Nuvei Technologies And Unity Software Join Tech-Tonic IPO Rush Of 2020

Summary

• Nuvei Technologies Corp (TSX:NVEI) scripted the biggest tech IPO on the Toronto Stock Exchange, raising US$ 700 million from the market.
• Video game developer Unity Software Inc. (NYSE:U) expects to raise US$ 1.3 billion through its IPO.
• The rise of tech stocks, the big winners of 2020 pandemic markets, is not expected to slow down anytime soon, despite the recent rout.

Toronto Stock Exchange’s biggest tech stock initial public offering (IPO) is here. Payment technology company Nuvei Technologies Corp (TSX:NVEI) raised US$ 700 million on Thursday, capitalizing on the massive tech stock wave that has gripped the world amid pandemic.

Nuvei IPO also marks the largest market capitalization and dollar amount raised by a technology firm, said TSX parent firm TMX Group in a statement.

The company announced the sale of 26.9 million subordinate voting shares for US$ 26 a piece, up from its previous price estimates between US$ 20 to US$ 22 per share. The offering will close on September 22. Nuvei will receive US$ 625 million of the gross proceeds while US $75 million will go to the selling shareholders.

At the time of filing this write-up, Nuvei stocks were trading at C$ 45.6, up over 75 per cent within 24 hours of its trading debut.

Nuvei Technologies Corp (TSX:NVEI)

COVID has become a catalyst for the fintech industry and Montreal-based Nuvei riding on this trend.

Nuvei’s native technology platform processes millions of daily transactions, creating a sole point of integration for all payment requirements. It has partnered with clients in multiple segments such as online retail, shopping carts and platforms, gaming, sports betting, financial services, developersand travel.

Nuvei business is spread across the United States, Canada, Latin America Europe and Asia Pacific. It supports over 180 alternative payment methods. It also Spanish-language services platform for the US market.

The company, founded by Philip Fayer, has over 50,000 customers across the globe and 780 employees.

Tech-Tonic IPO Rush of 2020

After a tepid 2019 for technology firms, followed by a gloomier start to 2020, tech IPOs are finally catching up in the second half of the pandemic-laden year.

Cloud-based data warehousing firm Snowflake (NYSE:SNOW) officially kicked off the big tech IPO week in the North American Markets on Wednesday. Several growth-stage tech firms, including Nuvei, followed on Thursday. These were JFrog Ltd (NASDAQ:FROG), data analytics firm Sumo Logic (NASDAQ:SUMO) and American Well Corp (NYSE:AMWL).

Next up is video gaming software developer Unity Software, which will go public on Friday.

And more tech IPOs are expected in the coming weeks, including the highlyanticipated trading debuts of Airbnb, Palantir, Ant Group and DoorDash.

A flurry of IPOs from various industries are expected to flood the markets before the US Elections on Tuesday, November 3.

Unity Software Stock (NYSE:U)

Its game time for Wall Street! Top video game software developer Unity Software Inc. will begin trading on the New York Stock Exchange under the symbol ‘U’ on Friday morning.

Unity is expected to raise US$ 1.3billion through its IPO with shares priced at US$52 apiece.

The company gained prominence after becoming top player in the gaming industry for its 3-D platform tools that allow developers to create titles with code. The company has 1.5 million active monthly users and more than three billion downloads a month.

Its revenues in 2019 was US$ 542 million, up 42 per cent year-over-year. In the first half of 2020, the revenue soared 39 per cent to US$ 351.3 million.

Stock Market’s Tech Game

Technology companies were the clear winners in the pandemic-roiled markets of 2020. But that was till the first week of September.

In the last 18 days, heavyweight tech stocks have pulled down the NYSE and NASDAQ indices. Stocks of technology giants such as Tesla, Netflix, Apple, Alphabet, Amazon, and Facebook lost steam in the equity markets, entering a correction zone. This skid cascaded down to markets around the globe including Asian and European geographies.

Back home too, the benchmark Canadian equity index traded in red zone on Wednesday, following the massive Wall Street tech rout.

The TSX tech index, with 16 constituent companies and an adjusted market cap of C$ 222 billion, has yielded 32.58 per cent gains this year. However, the index is down 3.63 per cent quarter-to-date and 8.26 per cent month-to-date.

The rise of tech industry was always on the horizon. The coronavirus pandemic has only accelerated those trends forced by the en masse shift of traditional systems to digital platforms.The industry has benefitted from consumers’ and businesses’ shift to digital and work-from-home environment, a change that is likely to stick around.

Despite the recent slide of tech stocks, the industry is not expected to slow down anytime soon. But, for now, gyrations may continue in the tech stocks given their high valuations.

In 2019, Canada’s Information and Communication Technology sector accounted generated C$ 210 billion in revenues. This number will likely surge in the pandemic times, underlined by the need to embrace digital adoption in a homebody economy.

(Source: Innovation, Science and Economic Development Canada)

Information Technology accounts for over nine per cent of the S&P/TSX Composite Index. On the S&P/TSX Venture Composite Index, the sector weighs nearly six per cent.