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Sam Duboc, executive chair and chief executive officer of Toronto-based MindBeacon Software Inc.

Handout

Veteran Bay Street financier and entrepreneur Sam Duboc is set to take his telemedicine startup MindBeacon Software Inc. public on the Toronto Stock Exchange amid a surge in demand for digitally delivered health services during the pandemic.

The five-year-old Toronto company, which provides mental health therapy over the internet through its Beacon service, has tapped TD Securities and Credit Suisse Securities to lead the offering, which is expected to be filed publicly within days and is targeting a $50-million raise, said an anonymous source familiar with the situation. Bloom Burton & Co. and Canaccord Genuity Group Inc. are also part of the underwriting syndicate.

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. Nuvei Corp. and Dye & Durham Corp. Dye & Durham Corp., the source said. MindBeacon had previously raised $38-million from backers including Green Shield Canada, Manulife Financial Corp., and Telus Ventures.

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The Globe is withholding the source’s identity as they are not authorized to speak publicly on the deal. In a brief e-mail response to questions about the IPO, Mr. Duboc wrote, “Nothing to say at this point.”

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 from investors including Sun Life Financial Inc., Caisse de dépôt et placement du Québec, Power Corp. of Canada’s Portag3 Ventures, and Loblaw. Dialogue has also 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 co-founded private equity firm EdgeStone Capital Partners, as well as Air Miles parent LoyaltyOne Co., and has previously served as chair of the Business Development Bank of Canada.

He has also been open about his past struggles with depression. That led him to join in 2015 with CBT Associates, a private Toronto provider of cognitive behavioral 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. He and his wife partnered with CBT Associates to form MindBeacon and 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.

MindBeacon told prospective investors earlier this year that it expects revenue in 2020 to double to $9.4-million from 2019 levels, according to an investor document obtained by The Globe and Mail. It is forecasting revenues will more than double again in each of the next three years.

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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