Skip to main content

A Royal Bank of Canada (RBC) logo is seen on Bay Street in the heart of the financial district in Toronto in this file photo from January 22, 2015.MARK BLINCH/Reuters

The two most hotly anticipated Canadian tech initial public offerings of the year have several things in common: they are both fast-growing cloud-based subscription software companies, they have both chosen to list their shares dually in Canada and the U.S. – and they have both chosen RBC Dominion Securities as a joint lead book runner.

The Royal Bank of Canada's investment dealer was the top right name on the May IPO of Shopify Inc., sharing lead bookrunning duties with Morgan Stanley and Credit Suisse on a New York-Toronto dual listing of the retail merchant software provider.

Ever since, speculation has been high that the next Canadian tech to go public south of the border would be PointClickCare Corp., which sells cloud-based subscription software used by operators in the seniors care industry. A dead giveaway was the company's hiring of a chief financial officer with public markets experience: Paul Rybecky, former VP finance of Nasdaq-listed Dearlertrack Technologies Inc., who joined in March.

Sure enough, PointClickCare has decided to test the waters by filing to go public late Thursday on the Nasdaq and Toronto Stock Exchange, with a plan to raise up to $100-million (U.S.). Once again, RBC has a seat at the big table.

The Mississauga, Ont. company's filing statements show RBC shares joint book running duties with two Wall Street investment banks, only this time it is keeping company with J. P. Morgan and Goldman, Sachs & Co. Meanwhile, Canaccord Genuity continues its streak of showing up in the underwriting syndicates of notable Canadian offerings, making the list as the only other Canadian firm on the PointClickCare offering.

It's more validation for RBC as a major league conduit for the emerging class of Canadian tech startups to the US market. RBC has shown up as a book runner on many flashy US-side tech offerings in the past two years, including IPOs of Zulily Inc., Coupons.com and King Digital Entertainment PLC (maker of the Candy Crush video game), and was part of the megasyndicate that took Facebook public in 2012.

RBC has a sizeable i-banking presence in the US, with 70 bankers south of the border, and its research department includes renowned internet analyst Mark Mahaney, which the bank snapped up two and a half years ago after he was dismissed by Citigroup for violating disclosure rules by sharing unpublished revenue estimates with journalists.

RBC's vast commercial banking business has also given it a headstart in developing relationships early on with pre-IPO emerging tech companies. Long before showing up on PointClickCare's F1, RBC acted as placement agent in a $50-million (U.S.) venture financing in 2011 which brought lead investor JMI Equity, a US venture investor, on board. JMI owns more than one-quarter of the pre-IPO stock.

PointClickCare has been growing steadily, increasing revenue to $102.2-million in its 2014 fiscal year, up from $82.1-million a year earlier. Revenue in the six months ended April 30 was $58.7-million, up 22 per cent year over year. It has increased the number of senior care facilities using its subscription software to 10,900 as of April 30, 2015, up from 4,900 on October 30, 2011. CEO Mike Wessinger and chief technology officer Dave Wessinger, his brother, both in their mid-40s, own a combined 56.2 per cent of the pre-IPO stock.

After PointClickCare, what's next for Canadian tech IPOs? Look west: As The Globe reported recently, Vancouver is expected to produce a slew of public offerings in the coming quarters, including Hootsuite, Vision Critical Communications and Shoes.com, joining fintech company Mogo Finance Technology, which went public in June.