Canada tech stars poised to lead new IPO boom for sectors

TORONTO: Social media and online-education startups are poised to lead a resurgence in technology initial public offerings in Canada as investors burned by a slump in the commodity industry turn to more lucrative markets.

Hootsuite Media, Desire2Learn and Vision Critical Communications are among technology companies that will be ready to go public within two years, according to John Ruffolo, who has invested in all three through the venture capital arm of the Ontario Municipal Employees Retirement System pension fund.

Canaccord Genuity Group forecasts that more than $400 million will be raised through technology IPOs in Canada this year, which would be the most for the industry in more than a decade, according to data compiled by Bloomberg. Canadian investors are turning to technology for growth after three straight years of declines for mining and materials companies , which along with energy account for more than a third of the stocks on the nation’s benchmark equity gauge.

Meanwhile, technology companies in Canada rose 36% in 2013, the biggest gain in four years and returning more than comparable US companies. Entrepreneurs are choosing to stay in the country instead of moving to the US because of the increasing availability of pre-IPO funding,saidRuffolo,chiefexecutive officer of OMERS Ventures.

Hootsuite, Desire2Learn and Vision Critical “certainly are big enough and the markets are ready enough,” said Tom Astle, head of strategy at Toronto investment firm Difference Capital.

Bloomberg