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Sam Duboc, executive chair and chief executive officer of Toronto-based MindBeacon Group.Handout

Telemedicine startup MindBeacon Holdings Inc. has increased the size of its planned initial public offering by 20 per cent.

The company — led by veteran Bay Street financier Sam Duboc — filed last week to go public on the Toronto Stock Exchange, amid a surge in demand for digitally delivered health services and technology stocks in general, since the start if the pandemic.

The five-year-old Toronto company, which provides mental health therapy over the internet through its Beacon service, said in a securities filing last week it plans to raise $50-million by selling an as-yet undetermined number of shares for between $7 and $8 each. TD Securities and Credit Suisse Securities are leading the offering, which was first reported by The Globe and Mail last week. Bloom Burton & Co. and Canaccord Genuity Group Inc. are also part of the underwriting syndicate.

Toronto telemedicine startup MindBeacon has filed to go public on TSX

Now, in the face of brisk demand, the company has increased the target size of the offering to $60-million, said a source familiar with the situation. The Globe is not identifying the source because they are not authorized to comment publicly on the matter. The offering is expected to price this week.

MindBeacon 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 technology stocks, including the successful TSX initial public offering of Nuvei Corp. and Dye & Durham Corp. MindBeacon had previously raised $38-million from backers including Green Shield Canada, Manulife Financial Corp., and Telus Ventures.

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. 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 he and his spouse Claire, who co-founded MindBeacon, “feel that mental healthcare 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 Dr. 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, close to double levels in the same period a year earlier, according to the prospectus.

The company is looking for funds to expand its care offerings, hire sales and marketing staff, expand to the United States and beef up its data analytics and artificial intelligence capabilities.

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