Is Vision Critical up next on the IPO parade?

In our business, you know you’ve chosen well when I-bankers call you up to talk about one of your portfolio companies.

Vancouver-based Vision Critical, which we first financed seven years ago this month, started out developing / operating software and tools that are used to help companies recruit, engage and learn more from their customer advisory panels. Vision Critical’s platform enabled self-serve polling and surveying by Global 5000 companies using their own customer panels. Its sister company, Angus Reid Strategies, offers full-service market research and consulting services that leverage the online technology provided by Vision Critical.

Lots has happened over those seven years, as a 35 person complement has become hundreds of people the world over. A fabulous Canadian success story, with a very talented management team led from the Board by repeat entrepreneur Angus Reid.

Since 2006, there have been many significant milestones at the company. $6 million in revenue became $13 million; $13 million became $20 million; $20 million became $37 million, and so on…. Last year saw a major round of institutional financing when OMERS put in $20 million; the first VC-like money since our firm and Telus Ventures joined Reid’s investment syndicate so many years ago. A talented new CEO was engaged (Scott Miller) as was a well-known and popular CFO, Donna de Winter of Geac fame. The company also did its first acquisition.

The business has transitioned over the years, even as it grew. Investment has been made in several new geographies, including Asia and South Africa. New product lines have been successfully launched, such as customer experience management and brand equity management. Customer panels have become “Insight Communities”, and online communities have evolved to include workflow and collaboration communities, customer service communities, and marketing/advocacy communities.

With over 600 insight communities globally, Vision Critical has found that these customer communities have become mission critical corporate platforms in an increasingly consumer-empowered and customer-centric world.

Despite the HQs’ distance from the stock exchange, it sounds as though Bay Street is starting to get excited about a potential Vision Critical IPO. The window is definitely open, for the first time in years (see representative prior posts “Belair / Ericsson deal a wake-up call for every Institutional Sales Desk” Feb 22-12, “Halogen IPO filing gives Canadians their first chance to taste tech in far too long” Apr 2-13 and “Halogen IPO a true blowout” May 10-13).

With good institutional demand for the recent Halogen Software (HGN:TSX) and ViXS (VXS:TSX) (“ViXS is next in line for Tech IPO parade” Apr 11-13) offerings, and a 21% rise for HGN post-deal, it only stands to reason that folks are looking for more high quality growth companies that fit the bill. Vision Critical, among a short list of perhaps BTI Systems and Desire2Learn for example, may well be next should its Board decide that now is the time.

Always a treat in our business, where most great firms get sold and merged into larger entities. If Canada is going to have a robust public tech ecosystem, firms such as Vision Critical need to take the leap of faith, and local institutional investors need to be there to welcome them with open arms.

MRM
(disclosure – our Fund III owns warrants in VC)