Technology valuation snapshot - Q1 2014

Canadian software and services technology stocks traded in-line with the broader market in Q1 2014, despite increased and growing investments in the heated cloud-based sector, real-time big data analytics, mobile application development and social media. Strength in software was also reflected in the M&A markets as large cap corporations continued to trade at elevated multiples. These multiples, compare to those reached in the technology boom during the early 2000s, displays the market's high expectations for future growth in the industry.

As Silicon Valley remains a major technology hub in North America, the Valley stays heavily invested in software and IT services, representing over 60% of total funding activity. Computers and peripherals continue to trend downwards as the PC market suffers from the cannibalization of tablet and mobile sales.

The mid-market remains healthy as Canadian companies have shown a sustained hunger for innovative growth, with trendsetters seeking further funding for expansion opportunities. Companies now co-existing in a highly competitive and developing market continue to cultivate innovation and growth through acquisition to amplify their market share. With IPO activity focused in the US market, Canada has experienced a swing to larger mid-market deals that provide investors with some promise of future liquidity, representing a strong future for public Canadian technology markets.