VANCOUVER — After a blockbuster year for initial public offerings in 2021, the pace of new listings in Canada’s innovation economy slowed dramatically this year. By the end of the third quarter, the Toronto Stock Exchange saw a single IPO in the tech, cleantech and life-sciences sectors, as many firms that planned to go public this year sat on the sidelines amid an uncertain economy.

Companies that had been readying for IPOs continue to face economic headwinds—inflation remains high, interest rates are still rising and Russia’s war in Ukraine rages on. Here’s what some of them plan to do next year:

Leaning toward yes

Zafin, a Vancouver-based fintech that provides a product-and-pricing platform for banks and credit unions, intends to hold an IPO in 2023, said founder and CEO Al Karim Somji in a statement to The Logic. The company has spent the last year positioning itself for an IPO, and has invested strategically into product development, entering new markets and other business expansion plans, he said.

“We’re closely monitoring the global economy and are prepared to adjust our timing in response to market behaviour,” he said, noting macroeconomic trends must be moving in the right direction, including having inflation under control and interest rates trending lower. “We’re in a comfortable position to monitor how the market behaves and will be ready to execute the next stages of our growth as soon as the timing is right.”

Unclear road ahead

Vancouver-based Hootsuite, which provides a social-media management platform, was reportedly planning a $200-million IPO on the TSX in December 2021. It delayed those plans as market conditions for new tech listings became choppy, saying it anticipated a 2022 listing, which to date has not occurred. Instead, like many tech firms this year, Hootsuite trimmed headcount partly to extend runway. In August, it cut 30 per cent of staff and in November a further five per cent. “We have always maintained that going public is one potential strategy, but only if and when it is in the best interest of Hootsuite, our people and our shareholders,” wrote spokesperson Chrisanna Chan in an email, declining further comment. 

Hopper, a Montreal-based provider of a travel-booking app, was reportedly planning an IPO in 2022. The travel startup had to overcome industry-wide obstacles during the pandemic, yet managed to grow, adding a home-rental booking service and reaching a US$5-billion valuation in early 2022—more than six times higher than it was during the early months of COVID-19. Next year, it aims to get its processes and systems “public ready,” wrote spokesperson Ellie Breslin in an email, noting that doesn’t mean it will hold an IPO next year. “We will become public when we think it’s the best thing for our customers and our business.”

Clio, a Burnaby, B.C.-based legaltech, started to offer payment processing in October 2021, ahead of an anticipated public offering to occur by spring 2023. In January 2022, when it hired former Clearco chief financial officer Curt Sigfstead as CFO, CEO Jack Newton said the company was ready to file at “a moment’s notice.” When asked in mid-December, though, the company declined to provide an update. “In light of the current economic situation, including the ongoing recession and inflation, we are continuing to prioritize the long-term growth and sustainability of our business,” wrote spokesperson Juliet Mafua in an email. “This means that we are carefully considering all of our options and making decisions that are in the best interest of our company and our stakeholders.”

IPO no longer a go

Some companies have scrapped their go-public plans entirely. Vancouver-based Article, which sells modern furniture online, had been planning to hold an IPO on the Nasdaq as early as January 2022. But it postponed those plans until later in the year amid a New Year tech sell-off, and remains in a holding pattern. Currently, “we have no plans or need to consider a public offering,” said CEO Aamir Baig in a statement. The company has been built to grow through its own resources, he said, and would consider an IPO only “if it was the right thing to do, at the right time, for the business and its stakeholders.”

For Mississauga, Ont.-based PointClickCare “an IPO is never off the table,” wrote co-founder and CEO Dave Wessinger in a statement. But “there are no plans to pursue the public markets at this time,” he said, despite the company dangling the possibility nearly eight years ago. In January 2021, the cloud-based health-care software provider announced that affiliates of private-equity firm Hellman & Friedman had taken a minority strategic stake in it, while Dragoneer Investment Group increased its investment. The company believes Hellman & Friedman “will be a strong resource to support our growth path,” said Wessinger, adding that the company remains in a strong financial position.

Beyond 2023

Trulioo, a Vancouver-based ID-verification firm, was two years out from an IPO as of June and CEO Steve Munford told The Logic in a recent interview that it remains on track. There are three reasons a company goes public, he said: to raise capital, to provide shareholders liquidity or to create a currency for acquisitions, meaning paying for a deal at least in part with stock. But Trulioo doesn’t need money, has patient investors and isn’t certain that public shares are a great currency for acquisitions at the moment, he said. “I think most companies aren’t considering 2023, unless they have an urgent need to raise capital or get liquidity.” The company will wait for the right conditions before listing, he added, namely, stability in public markets.

GeoComply, the Vancouver-based provider of geolocation compliance solutions, is targeting a U.S. IPO in the next few years, co-founder and CEO Anna Sainsbury in a statement to The Logic. As many of its customers are based in the U.S., GeoComply is inclined to list on an American exchange. But even as she described a public offering as “inevitable,” Sainsbury said the company would take a considered approach. “When and where,” she said, “remain to be seen.” 

Telus has not been shy about its plans to spin out its fast growing Telus Health and Telus Ag divisions via an IPO, much like it did with Telus International. However, the company, which did not respond to a request for comment, has not disclosed a timeline. Telus continues to assess the future potential of both divisions and continues “to build assets of consequence,” said Doug French, chief financial officer, during a February 2022 quarterly earnings call with analysts. Timing of any possible IPO will be a strategic decision, he said.

Instacart, a grocery delivery app founded by University of Waterloo alumnus Apoorva Mehta, has long considered an IPO, but the road has been bumpy. The company has repeatedly delayed plans, and this year it slashed its valuation. In May, it reportedly backed out of an offering after filing confidential documents to start the IPO process. Instacart declined to comment, but pointed to a Wall Street Journal article that quotes an internal memo from the company’s CEO Fidji Simo. In the note to employees, Simo said that the IPO market is “closed.” While the company does “not need a perfect market,” she added, “we’re just looking for an open market window.”