OMERS Xanadu Stock Gains Hit US$1.45 Billion Before Lock-Up Ends
OMERS’s xanadu stock windfall has reached US$1.45-billion after the pension giant put in less than US$30-million, but the shares cannot be sold until late September. The paper gain leaves early Canadian backers sitting on a mark-to-market surge they still cannot turn into cash, even after Xanadu Quantum Technologies closed up 24 per cent on Friday.
Blake Hutcheson Calls It Wacky
US$1.45-billion is the value of OMERS’s stake now, versus less than US$30-million invested through its venture capital arm in Xanadu’s first two financings. Blake Hutcheson said the outcome “is wacky” and added: “I’m keeping perspective. It’s on paper and it’s locked up, so I don’t want to get overly zealous. But it’s proof.”
US$10.8-billion was Xanadu’s market capitalization on Friday after the stock closed up 24 per cent, making the company Canada’s fifth most valuable public tech company. That move also pulled more of the locked-up Canadian shareholder base into the spotlight, because the shares are still subject to a lock-up until late September.
Real Ventures, Georgian and Others
US$668-million is the value of Real Ventures’ Xanadu stake after its 2017 fund invested less than US$10-million. Golden Ventures’s Fund II holds US$493-million of Xanadu shares, Georgian’s Fund IV holds US$1-billion of stock, and Radical Ventures’ second fund has a US$430-million stake. Those numbers show the gain is not isolated to one fund; it runs through multiple Canadian venture firms that backed the company early and are now waiting for the same lock-up to expire.
33 locked-up Canadian investors appear in securities filings, including Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Polar Asset Management Partners, MM Asset Management and the Business Development Bank of Canada. The list also includes Michael Hyatt, Richard Hyatt, Michael Serbinis, Dennis Bennie, Anthony Lacavera, Daniel Debow and Donald Guloien, which means the restraint is spread across banks, funds and individual backers rather than one corner of the market.
Late March to Late September
Late March is when Xanadu went public by combining with a Nasdaq-listed special-purpose acquisition company, and late September is when the early investors can finally sell. Christian Weedbrook said last week, “Maybe it’s true, but why don’t we see how close we can get to that ideal situation,” after wanting to raise as much financing as possible in Canada about a decade ago.
The immediate test for these backers is simple: whether the stock can hold near this level until the lock-up lifts, or whether the paper value that now looks extraordinary begins to move before anyone can realize it. Michael Hyatt called the outcome “Xanadu’s success is a massive win for the Canadian ecosystem, proving we can scale world-class deep technology right here while delivering the kind of liquidity that fuels the next generation of founders” and said, “While this is a great milestone for early backers, I’m convinced Xanadu is only just getting starte.”
