Mutual-fund giant Fidelity Investments has slashed the valuations on its holdings in several private Canadian technology companies including Hootsuite Inc. and ApplyBoard, Inc., reflecting a broader downturn in the value and prospects of their publicly traded peers.
Fidelity revealed the valuations of its public and private holdings for the year ended June 30 in its annual report, filed with security regulators Monday. The 1,254-page document provides a once-yearly snapshot of the investments held by its 100-plus funds.
According to the filings, Fidelity cut the valuation of its holdings in Vancouver-based social-media management company Hootsuite by 46 per cent, to $18.1-million from $33.5-million a year earlier. That is even lower than Fidelity’s $20.2-million book cost of its original investment, held by its Canadian Growth and Special Situations funds, made several years earlier.
Hootsuite, a beacon of Canada’s tech sector and one of the country’s largest private software companies, laid off 30 per cent of its staff two months ago, or roughly 400 people.
Fidelity was also an investor in several financings by ApplyBoard, committing a total of $20.77-million to the education technology company, based in Kitchener, Ont., through its Special Situations Fund. By June 30, 2021, it had written up the book value of its holdings to $29.2-million on the heels of a US$300-million financing last year, led by Ontario Teachers’ Pension Plan, that valued the company at the time at US$3.2-billion.
However, as of this past June 30, Fidelity had cut the valuation of most of its ApplyBoard holdings by 24.3 per cent from a year earlier.
Fidelity reduced the valuation of its holdings across two funds in Montreal artificial-intelligence startup Imagia Cybernetics, Inc., by 49.6 per cent, to a total of $1.87-million. It also nearly halved the value of its $8.64-million investment in Quebec sensor-technology maker LeddarTech Inc., made within the past year, to $4.5-million as of June 30.
Fidelity also sustained heavy losses in its publicly traded technology companies, which include such names in Canada as Copperleaf Technologies Inc., Shopify Inc., Dialogue Health Technologies Inc. and Docebo Inc., reflecting the crash in valuations across the sector.
It wasn’t writedowns across the board. Fidelity did marginally write up the value of its Canadian investments in Clearpath Robotics Inc., and Vention Inc., two Canadian companies that build technology used in warehouses and factories.
Fidelity isn’t the only investor in Canada’s technology sector to reveal writedowns to its private holdings. Both Power Corp. of Canada and subsidiary IGM Financial Inc. have twice slashed the carrying value of their stakes in bank challenger Wealthsimple Technologies Inc. – which was one of Canada’s most valuable private tech companies last year. That included a 47-per-cent markdown by IGM as of June 30 compared with its value three months earlier.
Sean Silcoff