Local software and data services outfit Canopy Tools has firmly landed in next year’s initial public offering pipeline.

Street Talk understands the Brisbane-headquartered tech business has just closed a $21 million pre-IPO fundraising round with help from broker Shaw and Partners, in advance of a float in the first half of next year.

Canopy Tools has two core products called Canopy Manage and Stratus.

The first is a software product used to discover, manage and track internet of things (IoT) devices and cloud computing systems, and is used by the defence and healthcare industries, among others.

IoT devices refer to any physical object that collects data and is connected to the internet. For example, Canopy Manage might be used by a cruise liner to link all its IoT devices in order to track how passengers are moving through the ship.

The company’s Stratus product is a cloud storage service, to securely store this IoT data.

Canopy Tools notched $17.2 million revenue in fiscal 2020, which was expected to rise to $22.4 million in the 2021 financial year, according to a presentation sent to potential investors. In that same timeframe, earnings before interest, tax, depreciation and amortisation was pegged to grow from $9.5 million to $13.9 million.

Funds were told that money raised in the pre-IPO round would be initially used to pay down existing debt and then help finance the company’s entrance into the US market. Canopy wants to establish a presence in the US, and plans to do so by acquiring a US IoT company in the second half of this year.

The rest of the money would go towards getting the right board and corporate governance structure in place before its run at the ASX boards.

Article source: AFR, 9 February 2021