Why Clio didn’t IPO
29.07.2024 23:59:27 Yorum Yok Görüntülenme
VCs have been finding it hard to secure capital, while startups are eyeing investors south of the border to balance the arduous demands of growth and profitability. But a few rays of sunshine poked through the grey skies of malaise shrouding the Canadian tech ecosystem.
Cohere announced a $500-million Series D at a $5.5-billion valuation while Clio announced a $900-million Series F at a $3-billion valuation, making it the largest round ever raised in the country, according to John Rikhtegar, director of capital at RBCx.
BetaKit covered both rounds in detail this week, so I suggest you give those stories a read below. But I want to dig a little deeper into the macroeconomic and market conditions surrounding Clio’s fundraise.
The 16-year-old company was ready to go public “on a moment’s notice” following its Series E raise in 2021, but the IPO window closed by the end of that year. Big Tech stocks were up in the first half of this year, but last week the Nasdaq posted its worst trading session since 2022. NEA, which has successfully brought companies like Cloudflare and Groupon public, led Clio’s round, a signal that an IPO is still the plan. When it happens is dependent on when interest rates drop, Rikhtegar said. Plus, Klaviyo and Instacart recently went public with $400 million in annual recurring revenue—Clio is halfway there.
Meanwhile, secondary markets in the US are hot right now because LPs are looking for liquidity. There’s no equivalent data for Canada, Rikhtegar said, but the US market saw three consecutive six-month periods of capital calls outpacing capital distributions. In a strategic way, Clio refreshed its cap table and kept both investors and employees motivated to continue growing the business toward an eventual IPO.
After years of seeing more companies return private than go public, it’s a big deal to have a major Canadian tech IPO once again on the horizon.
Thanks for reading on and ’til next week,
Bianca Bharti
Newsletter editor
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