At Stockhouse, we’ve long been a go-to destination for news on mining, oil and gas, and mining. Lately, you might have noticed medical marijuana has experienced a burst of activity on the site.
Well, ‘burst of activity’ might be an understatement. Just about every major weed player – and a lot that hope to be major players - is currently working to get their story in front of our readers, which number close to a million monthly.
But we’re noticing another trend in the market that is beginning to show itself – a trend that is in its early stages but most definitely emerging.
The way Stockhouse works on the back end is, the editorial team gives you good quality information on junior companies that hopefully make you want to come back again and again, and the marketing team takes that readership and sells access to it to companies looking for access to investors. We’re not an IR firm, we’re a news outlet working alongside a marketing agency, connecting people wanting info with companies looking to share info.
So we have the box seat when the market starts to turn. Mining clients are looking for shorter deals? We know that means they’re having trouble raising money. Weed companies start knocking on the door? That tells us people are investing in weed at the private placement level and the ripples from that will hit the market later. Client deals at Stockhouse are a market bellwether most investors don’t have access to.
As an example, right now, we’re seeing a MASSIVE increase in graphite and lithium companies looking to get the word out. That’s been building for a few months now, and the recent story about Tesla building their ‘gigafactory’ for rechargeable auto batteries, which will likely double the global need for those resources, finally explained why.
The medical marijuana sector has gone through several transformations in the last few months, but is really picking up steam (no pun intended) right now. In fact, we’ve had to start qualifying marketing clients in the ganjasphere before agreeing to work with them. Not likely to succeed long term? We don’t want your marketing budget. Not prepared to let us ask hard questions? We don’t want your story on our site. It’s a luxury to be able to be picky, but it’s a luxury we can afford.
We like to think that stance has forced many in the weedspace to do better. In fact, we’ve worked with some companies directly to help them improve their business strategy before we would agree to do business with them.
Mining boosters will turn their nose at the weed market and say mining is about to swing back into the bullish end of town and before too long we’ll forget about anything but drill holes, and they might be right. But we’re noticing something even more interesting than a mining comeback at the Stockhouse coalface: The imminent rise of Canadian tech.
Last year, LX Ventures rode the rails to a big multi-bagger lift, before crashing back down to earth under a re-org and a pretty much constant whisper campaign by short-holders. LX is rebranded as Mobio (
TSX:V.MBO,
Stock Forum) now, and is making a focused run at the social media space from an investor-friendly stock price and with the short sellers now playing elsewhere.
When LX first emerged, there were no other tech plays to really look to as comparables. Maybe the heavily flagging Intertainment Media (
TSX:V.INT,
Stock Forum), but that companys failure to launch was often used to beat LX Ventures up, not because they had a similar story, but because there were no other Canadian tech stories on the upside to compare to.
LX took the hit, but is still going,
still doing deals and, now, presenting an interestingly low-share price if you’re looking to take a low-cost flyer in the social space.
The greater sector benefit stemming from LX’s experience, for mine, was it cleared the detritus from investors’ minds and showed there can be large scale public market investment in Canadian tech after all.
Which brings us to now, and why Stockhouse is priming for the next big tech swing.
A year ago, Stockhouse had two tech clients: LX Ventures and online cloud-based video startup Somedia.
But in just the last few months, as we’ve accelerated our coverage of tech stocks, we’ve been signing deals with all sorts of tech players, from the social tools pioneer Engagement Labs (
TSX:V.EL,
Stock Forum) to the plasma torch waste-to-energy innovators at Pyrogenesis (
TSX:V.PYR,
Stock Forum), to the long distance telecommunications middle men at Virtutone Networks (
TSX:V.VFX,
Stock Forum), life science researchers Avivagen (
TSX:V.VIV,
Stock Forum), sector crossovers like Cannabis Technologies (
CSE:C.CAN,
Stock Forum), medical tech players Medifocus (
TSX:V.MFS,
Stock Forum), online wine portal First Growth Holdings (
TSX:V.FGH,
Stock Forum), casino equipment financier Poydras Gaming Finance (
TSX:V.PYD,
Stock Forum), and the newest kids on the block, in-play sports gambling operation Contagious Gaming (
TSX:V.CNS,
Stock Forum) and energy solutions firm EnerDynamic Hybrid Technologies (
TSX:V.EHT,
Stock Forum). Coming aboard: Antisocial Holdings.
