TMX POV - Not Your Parents’ TSX Venture Exchange

When I start chatting with people from around the world, and they know I work for a Canadian stock exchange, they ask me about the Vancouver Stock Exchange that lists mining companies. While the roots of TSX Venture Exchange (TSXV) proudly stem from the regional exchanges in Canada, today's TSXV is not the one your parents and grandparents may be familiar with.

Natural resource companies still shine brightly on TSXV, with nearly 1,000 mining companies, and $6B of equity capital raised in 2021. However, over the last number of years, we have seen a proliferation of exciting innovation companies from all over the world utilizing TSXV as their growth platform.

There are a few key statistics that highlight the changing landscape of TSXV at the end of 2021:

• 3 technology companies are listed with a market capitalization of greater than $1B each
• Average market capitalization for listed technology companies is $100M
• $1.8B was raised by technology companies on TSXV in 2021
• Average financing size on TSXV was $10M, a 188% increase since 2017

Financing Highlights in 2021

Below are a select few examples of the technology companies that have utilized TSXV as their platform for growth in 2021:

• Converge Technology Solutions raised $86M in January 2021, graduated to TSX on February 11, 2021, and was added to the S&P/TSX Composite Index* on September 20, 2021
• HIVE Blockchain Technologies Ltd. is a growth-oriented technology stock in the emergent blockchain industry that went public on TSXV in 2017, raised $91M on TSXV in September 2021, and followed that with a $115M raise in December 2021
• Quisitive Technology Solutions Inc. is a global Microsoft partner that harnesses the Microsoft platform and complementary technologies, including custom solutions and first-party offerings, to generate transformational impact for enterprise customers; went public on TSXV in August 2018, based out of Dallas, TX, and raised $20M in March 2021, $58M in April 2021, and $40M in November 2021
• WeCommerce Holdings Ltd. provides merchants with a suite of ecommerce software tools to start and grow their online store, went public on TSXV in December 2020 after completing a $60M offering, and raised $34M in July 2021

Why is this happening?

An exchange designed for earlier stage growth companies

TSXV is considered the premier platform for earlier stage companies to grow and develop, and is part of a two-tiered exchange ecosystem that is unique to Canada. This is a pragmatic method for earlier stage companies, which cannot adhere to some of the timeline and reporting standards required of being listed on a senior exchange, like Toronto Stock Exchange (TSX), to go public.

A method to go public that suits the needs of earlier stage companies with limited public market experience

Going public through a traditional IPO can be cumbersome and too expensive for many earlier stage companies. TSXV's Capital Pool Company® (CPC™) program is a unique listing vehicle that can make particular sense for smaller companies looking to go public. In January 2021, we made some significant changes to the program, which resulted in a 184% increase in CPCs formed in 2021 versus the previous year. The CPC program connects experienced investors with private companies and helps these earlier stage companies better understand the ins and outs of life as a public company.

Investor interest in the companies listed on TSXV

Global investor interest in our market is picking up, as seen by the $11B of equity capital raised on TSXV in 2021. An example of this new interest in our technology companies is highlighted by a recent financing, completed in January 2022, for Tribe Property Technologies Inc. ("Tribe"). Round13 Growth Fund ("Round13"), a late-stage growth equity investment fund, and part of the Round13 Capital family of funds, was the lead investor for the financing and subscribed for $10 million worth of units in Tribe's $21M financing.

Pathway to a senior exchange

And when these companies are ready for a senior exchange, they can seamlessly graduate to TSX. In 2021, we saw over 35 companies graduate from TSXV to TSX, including 24 innovation companies.

As I reflect on my first few weeks as the new Head of TSXV, I am excited by the enthusiasm of innovation companies from all over the world using TSXV as their platform for growth. When I started my career at TSXV over 20 years ago, I never thought we would see the day where such a significant transformation would take place. I look forward to working with all of our stakeholders in continuing to support the growth and diversity of Canada's public venture market.

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*The S&P/TSX Composite Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and TSX Inc. ("TSX"). Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and TSX® is a registered trademark of TSX. SPDJI, Dow Jones, S&P, their respective affiliates and TSX do not sponsor, endorse, sell or promote any products based on the S&P/TSX Composite Index and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the S&P/TSX Composite Index or any data related thereto.

All data sourced from TMX Market Intelligence