Ottawa, Canada ripe for IPOs in 2015: Kensington Capital Partners

Canada could see 10 to 20 initial public offerings in 2015, with several Ottawa companies on the list of potential candidates, according to the managing director of a Toronto-based investment firm.

Kensington Capital Partners managing director Rick Nathan said the capital has a lot of small private tech companies that have ridden the mobile, cloud wave. These companies, along with several Canadian counterparts, started on a cycle around 2009 of building a product, finding customers, then generating revenue and finally profits, which can all lead to a possible IPO.

“As we look across the industry, we see this happening to a level that we have not seen since probably the dot-com time in the 1990s,” he said.

Mr. Nathan said there is one obvious Ottawa candidate.

“Look. Everybody knows and loves Shopify … We’re quite excited about that company. They may be at the head of the pack. If not, they’re certainly among the leaders as probably everybody knows,” he said.

If the e-commerce juggernaut does decide to go the IPO route this year, it could have some company in the capital, he added.

“I would say that there’s lots of activity in Ottawa and continues to be,” he said.

Kensington, which was launched through the federal government’s Venture Capital Action Plan, announced four investments Monday, including a fund-to-fund investment in Georgian Partners II, which is already investing in Shopify. It also said it has made fund-to-fund investments in Montreal-based NOVACAP TMT IV and Walden Venture Capital VIII, which Mr. Nathan sees as a critical Silicon Valley partner.

It also gave direct funding to Blue Ant Media, a Toronto-based media company with operations in traditional and digital platforms.

Mr. Nathan said the key investment markets in Canada are Toronto, Waterloo, Montreal, Vancouver and Ottawa, and he said the nation’s capital is definitely on Kensington’s radar.

“Ottawa is a great market. There’s a couple of generations already in the Ottawa tech community,” he said.

Mr. Nathan said Ottawa companies looking for Kensington’s money should show the firm three things: a strong experienced leadership team, a big opportunity with large-scale markets and some kind of component – proprietary technology or patents, for instance – to allow it to defend its market position.