Propel blasts past fellow tech IPO boom laggards with U.K. acquisition and $100-million bought deal

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Canadian fintech was one of the last tech companies to go public in the 2020-21 bubble. Now, it’s the top performing stock of the group by wide margin

was one of the last Canadian technology companies to go public before a boom for new issues cratered in the fall of 2021 during the height of the pandemic. It also raised one of the smallest amounts of the 20 initial public offerings of the era, bringing in $70-million.

Propel, which now sports a market capitalization of $1-billion, has been profitable for years, unlike most technology companies. It pays a dividend, which is even rarer – and has increased the payout in five of the past six quarters. “We felt confident the market would receive this transaction well,” said Len Sauer, Canaccord Genuity’s managing director, head of equity capital markets. “This has been a very good success story in the Canadian capital markets.” Propel said the financing was two-times oversubscribed with three-quarters of demand coming from institutional accounts.fall. Excluding the Propel deal, there have been 17 equity financings by Canadian tech companies this year, raising $549-million.

Propel offers instalment loans and lines of credit directly to consumers online through its MoneyKey and CreditFresh services, and partners with banks, both to provide loans to their customers and back-office services in support of their lending operations. Propel was making money on its loans after two years and raised debt capital to finance its book. By 2021 it had built out its infrastructure and had the capability to forecast reliably and accurately, and went looking for growth capital. It raised US$15-million from fintech financier Raptor Holdings, then went public that October.

 

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