In fact, even mining companies are getting in on the tech wave. Stockhouse just signed a marketing program with Boxxer Gold (
TSX:V.BXX,
Stock Forum), which is retooling its business concept in a way that, to me, feels like the ‘Moneyball of Mining’, using data in new ways to find interesting new opportunities. I’m gonna love telling that story soon.
Convention organiser Cambridge House has also noticed this shift, having included a hefty green energy component in its most recent Vancouver investor’s conference, after literally decades of natural resource dominance.
Understand, this is more than just a LOT of tech floating around; it’s a paradigm shift because, traditionally, none of these kinds of companies have found love in the public space. Many of these companies have turned away angel investors and tech incubators to take the direct-to-market approach.
How early are we in the tech resurgence?
This early: Unlike other sectors, where client companies come aboard when everything is basically in place and they’re about to RTO, our people are hearing about deals for companies in the tech space that are pre-market. In fact, months from the market, but looking to make sure there’s room for them to get their stories out when they’re ready to debut.
Part of the reason for that is our new Broker Relations guy, Dirk Lohrisch, who is killing it all over town. But the other part is there’s a real shift in thinking with many tech startups on the Canadian scene that selling your soul to a tech venture capitalist has increasingly large downsides, and the money needed to grow can just as easily be found in the public markets.
Those companies include Lokbox, an interesting private software development company in Vancouver that has a technology that takes encryption to hitherto unseen levels in that devices using the system don’t actually move data. How do they do this? Encrypted pixels, friends. Lokbox’s mission is to “provide enterprise with a secure mobile ecosystem that is inexpensive, easy to use and platform agnostic.” We hear they’re doing large pre-RTO deals, both on the financing side and on the partner/sales end. PI Financial broker Jason Tomkinson is fielding calls on the deal and his book is multi-national. You’ll need seven digits to play at this stage of the game.
Details.
Another play making the rounds is Cohere, a licensee of the Paywith merchant payment and rewards system. That company, currently hitting second gear with serial tech entrepreneur Chris Woods at the helm, is doing testing of their tech in and around Vancouver’s restaurants and bars and will – eventually – go public in a big way. Worth noting: Already making revenue in the test phase. Broker Craig Taylor has pretty much devoted himself full time to this deal. Early stage financing is going on now before a bigger raise once they have their test run completed. Try it out and get a load of beer discounts at
https://m.paywith.com/sign-in - full disclosure: I’m helping them with marketing strategy.
I just heard a pitch from
Enthrive, a dietitian portal with some big public markets connections that allows folks looking to lose weight to Skype with a nutritionist and receive meal plans for a monthly subscription. An app is coming, they’re covered by a lot of insurance plans, and they’re raising money for a big run in the coming months. 200 dietitians already in the system, 95% success rate, and 22,000 coaching sessions already completed. More about Enthrive as it nears the point you can buy in.
One interesting play soon to RTO with the
V.GVR ticker symbol is mobile security startup
Mobsafety, which produces safe web browser software, a secure mobile device management platform and mobile apps that keep your stuff secure. Justus Parmar at Jordan Securities is ripping through the book on this Vancouver-based enterprise play and I’ll let you know when details are at hand.
On the social media end of town, where fat money can be made in an exit pretty quickly,
Peeppl is starting to make waves in Van City. Founded by a former Mobio-ite, like Mobio, it’s geared to help celebrities make dough on their social media content and following. Another Tomkinson joint.
I toss those five out there because they’re Canadian tech deals headed to the market. Not to tech incubators, not to a handful of private investors on boats, and not to massive IPOs where the little guy gets hooped. But to you guys. To the TSX. To the CSE. Early stage opportunities with fat upside that don’t involve waiting three years for a drill to hit a rock.
This is new. This is the start of a sector swing. This is where the next tech bubble – or at the very least ‘surge’ – begins.
Our commitment on the Stockhouse editorial side is, as we have done with mining and medical marijuana, so too will we do with tech. Gaalen Engen will
continue covering the space semi-daily, and not just from the ‘who’s putting out a press release’ angle or what networking event is happening downtown tonight side of things, but from the pre-launch, need to know, insider angle. We want to start bringing you opportunities before they’re opportunities, so your powder will be dry and your knowledge detailed.
Publicly funded tech is coming. Get your watchlists ready.
--Chris Parry
Stockhouse Director of Editorial