It’s official – Kitchener-based online learning company D2L Corp. has applied to list on the Toronto Stock Exchange, making it the second tech company from Waterloo Region to test the public-market waters this year following Magnet Forensics’ initial public offering (IPO) in April.
D2L filed a preliminary prospectus with regulators this week. It is seeking to trade subordinate voting shares under the ticker symbol DTOL. The number and price of the shares have not yet been determined. TD Securities Inc. and BMO Capital Markets are the co-lead underwriters.
Rumours of a D2L IPO began swirling earlier this year as investor interest in Canadian tech soared and an unprecedented number of Canadian technology companies began listing on publicly traded markets.
D2L will be only the third Waterloo Region tech company to go public in the past 15 years. Until Magnet Forensics listed on the TSX in April, the last locally based company to go public was COM DEV spinout exactEarth in 2016 and, before that, Sandvine in 2006.
That said, plenty of Waterloo Region companies have been raising significant amounts of private investment over the same period. Edtech unicorn ApplyBoard, for example, has raised hundreds of millions of dollars in private funding and is now valued at CDN$4 billion.
Originally known as Desire2Learn, D2L was launched in 1999 by current CEO and President John Baker. He was just 22 years old at the time and still a student in the systems design engineering program at the University of Waterloo.
The concept for D2L arose from a tech-for-good challenge that Baker set for himself in the third year of his undergrad studies.
“I challenged myself to find the most important problem I could solve, that would have the biggest impact on the world,” he wrote in a letter included in the D2L prospectus. “Inspired by my own family of educators and my experiences at university, an idea sparked my imagination one day as I walked across campus – learning is the foundation for progress and the impact of work in this area would have a ripple effect from one person to the next, and ripple through generations, communities, companies, and cultures.”
In a 2017 interview with Tech News, Baker recalled how one of his first big breaks resulted from a short talk he gave as a fledgling founder to an audience of Communitech members. The five-minute presentation yielded a hat trick of sorts: several investment offers, an introduction to one of his first major customers and the recruitment of a future employee.
Today, D2L is one of the world’s foremost online-learning companies.
Its core product, Brightspace, is a cloud-based software platform that helps users design and deliver courses, learning content, educational games, assessments and more.
According to the preliminary prospectus, the number of D2L customers grew to 970 in fiscal 2021, up 33 per cent from 730 in fiscal 2020. Customers include more than 500 colleges and universities, over 150 K-12 elementary schools and districts, over 50 professional associations and industry groups, and more than 300 businesses, healthcare institutions and governments in more than 40 countries.
D2L’s revenue grew more than 15 per cent in fiscal 2021, to US$126 million from US$109 million in fiscal 2020.
The demand for online learning systems has soared during the COVID-19 pandemic. Baker told Tech News earlier this year that D2L had hired more than 330 new staff since the start of the pandemic, boosting the total number of employees to more than 900 worldwide.
In its prospectus, D2L cites the findings of education research company HolonIQ, which forecasts the global education technology market to more than double to $404 billion by 2025 from $183 billion in 2019.
In his letter, Baker addressed some of the many impacts resulting from the pandemic, including the rapid transformation of how education is delivered, the need to provide individual students with more options that better suit the way they learn, and the reality of massive job losses and the need to retrain.
“I see this as a historic opportunity to pivot to a more human learning experience,” he wrote. “Now is the time to move away from the old industrial era model of learning that assumes everyone progresses at the same pace, and where we measure learning by looking at seat times, exam scores, or the number of hours spent on compliance or professional courses.
“We help customers personalize learning and measure progress based on mastery of skills. Everyone is unique, and we need to meet learners where they are today, adapt pathways, and engage learners to help them achieve outcomes they didn’t dream possible.”