANCOUVER — Sharethrough, a Montreal-based advertising-exchange technology firm, has filed to go public on the Toronto Stock Exchange, following a relatively quiet period for Canadian tech filings.

The company, which plans to trade under the symbol STRX, did not disclose in its filings Monday how much money it is looking to raise or the target price per share. If the underwriters—RBC Dominion Securities, National Bank Financial, Scotia Capital and some undisclosed institutions—exercise their over-allotment option, some of the company’s founders and management will sell some of their shares in a secondary offering.

Talking Point

Sharethrough, a Montreal-based advertising-exchange technology firm, has filed to go public on the Toronto Stock Exchange. It did not disclose how much it is looking to raise, but plans to use the funds to fuel its growth, including an international expansion.

In 2013 CEO JF Cote founded a company called District M out of a basement apartment in Montreal “to create a true digital company to simplify and scale the digital advertising ecosystem for all of its stakeholders,” according to Sharethrough’s preliminary prospectus. He refocused the business as the COVID-19 pandemic depressed ad spending, and, this March, merged it with Sharethrough USA, another ad-exchange company, to create what it called “one of the largest independent omnichannel and omniformat ad exchanges in the world.” The combined company now has 134 employees, including 71 in Canada, as of June 30. “Since our combination, we are a scaled, growing and profitable player in the digital media ecosystem, driven by a shared vision based on technological innovation and a human-centric approach to advertising,” Cote wrote in a letter included in the prospectus.

Sharethrough bills itself as a “profitable tech company.” For the 12 months ended June 30, it reported a net income of about US$7.6 million with nearly US$59 million in revenue. For the year ending Dec. 31, 2020, it reported a net loss of roughly US$2.2 million with about US$48 million in revenue.

In its second quarter this year, Sharethrough said it served on average about 22 billion publisher ad requests and more than 160 billion transactions daily across about 23,000 active websites and apps. Its publisher partners included Vox, Vice, Billboard, Rolling Stone and Newsweek. In that quarter, its advertising partners included IBM, Disney, Starbucks and Amazon. (Sharethrough has also worked with Postmedia, which is an investor in The Logic.)

The company’s principal shareholders include individuals like the CEO, as well as institutions like Fonds de solidarité FTQ and Investissement Québec.

The company declined to comment to The Logic beyond the information provided in public filings.

Sharethrough’s filing follows Vancouver-based Copperleaf, a decision-analytics software company. It filed for a $125-million offering in September, anticipating to price shares between $11 and $13 each. That ended a quiet period for IPOs on the TSX for Canadian tech firms after a frenzied few months that saw a mixed reception on the public markets, with some companies putting their go-public plans on hold or scrapping them altogether.

The company’s prospectus says it is focused on the end user—the person viewing the advertisements. “We have built our platform around the idea that when ads fit in more naturally to the user experience, they perform better—people more often see them, read them, and comprehend them.”

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Programmatic advertising uses software to buy digital ads rather than human interactions and negotiations. Sharethrough operates a real-time platform that allows advertisers, media agencies and brands to access publishers’ advertising inventory and create campaigns on its ad exchange or, sometimes, on private marketplaces. The platform incorporates artificial intelligence to generate higher-quality bids and create better-performing ads. It supports multiple ad formats, such as native and video, and may expand in the future to include audio and virtual reality ads, among other things. The company charges a variable-dependent percentage revenue share on ad spend. It also generates revenue by executing these campaigns for clients.

Sharethrough plans to use some of the funds raised to strengthen its financial position, serve as working capital and pursue further growth, according to the prospectus. Its growth plans include adding more publishers, expanding in Europe in 2021 and continuing to build out its presence in the Asia-Pacific region in the coming years, and further developing its technology and product. Sharethrough also plans to pursue strategic acquisitions to help it grow its technology and enter new markets.

#Fonds de solidarité FTQ #Investissement Québec #IPOs #Sharethrough

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Photo: The Canadian Press/Frank Gunn

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