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Coveo Solutions Inc. priced its $215-million initial public offering at the top end of its proposed $13-to-$15-a-share price range after receiving more than $1-billion worth of orders from investors, according to two sources. It’s a strong showing for a new Canadian technology issue on the Toronto Stock Exchange after a string of disappointing public listing efforts by Canadian technology companies this fall.

The Quebec City-based enterprise software company, led by serial entrepreneur Louis Têtu, confirmed in a press release early Thursday the pricing at $15 a share, several hours after the Globe and Mail reported the amount. The offering values the company at about $1.7-billion at issue. The offering is co-led by BMO Nesbitt Burns, Merrill Lynch Canada, RBC Dominion Securities and UBS Securities Canada. . The underwriting team also includes Canaccord Genuity, National Bank Financial, Scotia Capital, TD Securities, Oppenheimer & Co. Inc. and Samuel A. Ramirez & Company.

The Globe and Mail is withholding the identity of the sources because they are not authorized to discuss the matter publicly. Coveo filed to go public and revealed the price range and deal size this month. Coveo shares are set to start trading Thursday under the symbol CVO.

It has been an underwhelming fall for Canadian tech IPOs on the TSX. Three of the past four technology companies to go public this fall on Canada’s senior exchange – D2L Corp., E Automotive Inc. and Q4 Inc. – subsequently traded below their issue prices. Montreal online advertising company Sharethrough this month delayed plans to go public in response to the soft market reception for Canadian tech IPOs.

Coveo will be the 20th Canadian tech IPO on the TSX to raise $50-million or more since July, 2020. By contrast, there were 12 Canadian tech IPOs on the TSX in the 11 years ended December, 2019. Despite the record year for public and private fundraising by Canadian technology companies, the public-markets performance of pandemic-era new issues has lagged overall markets.

Coveo sells artificial-intelligence-powered technology known as “insight engines” to more than 475 customers, including BlackBerry, Salesforce, Lee Valley, BRP and Xero, that offer the same kind of personalized, relevant search results on their websites as those powered by Google or Amazon.

Market research firms Forrester and Gartner rank Coveo as one of the global industry leaders, alongside France’s Sinequa SAS. Coveo last month paid US$42.9-million for London-based Qubit Digital, which provides software used by retailers and consumer products makers including Kate Spade, LVMH and Estée Lauder to provide personalized product recommendations and gather customer insights on their e-commerce sites.

The 625-person company’s main outside shareholders are U.S. investment giant Elliott Management Corp., the labour-sponsored Fonds de solidarité FTQ, the Quebec government’s Investissement Québec investment arm, sovereign wealth fund Qatar Investment Authority and Ontario Municipal Employees Retirement System.

The 57-year-old Mr. Têtu invested in Coveo in 2008, four years after its founding. He joined as chief executive officer in 2012 at the request of co-founder, president and chief technology officer Laurent Simoneau, the same year Mr. Têtu’s previous company, Nasdaq-listed Taleo Corp., was purchased by Oracle for US$1.9-billion.

Mr. Têtu was joined by Jean Lavigueur, the chief financial officer, and chief operating officer Guy Gauvin, who have worked with him on several previous companies dating to 1990.

Coveo was the latest in a string of IPO-bound Canadian software companies to come forward with a relatively soft combination of revenue growth and operating profitability, which some market observers have told The Globe and Mail muted demand for previous offerings.

Coveo generated revenue of US$37.7-million in the six months ended Sept. 30, up 23.1 per cent from the same period a year earlier. The company’s revenue grew by 16.9 per cent in its last full fiscal year, which ended March 31, 2021, and 25.1 per cent in the year before that. Meanwhile, it posted operating losses equal to 37.4 per cent of revenue, 31.7 per cent and 25.7 per cent, respectively, in the corresponding periods. About 85 per cent of its business is in the United States .

Despite that, one of the sources said investors responded well to Coveo’s experienced management team and the fact it derives its subscription revenue from large, stable enterprises, primarily through contracts lasting three or more years. The company also has a net expansion rate of 113 per cent, meaning it manages to successfully expand revenue by increasing contract sizes with existing clients.

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