Skip to main content

Vancouver’s Thinkific Labs Inc. is proceeding with a planned initial public offering on the Toronto Stock Exchange despite recent market wobbliness for new Canadian issues, saying Monday it plans to raise $160-million in an IPO that would value the provider of a platform for online courses at more than $750-million.

The company said in a securities filing it wants to sell stock at a price between $11 and $13 a share, with early venture capital backer Rhino Group of Vancouver committing to buy $20-million to $25-million of the offering. Thinkific last month filed to go public, but did not disclose how much it was seeking to raise.

The nine-year-old company has experienced significant revenue increases providing a platform for individuals and businesses to offer courses online, growth fuelled partly by the pandemic. It earned US$21-million in revenue last year, more than double the US$9.8-million it brought in a year earlier and US$6-million in 2018.

Thinkific lost US$1.3-million in 2020 after eking out small profits in each of the previous two years. But any profits are a rarity for a fast-growing technology company. The prospectus also shows other signs of strong performance. Thinkific had 24,600 paying customers at the end of last year, up 126 per cent from 2019.

The offering is coming to a market at a challenging time for new Canadian issues. Last week, The Globe and Mail reported that Saskatoon’s Vendasta Technologies Inc. has struggled to raise money for its $100-million IPO. That followed cuts to offering sizes and prices by MDA Ltd. , Boat Rocker Media Inc. and ABC Technologies Holdings in previous weeks to get their IPOs done.

Some new issues in Canada’s IPO market have sold well, including Telus International (Cda) Inc. and Dialogue Health Technologies Inc. But a recent sell-off in growth stocks – including several technology companies that have gone public in recent months – has dulled previously exuberant investor demand for Canadian IPOs. Among them, online furniture seller Cymax Group Inc. of Vancouver has delayed its IPO plans and is now looking for a new chief financial officer.

But investment bankers haven’t given up on the IPO market yet. Following on Thinkific’s heels, Waterloo cybersecurity company Magnet Forensics Inc. is expected to file a prospectus for its offering later this week and begin marketing next week, in a deal co-led by BMO Nesbitt Burns and Canaccord Genuity.

Despite the recent choppiness, market watchers are also closely following key U.S. offerings for a sense of the larger investor appetite for tech stocks, including cryptocurrency exchange Coinbase, which begins trading Wednesday on Nasdaq, and New York automation systems software maker UiPath Inc., which is looking to raise up to US$340-million from its IPO.

Investors buying into Thinkific’s IPO, co-led by BMO and CIBC World Markets, will get just a tiny sliver of voting control over the company. CEO Greg Smith, his brother and co-founder Matt Smith, the chief strategy officer and Rhino own a total of 57 million multiple voting shares, which will account for 78 per cent of the outstanding shares after the IPO and carry more than 97 per cent of the voting power, according to the prospectus.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.