Canadian tech companies make their way to the US markets - The Average Joe

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    Canadian tech companies make their way to the US markets

    victorlei

    October 13, 2021

    Canadian Tech Infiltrates the US Markets

    Canadian tech companies are making their presence in the US markets known — as the number of dual listings on the Canadian and US stock exchanges rise.

    US investors are getting more access to the Canadian tech sector — on the verge of exponential growth and at cheaper valuations than US stocks.

    Coming to a stock market near you

    In recent years, Canada has seen many tech successes, including Shopify and Lightspeed — both trading on US exchanges. Joining the list is a Canadian payments company, Nuvei, which debuted on the NASDAQ last week. This comes a year after going public on the Toronto Stock Exchange last September — and is up 240% since.

    Nuvei is a payment technology provider with a focus on mobile and e-commerce payments — providing over 480+ different payment methods (i.e. Visa, Apple Pay, etc), 150+ foreign currencies and 40+ cryptocurrencies.

    • Making money: Nuvei takes a transaction fee from all payments processed through its network.
    • Going global: Operations in North America, Europe, Middle East, Africa, Asia Pacific and Latin America.
    • Profitable, fast-growth: Sales grew 112% in the second quarter and 92% growth is expected in the coming quarter.

    Positioned to win

    Nuvei built its business powering mobile and e-commerce transactions — which made up 84% of its total transaction volume in the last quarter. And now it’s well-positioned to expand into fast-growth markets given the acquisitions it made in 2021:

    • Sports betting — by acquiring sports gambling payments provider, Mazooma.
    • Cryptocurrencies — by acquiring Simplex, a payments infrastructure provider for the crypto industry.
    • Latin America — by acquiring Paymentez, a payments provider serving the LATAM market.

    After raising $369M from going public in the US, investors can expect more growth-fuelled acquisitions from Nuvei.

    Investors: The future is fintech

    With a price-to-sales multiple of 36x, Nuvei isn’t cheap. But neither are the other high-growth fintech companies that have been on fire in the past 6 months:

    • AI lending platform, Upstart (NASDAQ:UPST), trades at a 50x price-to-sales multiple — and is up 151%.
    • Buy now pay later platform, Affirm (NASDAQ:AFRM), trades at a 42x price-to-sales multiple — and is up 101%.

    But Nuvei has two things over these companies — profitability and a large international presence.

    Looking forward: Nuvei is expected to release its third-quarter earnings results on Nov 10, with sales expected to grow ~ 92%. But given how Nuvei beat sales expectations each time in the past 3 quarters, let’s see if it can’t keep up the trend and continue its growth in the triple digits.

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