Considering an IPO? The timing might be right

It is a pivotal time to be working in the tech space. As a result of everything that’s happened in the last year, most (if not all) successful companies today, regardless of sector, are tech-enabled. And this is something we expect to continue to see going forward: the leading companies of the future are those that have technology at the heart of their strategy.

Favorable conditions

As we all know, the last year has been challenging both from personal and economic standpoints. But we are seeing some companies that have been able to adapt and provide critically needed solutions. When we look at things like adoption of digital technologies, what we expected would take up to five years has happened in a matter of months.

Furthermore, the change in government in the United States could be a game changer for impact investing with favourable policies for environmental, social and governance (ESG) initiatives. We may see a surge of Clean Technology success stories in the near future.

As a result, for some organizations, particularly in sectors like technology, life sciences, digital health, e-commerce, logistics and online media and gaming, the last few months have been a time of unprecedented growth. Some of these companies are now considering an IPO as a strategy to raise capital to further accelerate their growth.

For tech-enabled companies that are in a period of growth, there are many opportunities available in the market right now. During 2020, 41 IPOs occured in Canada, despite the COVID-19 pandemic conditions, according to FP Advisor¹. Of these 41 IPOs, 13 were technology and biotech companies raising CA$2.8 billion and 56% of the total raised. 

Current market conditions with higher equity valuations and lower interest rates will favor the IPO market. 

Business leaders may want to consider this opportunity to take advantage of available capital and use it to fund more growth and maybe even to attract the talent they’ll need to keep propelling their organization into the future. But timing truly is everything. Organizations interested in opening paths to capital, particularly an IPO, need to realize how fast windows of opportunity can open and close. At PwC Canada, my team and I are passionate about working with organizations of all sizes looking to take this step. We have the expertise on our team to support you at every stage of your journey.

What’s most important to us is building a relationship with you: whether you’re just considering an IPO or actively taking steps toward getting ready, we want to get to know you and understand how we can best support you.

Even if an IPO isn’t the right move for you right now, my personal advice to my clients is always to think about where you want to be in five years. Start a conversation with those in the market now—both to understand what the market needs and to surround yourself with people who believe in what you’re doing and will invest in you.