Canada startup Payfirma raises capital, mulls 2016 IPO

Reuters News
Posted: May 27, 2015 12:33 PM

By John Tilak

TORONTO (Reuters) - Canadian payments software startup Payfirma has raised C$13 million ($10.42 million) in its first institutional funding round and is considering an initial public offering in 2016, its chief executive officer said on Wednesday.

CEO Michael Gokturk said in an interview the company is considering an IPO as early as 2016, and could list in Toronto and New York. The executive had previously co-founded payments company Versapay Corp <VPY.V> and taken it public.

Led by Dundee Capital Markets, Payfirma's financing included several of Canada's top institutional fund managers, Gokturk said, though he did not name the investors. The private placement financing takes its total funding to over C$26 million to date.

Payfirma, which has strategic partnerships with Canadian Imperial Bank of Commerce <CM.TO> and Apple Inc <AAPL.O>, said it expects to use the money to expand in the United States, where it is in discussions with some major banks.

The Vancouver-based company's technology allows customers, which are typically businesses, to streamline payments made through websites, mobile devices and in store into one platform. The client can then view all types of transactions, whether they are made by credit cards, debit cards or PayPal, on a single screen.

"Most businesses are using three, four, five vendors to accept credit and debit cards. It’s a broken system," Gokturk told Reuters. "We address that by putting them all into one account, one platform, one data set."

"We're already thinking about the second round of funding. What that really means is that we are contemplating a liquidity event," such as another round of funding or an IPO.

An increase in funding underscores the appetite for technology investments in Canada and comes about a week after Canadian e-commerce startup Shopify had a successful stock market debut.

Entrepreneur Roger Hardy said on Monday that his venture raised C$45 million and was planning an IPO in the fall.

Investors are closely watching a slew of Canadian technology companies, including BuildDirect, Vision Critical, Hootsuite, and Wattpad, to see if they might go public.

Founded in 2011, Payfirma says it has over 5,000 business customers in Canada and the United States, including include recruitment website CareerBuilder and Uniqlo, owned by fashion retailer Fast Retailing Co <9983.T>.

($1 = 1.2474 Canadian dollars)

(Editing by Jeffreys Hodgson and Benkoe)