Droneify, an Oakville, Ont.-based drone-solutions provider, has filed for a US$6-million initial public offering on the Nasdaq in a rare IPO by a Canadian innovation-economy firm since a near-freeze in the markets.

Droneify, which did not respond to a request for comment, expects to price shares between US$6 and US$7, according to its prospectus filed Feb. 22 with the U.S. Securities and Exchange Commission. It would trade under the symbol DRFY on the Nasdaq Capital Market, a tier that focuses on early-stage companies with lower market capitalizations.

The filing comes as IPO activity worldwide dipped from a frenzied 2021. Last year, only one firm from the tech, cleantech or life-sciences sectors went public via an IPO on the Toronto Stock Exchange. Many of those that had planned to do so sat on the sidelines, awaiting better economic conditions. But there’ve been recent signs things may be picking up.

According to its filing, Droneify expects to raise about US$4.8 million in gross proceeds, up to US$5.6 million if underwriters exercise their full over-allotment option. It plans to use the bulk of the funds raised as working capital and for general corporate expenses. The filing says it will also commit funds to product development, and sales and marketing—US$830,000 and US$340,000, respectively, if it raises the larger amount.

The company envisions itself as a one-stop shop for firms looking for an affordable entry point into drones. “Our plan is to provide one platform with all the hardware, insurance, and software features needed to start, run, or grow a drone business,” according to its prospectus. “Through financial and insurance partners, we will offer comprehensive services for rent-to-own hardware, low monthly fee insurance, and software.”

Founded in 2015, Droneify was previously known as the Sky Guys. While it remains headquartered in Oakville, the company registered in the Cayman Islands in August 2022. It had two full-time and three part-time staff as of the end of June.

The company currently earns revenue through field services, such as inspections of hard-to-reach assets or short-range aerial surveys. 

It has been building a data analytics and management platform that it aims to launch in the second quarter of this year to diversify its revenue streams. It plans to charge commission and subscription fees for the platform. Droneify said that, in the future, it will earn money through training fees, drone hardware sales and subscriptions to software-as-a-service products.

Droneify serves customers in oil and gas, wind energy, electrical infrastructure, real estate, mining, construction, and media and entertainment, mostly located in the U.S. and Canada. Its clients have included Shell, RBC and GM, according to its website, but historically, one or a handful of clients have made up the bulk of Droneify’s sales. In 2021, Aerodyne Measure, a Washington, D.C.-based drone-solutions provider, accounted for about 80 per cent of its revenue. In the six months ending June 30, its revenue base appeared more diverse, with three clients making up 38 per cent.

Droneify has not been profitable in the years for which it provided financial information, though its losses have narrowed. In 2020, it recorded a net loss attributable to shareholders of roughly US$590,000. In 2021, its net loss totalled roughly US$160,000. For the six months ending June 30, 2022, it reported a net profit of nearly US$15,000, compared to a net loss of about US$165,000 in the same six months the previous year.

The company said it requires a large amount of cash to grow its business as it focuses on product development—some US$15 million over three years, according to its filing, to cover R&D and bring products to market.

The company has not raised significant venture capital funding. Most recently, it closed a $250,000 round in October 2022 from Toronto-based Ventioneers and undisclosed investors, according to PitchBook. In 2016, it raised $350,000 from undisclosed angel investors, per PitchBook, and a further $500,000 from unnamed investors and Nicole Verkindt. Verkindt, now the CEO of grocery-delivery firm Buggy, is also listed as an adviser at Droneify on its website. She said in an email to The Logic that she was an early-stage investor and adviser, but has not been actively involved for at least five years. Ventioneers did not respond to a request for comment.

Droneify also owes $60,000 under the federal government’s Canada Emergency Business Account program, which offered interest-free loans to small businesses during the COVID-19 pandemic. 

In late 2018, when still operating as the Sky Guys, the firm attempted to go public on the TSX Venture Exchange as a qualifying transaction with capital-pool company Hoist Capital. Though shareholders approved the transaction, it was cancelled in early 2019, with Hoist saying it “will not be proceeding.”