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CEO Brendan King and COO Jacqueline Cook atop Vendasta's main office in Saskatoon.

Kayle Neis/The Globe and Mail

Saskatoon-based Vendasta Technologies Inc. has filed a preliminary prospectus to go public on the Toronto Stock Exchange, joining a rush to public listings by Canadian early stage technology companies unseen since the dot-com boom.

Vendasta, which sells digital tools such as marketing automation, customer relationship management and billing software to companies that serve small businesses, is the first to file to go public from the trio of software companies advancing toward IPOs profiled by The Globe and Mail earlier this month.

“Our vision is to be the operating system of choice for channel partners and [small and medium-sized businesses],” chief executive officer Brendan King said in a letter in the prospectus. “We are here to democratize technology for SMBs and let them compete with the big players.”

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Its offering is being led by CIBC World Markets, National Bank Financial and TD Securities. Other underwriters on the deal are Bank of Montreal, Canaccord Genuity, Desjardins and Paradigm Capital.

A source familiar with the transaction said the company is looking to raise about $100-million in the offering. The Globe and Mail is not identifying the source as they are not authorized to speak about the matter.

The company’s top shareholders are Vancouver venture capital firm Vanedge Group, with a 31-per-cent stake prior to the IPO, and Business Development Bank of Canada’s venture-capital group, with 29 per cent.

According to its prospectus, Vendasta earned $42.6-million in revenue last year, rising 23 per cent in each of the previous two years. It has 43,000 registered “channel partner” customers, 2,681 of whom are paying. It lost $14.8-million in 2020, compared to a $9.1-million loss in 2019.

Vendasta’s public filing is expected to be followed in short order by cybersecurity software maker Magnet Forensics Inc. of Waterloo, Ont.; and Vancouver-based Thinkific Inc., a provider of software for businesses to sell online courses; both of which have confidentially filed documents with regulators to go public. Several other Canadian technology companies have also tested public markets in recent months, including Winnipeg’s Farmers Edge Inc., an agriculture technology provider that completed its IPO earlier this month, and Montreal telemedicine company Dialogue Health Technologies, which filed to go public last week.

Vendasta secured the largest venture-capital investment ever by a Saskatchewan tech company in 2019 and has experienced steady growth since a short-term lull early in the pandemic. The company had 445 employees as of Dec. 31.

The rush of Canadian software IPOs is a marked departure from the previous decade, when new issues were rare. By early 2020, Canadian tech companies were increasingly avoiding or delaying going public because they had ready access to private capital at attractive valuations.

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But the pandemic brought renewed interest, particularly in companies that do business over the internet in areas such as e-commerce and payments, health care, workplace communications and training. Skyrocketing stock market valuations meant companies could raise money at more attractive valuations publicly that private investors were offering.

The two largest software IPOs in Canadian history, by Nuvei Corp. and Telus International (Cda) Inc., have happened since September. But while many issues were met with a warm investor response, tech stocks have been hit with volatility in recent weeks, raising questions about the market’s continued tolerance for riskier names.

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