About 113 names debuted on the S&P/TSX Composite Index thus far in 2021 despite the uncertainties due to the global pandemic. March had the most number with 31, while several debuts were cryptocurrency ETFs like Purpose Bitcoin ETF and CI Galaxy Ethereum ETF.
If you were to add two recent Initial Public Offerings (IPOs) to your buy list, consider TELUS International (TSX:TIXT)(NYSE:TIXT) and Payfare. Besides the successful listing, the respective business outlooks this year and beyond are encouraging.
Fifth-largest IPO
TELUS International is the TSX’s fifth-largest IPO in history. Instead of a $7 billion valuation target, the company ended up with an initial market capitalization of $8.5 billion. Likewise, the successful IPO surpassed the market valuation of its mother company, TELUS, from 2000.
According to Telus President and CEO Darren Entwistle, TELUS International has been a pillar within the group’s dynamic growth strategy. After achieving a historic milestone, TIXT begins the next chapter of its journey. The mission of this $9.58 billion company is to become a true brand ambassador for top-performing global brands.
The customer experience and digital business services are available in North America, Central America, Europe, and the Asia-Pacific region. The company’s digital experience solutions include AI and bots, omnichannel CX, mobility solutions, cloud contact centre, big data, and platform transformation.
In Q1 2021 (quarter ended March 31, 2021), TELUS International reported double-digit organic growth and total revenue of 57% versus Q1 2020. President and CEO Jeff Puritt said the quarterly results demonstrate its remarkable resilience to grow, notwithstanding the challenging business environment.
Management hopes the diversity of digital capabilities will drive the company’s growth. Puritt said the company is uniquely positioned to harness its end-to-end digital capabilities. With digital transformation tailwinds accelerating, he expects demand from existing and new clients to increase.
From the reported $1.58 billion revenues in the full year 2020, TELUS International expects revenue growth between 35.9% and 38.4% in 2021. Meanwhile, adjusted EBITDA could jump 36.3%, at best. Global and disruptive brands benefit from its services support in the entire lifecycle of their digital transformation journeys.
Focus on gig workforce
Payfare made its market debut on March 17, 2021. Younger investors or millennials should find this $278.76 million global financial technology company an attractive investment option. Based on analysts’ forecast, the current share price of this recent IPO ($6.48) could soar by 85% to $12.
The company will partner with leading on-demand gig platforms to power free digital banking and instant payouts to their workforce. Payfare CEO Marco Margiotta said, “Gig workers are a valued and growing part of our economy, and Payfare is proud to help drive their financial security and inclusion.”
Payfare’s financial technology powers instant worker payouts for gig platforms and marketplaces. It aims to deliver financial freedom and peace of mind to the rapidly growing gig workforce. Gig workers can gain instant access to their earnings through Payfare’s full-service digital banking apps and payment cards. There are cash-back rewards on everyday purchases too.
In Q1 2021, Payfare’s active user count increased by 168% and 96% compared to in Q1 2021 compared to Q4 2020 and Q1 2020. The total revenue of $5.05 million represents a 46% increase from Q4 2020.
Exponential growth
TELUS International and Payfare are potential TSX tech superstars in 2021. Expect exponential growth as the companies capitalize on the accelerating digital transformation in the 21st century.
