Canada has sat out this year’s tech IPO boom save for Montreal-based Lightspeed POS Inc.’s public offering in March. Tech-sector watchers don’t foresee an imminent slew of Canadian offerings but rhyme off names of potential domestic candidates for initial public offerings in years to come, including Ritual Technologies Inc., TouchBistro Inc., Wave Financial Inc. and Vena Solutions Inc.
Now, another Canadian company is adding itself to the IPO watchlist: ACL Services Ltd., which on Monday rebranded itself as Galvanize.
“Our ambition is to be public company-ready by 2022,” said Laurie Schultz, chief executive of 30-year-old Vancouver-based Galvanize, which has 500 employees and 7,000 customers globally for its anti-fraud and risk-management software. The company is in the market for a chief revenue officer and a chief financial officer who has "done this before ... and has the chops to handle” an IPO, she said. Ms. Schultz said she expects to start the process of preparing the company to go public within a year.
With Vancouver’s star fading as a startup hub thanks to the retreat, restructuring, sale or disappearance of the city’s most prominent software companies from five years ago, Galvanize might be the best hope to bring some mojo back to the local tech scene. “The biggest catalyst for us to change is to better tell our story," said Ms. Schultz, who noted Galvanize’s software has been used to bust drug cartels, expose casino money laundering and uncover false cancer diagnoses.
Galvanize is a typical low-profile Canadian tech success. It’s a global leader in an unsexy niche of the vast enterprise software business (revenues for the company are believed to be in the high tens of millions of dollars or more), has attracted a big U.S. private equity investor (Norwest Venture Partners, which has invested US$70-million since 2017) and has ambitions to consolidate a fragmented but growing market. Three months ago, it announced the purchase of U.S. security risk-management software company Rsam, and Ms. Schultz said, “I’d personally love to queue up another acquisition in the next 12 to 18 months.” Galvanize’s organic growth in new bookings was a brisk 50 per cent last year.
A crush of deep-pocketed private equity firms have bought into enterprise software companies in recent years. That has sidetracked many from potentially going public – including Mississauga’s PointClickCare Technologies Inc. – thanks to compelling private valuations and the prospect of not having to face public investors every quarter.
“The easiest thing would be to sell; I get courted by private equity all the time,” said Ms. Schultz, a veteran software executive who succeeded founder Harland Will in 2011 and transformed the company from a traditional seller of on-premise software to a provider of cloud-based subscription software. “I certainly appreciate an IPO will be a lot harder. For us to be able to leave a legacy for our community, to know the headquarters decision making, the emphasis on culture and customer and not just financials is still controlled [in Canada], that still means a lot to me.”
Ms. Schultz said the Will family, which controls Galvanize, is supportive of an IPO, while Norwest general partner Rob Arditi said his firm knew that was the preferred option when it invested. "It’s about creating optionality,” he said. “It’s not IPO or bust. The company can still have a very good outcome even if it doesn’t go public. I think Laurie [wants] to build a business that has legacy and staying power and she finds a lot of pride in building a large technology business in Vancouver and making sure it stays in Vancouver.”
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