Canadian expertise firm Lightspeed is testing its fortunes on the U.S. market, in hopes that buyers will desire a piece of its digital funds enterprise.
Shares of Lightspeed POS Inc. started buying and selling on the New York Stock Exchange on Friday, elevating US$305 million for the corporate’s Montreal-based cloud expertise enterprise.
“There’s a lot of respect for Canadian tech and for Canadian companies to be technology leaders and category leaders,” stated chief government Dax Dasilva.
“Many of our U.S. investors encouraged us, quarter upon quarter, to consider listing in New York.”
The inventory didn’t get off to an ideal begin. Shares opened up at US$32, after underwriters priced them at US$30.50 in a public providing. But after hitting a excessive of US$32.44, the shares closed the day greater than 4 per cent decrease at US$30.25.
Dasilva stated that it has been a tricky week within the markets for expertise firms, however stated he’s assured that there are “tailwinds” that may profit the corporate’s mission to assist small companies to simply accept funds. The cash raised by the general public providing will assist Lightspeed, add to its checklist of acquisitions, and develop new merchandise, he stated.
“A good half of our customers are in the U.S. … we wanted to raise our profile even more in the U.S., given that we have such an opportunity in front of us. The whole world is moving to digital commerce,” stated Dasilva.
Lightspeed, which already traded on the Toronto Stock Exchange, has been rewarded by Canadian buyers this 12 months.
Lightspeed’s 2019 Canadian public providing was priced at C$16 per share. The shares have since greater than doubled to commerce for greater than C$40 every in Toronto.
The firm’s wager on U.S. buyers comes as fairness markets have tried for good points, regardless of pressures on the general economic system from the COVID-19 pandemic. The S&P 500 Information Technology index returned almost 42 per cent for the one-year interval ending Sept. 10, in comparison with a 12 per cent return within the S&P 500 total.
The COVID-19 pandemic has pushed extra small companies towards digital funds, Lightspeed stated in August, when it reported a 51-per cent year-over-year rise in gross sales in comparison with the identical quarter in 2019.
Dasilva stated the corporate has benefited from a buyer base that tends to be extra keen to experiment with new expertise. Although Lightspeed has but to show a yearly revenue, Dasilva estimated that retailers utilizing Lightspeed’s platform are rising 4 to 6 occasions sooner than a standard retailer.
“We have a lot of exposure to retail and hospitality … initially, I think the market expected us to have a lot of exposure to COVID, given our customers. But our customers are also future-forward,” stated Dasilva.
CIBC Equity Research analyst Todd Coupland stated Lightspeed’s August quarterly gross sales figures mirrored a “strong” monetary place. In a be aware to shoppers, Coupland stated Lightspeed’s enterprise has been buoyed by the corporate’s resolution to supply its clients choices for processing curbside pickups and cell pockets funds, and integrations with U.S. tech giants like Google and Stripe.
In a prospectus provided to its U.S. buyers, Lightspeed stated it aspires to be a one-stop store for increasing small companies that must ring up purchases, monitor stock, schedule residence deliveries and arrange loyalty applications.
In one instance, a Pennsylvania sporting items firm needed to shut its bodily shops amid the COVID-19 lockdown, however was ready to make use of Lightspeed’s expertise to broaden its on-line gross sales to 22 new states.
“I think we had more of a mapped-out path to profitability before COVID hit. Now, we are making sure that … the costs to acquire a customer is justified by the long-term value of the customer,” stated Dasilva. “What’s also well understood about companies that come fro Canada is that they are both innovative and grounded … we have DNA to be great international and global companies.”
The 11.65-million share U.S. providing was led by underwriters Morgan Stanley, Barclays and BMO Capital Markets, with a number of banks, together with RBC, CIBC, Scotiabank and Toronto-Dominion, performing as co-managers.
This report by The Canadian Press was first revealed Sept. 11, 2020.