Skip to main content
Open this photo in gallery:

MindBeacon's Sam DubocHandout

Telemedicine startup MindBeacon Holdings Inc. is set to begin trading on Friday on the Toronto Stock Exchange after raising $65-million in its initial public offering.

The five-year-old Toronto company – led by veteran Bay Street financier Sam Duboc – sold 8.125 million shares to investors at $8 each, three sources familiar with the deal told The Globe and Mail. That’s at the top end of its initial $7-to-$8 price range. The company received about $400-million worth of orders from prospective investors, more than six times the final offering size, the sources said. The Globe is not identifying the sources because they are not authorized to comment publicly on the matter.

The company filed last week to go public amid a surge in demand for digitally delivered health services and technology stocks since the start of the pandemic.

MindBeacon, which provides mental-health therapy over the internet through its Beacon service, originally set out to raise $50-million. TD Securities and Credit Suisse Securities are leading the offering, with Bloom Burton and Co., Canaccord Genuity Group Inc., Beacon Securities and Echelon Wealth Partners rounding out the underwriting syndicate.

On Wednesday, in the face of brisk demand, the company and its underwriters increased the target size of the offering to $60-million, the sources said. On Thursday, they upsized the target size again, to $65-million – or 30 per cent higher than the original goal, the sources said. Underwriters will have the right to buy another $10-million worth of shares at the offering price, while some existing shareholders, including Telus Corp., could also sell some shares alongside the offering.

MindBeacon will have 23.6 million shares outstanding at the opening bell on Friday.

The company set out this year to raise $30-million from private investors, but shifted course to raise a larger amount from public investors given the strong performance of tech stocks, including successful TSX IPOs by Nuvei Corp. and Dye and Durham Corp. MindBeacon had previously raised $38-million from backers including Green Shield Canada, Manulife Financial Corp. and Telus.

Widespread sheltering at home during the pandemic has translated into significant growth for companies that deliver online health care, prompting a rush of investment into the sector. Canada’s two largest telemedicine service providers, Dialogue Technologies Inc. and Maple Corp., have each raised tens of millions of dollars this year and Dialogue has explored going public. Prices for shares of TSX-listed Well Health Technologies Corp., which also provides virtual health care services, have more than quadrupled this year.

Mr. Duboc, who co-founded private equity firm EdgeStone Capital Partners as well as Air Miles parent LoyaltyOne Co., has been open about his past struggles with depression. In a letter included with MindBeacon’s prospectus, Mr. Duboc explained how the sudden death of his brother in 2011 led him to become “deeply depressed.” He struggled to find a good therapist and felt “stigma and discomfort with each appointment.”

Mr. Duboc wrote that he and his spouse, Claire, who co-founded MindBeacon, “feel that mental health care should be more accessible, and this idea started our journey that eventually led to MindBeacon.”

The Dubocs teamed up starting in 2015 with CBT Associates, a private Toronto provider of cognitive behavioural therapy to treat people with mental-health issues, including anxiety, depression and post-traumatic stress disorder – a form of treatment that Mr. Duboc has said helped him. They later formed MindBeacon to develop a digital service for patients to access practitioners remotely. CBT co-founder Peter Farvolden is chief science officer.

MindBeacon’s services are provided by Telus Corp., Rogers Communications Inc. and Maple Leaf Sports and Entertainment Ltd., among others, to their employees. Insurers including Blue Cross, Manulife, Green Shield Canada and SSQ Insurance have sponsored free access to online clinical psychologists through Beacon during the pandemic.

Revenues in the nine months ended Sept. 30 were $6.6-million, up 86 per cent from the same period in 2019. The company is looking for funds to broaden its care offerings, hire sales and marketing staff, expand to the United States and beef up its data analytics and artificial-intelligence capabilities.

Your Globe

Build your personal news feed

Follow the author of this article:

Follow topics related to this article:

Check Following for new articles

Interact with The Globe