CPE Analytics analyzes venture capital (VC) backed initial public offerings (IPOs) since 2020. Their performance? Mostly abysmal.
With Canadian IPO market entering uncharted dark territories, any hope that VC-backed IPOs may pull the IPO market out of the prolonged slumber is hard to fathom.
There were 15 VC-backed IPOs since 2020, 12 on the Toronto Stock Exchange (TSX) and 3 on NASDAQ, only two of companies that had been taken private, have showed positive price changes.
10 IPOs, actively trading
10, down to 9 soon, IPOs are actively trading. None of them is trading above their IPO price. The best IPO is Copperleaf Technologies Inc. which is soon to be acquired for $12 per share, which will translate to a loss of 20% from its IPO price.
5 IPOs had $1 billion or more valuation at the time of their IPOs and none of them had $1 billion plus market cap as of June 28, 2024.
| Company | Principal VC | IPO Date | Currency | IPO Offering ($M) | IPO Price | IPO Valuation ($M) | Price (6/28/24) | Market Cap ($M, 6/28/24) | Price Change |
| Coveo Solutions Inc. | US Hedge Fund, CDN VC | 2021-11-24 | CAD$ | 215 | 15 | 1,548 | 7.79 | 883 | -48.07% |
| D2L Inc. | US VC, Institutional VC | 2021-11-03 | CAD$ | 150 | 17 | 899 | 11.29 | 304 | -33.59% |
| Copperleaf Technologies Inc. * | CDN Family Office, CDN VC | 2021-10-14 | CAD$ | 140 | 15 | 1,005 | 11.85 | 880 | -21.00% |
| LifeSpeak Inc. | CDN VC | 2021-07-06 | CAD$ | 125 | 10 | 476 | 0.38 | 23 | -96.20% |
| Anaergia Inc. | CDN VC | 2021-06-23 | CAD$ | 175 | 14 | 818 | 0.295 | 39 | -97.89% |
| Thinkific Labs Inc. | CDN VC | 2021-04-27 | CAD$ | 160 | 13 | 1,085 | 3.72 | 310 | -71.38% |
| Loop Energy Inc. | US Corporate VC | 2021-02-25 | CAD$ | 100 | 16 | 388 | 0.025 | 0.9 | -99.84% |
| Pivotree Inc | CDN Family Office | 2020-10-30 | CAD$ | 60 | 8.5 | 210 | 1.2 | 32 | -85.88% |
| AbCellera Biologics Inc. | US VC | 2020-12-15 | USD$ | 555 | 20 | 5,384 | 2.96 | 843 | -85.20% |
| Repare Therapeutics Inc. | US VC | 2020-06-23 | USD$ | 253 | 20 | 700 | 3.3 | 140 | -83.50% |
*to be acquired by Industrial and Financial Systems, IFS AB for $12.00 per share in cash for representing a total equity value of approximately $1.0 billion on a fully diluted basis.
5 IPOs, delisted and taken private
5 of the 15 IPOs have been delisted from the TSX or NASAQ as they have been taken private. Fusion Pharmaceuticals Inc. and Magnet Forensics Inc., which were taken private, were the only two IPOs with positive price change (up to delisting).
Fusion Pharmaceuticals Inc. and Magnet Forensics also were the only two companies with over $1 billion in total equity value or market cap.
| Company | Principal VC | IPO Date | Currency | IPO Offering ($M) | IPO Price | IPO Valuation ($M) | Acquired Price | Acquired Value ($M) | Price Change |
| Fusion Pharmaceuticals Inc. | US VC | 2020-06-30 | USD$ | 213 | 17 | 708 | 24 | 2,400 | 41.18% |
| Q4 Inc. | US VC | 2021-10-29 | CAD$ | 100 | 12 | 512 | 6.05 | 257 | -49.58% |
| Dialogue Health Technologies Inc. | CDN VC | 2021-03-30 | CAD$ | 100 | 12 | 779 | 5.15 | 365 | -57.08% |
| Magnet Forensics Inc. | Family Office, US VC | 2021-05-03 | CAD$ | 115 | 17 | 685 | 44 | 1,800 | 158.82% |
| MindBeacon Holdings Inc. | CDN Corporate VC | 2020-12-23 | CAD$ | 75 | 8 | 189 | 2.18 | 82 | -72.75% |
The Verdict
As comparison to the performance of VC-backed IPOs, the TSX and Nasdaq Composites reported simple price increase of 25% and 94% respectively over the period of January 1, 2020 to June 28/July 1, 2024.
VC-backed, specially Canadian VC-backed IPOs, have over the years approved to be under-performers, lagging severely behind composite indices.
US PE-backed IPOs have approved to perform much better. The trouble is that there is none in the near future.