Real Matters scores one of TSX’s largest tech IPOs

Real estate data firm Real Matters Inc. closed its initial public offering of $156.7 million Thursday, the largest technology IPO on the Toronto Stock Exchange in a decade, according to its chief executive.

Jason Smith said the Markham, Ont.-based company was thinking about going public as early as the summer of 2016, but wanted to know it had a predictable business in the United States where it is a leading player in the network management services platform sector for the mortgage and insurance industries.

“There is a lot of readiness that you need to do in terms of going public, in terms of hiring people,” said Smith, who feels as though his company has been in quasi-public state for awhile because it had already raised $200 million from Canadian asset managers who had taken common shares in a private company. That shareholder base forced certain limitations on Real Matters that Smith believes left it ready for the public markets. “We looked like a public company yesterday because of our shareholder base but trapped in a private shell,” he said.

The TSX is a first step with a cross-listing in the United States possible later. The size of the offering, while large by Canadian standards, might have got lost in the shuffle south of the border.

“Somebody threw around today that this has actually been the largest Canadian tech IPO in a decade in terms of how much we raised. It’s a big deal here,” said Smith in an interview.

All of the company’s technology and product is built in Markham and most of its leadership team is located there as well. It does have offices in Buffalo, N.Y., Cincinnati and Middletown, R.I.

“Most days we can get to our U.S. operation centre in Buffalo faster than we can get to downtown Toronto, depending on the traffic. We are kind of like the Google of Buffalo. There are great schools there and we are grabbing all the MBAs,” said Smith.

More than 90 per cent of the company’s revenue comes from the United States and that includes the US$3 billion annual appraisal business. Typically, a consumer going into a bank for a new mortgage has to have an appraisal associated with that transaction. The other 10 per cent of its business comes from Canada where the company was hatched in 2006.