CIX Public Investor Day: A roaring success for Canadian Tech

Yesterday was the first time the Canadian Innovation Exchange (“CIX”) hosted its “Top 20 Public Companies” day for Canadian-listed Technology Pubcos, and organizers weren’t sure what to expect. This all-day forum was created to complement the “Top 20 Private Companies” day, in its 8th year as a destination event for Venture Capital and Institutional investors from all over North America. With a 600-plus crowd, technology bankers, Bostonian incubators, and Silicon Valley insiders were everywhere.

Stockhouse is proud to have been the Title Sponsor for this first Top 20 Public Companies Day, and since we had attended the Private Event, we knew that this first CIX Top 20 Public Day was going to run like clockwork. The venue was the MaRS Discovery District, a technology incubator facility designed to help showcase innovation. The Achilles Media team worked all year to get speakers, expert commentators, and agendas ready for CIX, so there was no doubt all attendees would be impressed.

As it turned out, it was standing room only from start to finish for CIX’s Public Investor Day. With Dianne Buckner (CBC’s Dragon Den) acting as host, each Top 20 company had 7 minutes onstage to speak to their company’s innovation and business plan, and then a panel of expert commentators would “grill” them (in a mostly friendly way).

Speaking with CEOs beforehand, many stated they were nervous, not because they were speaking in public as oration comes with the territory for every Pubco CEO, but they were unsure they would be able to condense their business into just 7 minutes. Hats off to John Nixon and Dianne Buckner for keeping them honest, as they somehow kept the presentations on schedule.

Some highlights from the day:

UrtheCast (TSX: UR, Forum) CEO, Scott Larson, delivered the keynote address, and since his company produces high definition video from orbit, it provided some amazing content for UrtheCast’s presentation. The company’s underlying business is intriguing, as there are massive CapX requirements to get hardware into orbit, but the margins are 95% once it is there. With recent agreements, UrtheCast seems to have solved issues of being tied to expiring space stations, and are looking to open whole new markets. Its primary customers have long been government organizations and large corporations, but the company could be creating entirely new markets as the product cost comes down.

Next up was Raja Singh Tuli, CTO, Executive Co-Chairman and founder of Datawind (TSX: DW, Forum). His mission is to bring the internet to BILLIONS of people in developing countries who have smart phones but can’t afford data plans. The company’s patented technology can slice data costs by 20x, which means a customer in India (Datawind’s primary market) and Africa, can access the internet for $0.50 month. The cost to deliver for Datawind is $0.08. When Tuli put the map of the world up and included the company’s addressable market, it added an incredibly powerful punch to his presentation.

The “FinTech” session was a strong example of a space where Canadian entrepreneurs are leading the way in innovation. Tio Networks (TSX: V.TNC, Forum), VersaPay (TSX: V.VPY, Forum), Mogo Finance Technology (TSX: GO, Forum) are all in this year’s Top 20. Several commentators questioned how exposed different aspects of their businesses are to the big banks. Mogo is going straight after the consumer loan business. Its Founder, CEO and Director, David Feller, responded to a panel comment that even the most conservative banks aren’t going to sit idle while their market share is clipped, “We hire people from banks, and as bad as you hear the culture is there, it is even worse”.

Co-Founder Cameron Chell represented Slyce (TSX: V.SLC, Forum), another Top 20 company innovating the internet space. Their valuation has been pretty soft this year, but as Cameron was speaking, stock price shot up based on rumoured takeover bids by a PE firm offering a steep premium to take the company private. So far, the company denies any knowledge of the bidders.

Financiers in the crowd were buzzing after hearing Richard MacDonald, President and CEO of Axios Mobile Assets, speak. Axios (CSE: AXA, Forum) is about to close a major financing ($15M+) and they have secured contracts with suppliers to Walmart as well as continuing negotiations with other large chains. Axios provides pallet technology, and this first contract is about egg shipments. As one major investor excitedly commented, “This is a big contract for this company, but this is just for delivering eggs. How much bigger can the company get?”

The last speaker was George Fleming, CEO and Chairman of VidWrx (TSX: V.VID, Forum), a company that applies technology to provide scalable video production. He commented on how rough the past year has been in the markets, and a commentator commended him for his fortitude, but asked why they’ve had revenue headwinds. Fleming’s answer summed up a theme of the day “The problem is that we created a solution before there was a real addressable market. We created a way for companies to create scalable video content at a price point no one can compete with, but it has taken until the last few quarters for companies to finally get to the point where they are unable to create the scope and volume of video content that they need.”

This sentiment was echoed throughout both the Public and Private Top 20 days. A situation which is very confusing for investors as technology innovators has been able to create both Unicorns that aren’t profitable and bootstrap startups that are profitable from Day 1. Therefore it is almost necessary that an investor be able to sit down with a technology CEO and have them explain their innovation and investment case so the investor can look past the sometimes misleading financials into the company’s true future. That’s what the “Innovation” approach in the CIX events is about, and, as usual, both forums provided some eye opening insight for the investment community.

Michael Koussaie, Head, Business Development, Technology for the TMX, delivered the closing remarks, recounting last year’s CIX tagline, #techisback. Technology companies now account for 40% of the TSX Venture 50, and in 2015, 15 new technology companies were listed on both the TSX and TSXV as of September 30th. Stockhouse.com traffic is reflecting the same trends, as technology Bullboards at Stockhouse have become some of the most active on the site. As Michael said, the technology sector is growing and as a result, both Canadian business and the government need to make sure they clear a path for continued growth.

Every Public Top 20 company is going to be covered on Stockhouse over the next few weeks, including video and interview coverage. Congratulations to each winner of the CIX Top 20, both public and private, and congratulations to this illustrious group for delivering a fantastic day of insight to investor attendees. For the complete list of the Public Top 20 winners, click here.

FULL DISCLOSURE: VersaPay and Datawind are Stockhouse Publishing clients.