Add Thinkific Labs Inc. to the growing number tech companies eager to cash in on surging demand for their digital services as people stick to their homes amid the pandemic.
The Vancouver-based firm is officially on the path to going public after filing a preliminary prospectus with Canadian regulators Monday.
Thinkific, best known for its platform that helps businesses and individuals create and distribute online courses, raised $22 million in venture capital last September in a funding round led by early investor Rhino Ventures — also based in Vancouver.
But the company is not yet revealing how much it intends to raise by going public.
Last fall, Vancouver-based BBTV Holdings Inc. raised $172 million via an initial public offering as part of a bid to retake a majority stake in Broadband TV Corp. BroadbandTV is best known for developing a platform that helps create, distribute and monetize video content for online consumption.
Thinkific’s preliminary prospectus reveals revenue has been moving at a clip the past three years, growing from US$6 million in 2018 to US$9.8 million in 2019 to US$21 million in 2020.
Meanwhile, the company increased its operating costs from US$7.4 million in 2019 to US$18.1 million the following year.
The prospectus stated that “a significant part of our business strategy and culture is to focus on long-term growth and customer success over short-term financial results” before noting that during the 2019-20 fiscal period the company went from having net income of $300,000 to incurring a net loss of $1.3 million.
User growth has increased 126% to reach 25,000 paying customers over the past year, according to the prospectus. Average revenue per user amounted to US$105 and a total of 66 million online courses were taken by 21 million people last year.
Thinkific has free offerings, but revenue is generated by delivering additional features to course creators who typically pay between $49 and $99 a month and then charge their clients fees for the courses (Thinkific does not take a cut of those fees).
CEO Greg Smith told BIV last year course creation on Thinkific’s platform surged 200% since the outset of the pandemic.
“We might have seen one week of things being a little bit slow – but not even a concerning level of flow – and then everything completely blew up in a good way,” he said about the immediate impacts of the pandemic on Thinkific’s business.
Back in the fall, Smith said his goal was to triple the company’s headcount over 18 months by hiring 350 more tech workers to meet demand.
“We saw a bit of uncertainty in the world but also a real opportunity to double down and do even more for businesses that are unique. The interesting thing we’ve seen is so many businesses that would have otherwise potentially failed are now thriving because they’ve moved or transitioned to online education or added it as a component,” he said.
The IPO is being underwritten by a syndicate of underwriters led by BMO Capital Markets and CIBC Capital Market.