Montreal telemedicine company Dialogue Health Technologies Inc. has filed to go public on the Toronto Stock Exchange, testing investor appetites for new Canadian technology issues at a time when stocks of digital companies are under pressure.
Dialogue, which offers medical services over the internet, confirmed a Globe and Mail report from last month that the offering would be led by National Bank of Canada , Royal Bank of Canada , Bank of Nova Scotia and Toronto-Dominion Bank . The rest of the underwriting syndicate includes CIBC World Markets, Desjardins Securities, Canaccord Genuity , iA Private Wealth, INFOR Financial and Laurentian Bank Securities. Dialogue will trade under the ticker symbol CARE.
The five-year-old company has raised more than $100-million in venture capital to date from Sun Life Financial Inc. , National Bank of Canada, Power Corp. of Canada’s Portag3 Ventures, the Caisse de dépôt et placement du Québec, White Star Capital, HV Holtzbrinck Ventures and others.
Dialogue’s preliminary prospectus reveals it has experienced explosive growth, owing largely to the pandemic. Revenues from the company’s online health service in 2020 nearly tripled to $29-million from $10.1-million in 2019. That was up from was $4-million in 2018. The service is now available to 2.5 million Canadians and their dependants, offered through four of Canada’s five largest group insurers. Dialogue lost $20.5-million in 2020, compared with a $12-million loss in 2019.
Total revenue reached $35.8-million in 2020 after Dialogue last year purchased Argumed Consulting Group GmbH, a German provider of occupational health and safety services, and Optima Global Health Inc., a Canadian employee assistance program seller. Annual recurring revenues were at a rate of $60-million early this year.
Becoming a publicly-traded company ”will not change our No. 1 focus: facilitating the delivery of high-quality care to our members,” chief executive officer and co-founder Cherif Habib said in the company’s prospectus.
Valuations for public tech companies have skyrocketed since the start of the pandemic as people sheltering at home increasingly turned to online tools for shopping, workplace communications, training – and medical consultations.
The Globe and Mail first reported last summer that Dialogue was considering going public. Since then several Canadian tech companies have hired bankers or filed to go public. Many initially met with a warm investor response in what has shaped up to be the busiest period for IPOs since the dot-com boom. That includes the two largest tech IPOs in Canadian history, by Nuvei Corp. in September and Telus International (Cda) Inc. last month. MindBeacon Holdings Inc. , a smaller and earlier-stage company than Dialogue offering online mental-health services, raised $65-million in a highly oversubscribed IPO in December. Industry observers believe Toronto telemedicine startup Maple Corp. could also be a near-term IPO candidate.
But Dialogue’s proposed IPO is also coming into a tough market. Tech stocks have sustained sharp losses in recent days, including Shopify Inc. , which lost its standing as Canada’s most valuable company Monday to Royal Bank of Canada.
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