Why Hubba CEO Ben Zifkin Thinks There Are 25 Potential Billion Dollar Tech Companies in Toronto


Ben Zifkin is the founder and CEO of Hubba, one of the many Toronto-based tech companies making an impact on the global stage. A platform that connects brands with retailers, Hubba has the largest pool of emerging and craft brands in the world. After raising a significant Series B financing from Goldman Sachs, Hubba aims to be Toronto’s next multi-billion dollar company. In this wide-ranging conversation with NEO’s Julia Kassam, Zifkin explains why he thinks his company is not the only one.

BZ: When you’re talking to high growth companies, what’s the appetite for them to go public?

JK: There’s a lot of mixed feelings in Canada these days about going public. Some of that is the ‘don’t IPO’ sentiment spilling over from the Valley, echoing concerns of valuation on the public market. Others have been vocal about their experience on the public market being lackluster. But, yes, there is an appetite to go public – our team is constantly in conversations with companies that have a strong story and promising growth trajectory, but what we reinforce with each one is the importance of IPO readiness. 

Meeting the minimum listing requirements on an exchange is not a valid reason to IPO. Nor is being a billion-dollar company a requirement. It’s a multitude of factors that are based on the specific dynamics of the company at a point in time.

What do you think?

BZ: It’s a hard one. We had a company in our space that just listed. They have almost a 9 figure market cap, and it seems to have generated less than $100K in revenue last year. Now, it will settle, and that gets washed out, but then they may become a de-listed company pretty quickly.

JK: We’ve seen this before. Companies that don’t garner the attention of investors may choose to voluntarily delist. And if they remain public, they may be viewed as an orphaned company on the public market.

I often hear up-and-coming tech companies talk about their exit ‘game plan’ and whether it will be through an acquisition or an IPO. What are your thoughts on how to shift a company’s mindset as it moves from private to public?

BZ: Acquired-versus-IPO is probably the wrong way to look at it. If you’re thinking of, ‘being a massive global institutional company that will be around for the next 100 years’ — what you’re saying is, ‘I want to build a strong, wonderful, healthy, foundational company’. How you do that, the funds you need in the meantime, and where they come from, is just the mechanism to get there.

I talk IPO because there are very few multi-generational companies that are not public companies. So, it is in effect part of the growth plan — it is also a healthy way to run a company — but I’m not talking about IPOing necessarily, but being ‘IPO-able’.

I want to build a company that is healthy, strong, attractive to people, and generating revenue — focus on healthy metrics — and from there make the decision whether that includes additional private money or whether it means the public route. And at some point, that may move on from the private to the public route because it gives liquidity and puts us in a stronger position for the next several generations that we’re going to build the company.

JK: At this stage of growth for Hubba, it’s important to attract the mechanisms necessary to achieve the next level of growth. What challenges do you see in making Hubba ‘IPO-able’, regardless of what route you decide to take?

BZ: At the end of the day, you have to run a business. [Toronto is] good at building startups. Some of those startups turn into companies, and some of those companies turn into revenue-generating businesses. But that’s kind of a thin wedge right now.

Therein usually lies the challenge. It’s good that we can create companies that raise a lot of funding, really interesting companies in fact, but how do you create sustainable businesses?

Historically, Toronto has been really good with enterprise companies. Now we’re starting to see emergence of companies that have different models and that can reach massive scale.

When we started Hubba, we believed we had a great opportunity here, but recognized that it was going to take us ten years to get there. We were a company from day one, we never considered ourselves a startup. We were going to take the time to build critical mass first. The next step was to focus on how people were using Hubba, and only then turn on the monetization, when we have 100,000 companies on the platform.

That is a very different approach than historic Canadian businesses, which made it a challenge in 2011-12, when we were trying to raise funding and say ‘we are not talking about monetization right now, — this is a B2B network, and a totally different model than what you had before’.

So I think that’s what it’s going to take: more and more businesses in the ecosystem.

JK: Shopify remains one of the most talked-about Canadian tech IPOs in recent memory. Their momentum has captured the attention of investors across North America. How has their success helped you?

BZ: We service a similar SMB clientele. We’re the other half of the equation in commerce, where brands for example, use Shopify to sell directly to customers and brands turn to us to get distribution into every retailer and e-commerce site that they need to sell. They focus on the direct-to-consumer side and we focus on the business-to-business side of the retail industry.

Their success has been helpful to us, both in the market, but also in fundraising. There’s no doubt that we stand on the shoulders of Shopify when top-tier investors reach out to us and say: “we’re interested’.

Five years ago, when I first moved back here, investors wouldn’t necessarily be interested, because we were a Canadian company. Since then, because of some of the success, those conversations evolved from ‘okay, but you have to move down here’; to ‘you don’t have to move down here, but you fly down to see me’; and now the investors say, ‘we’re coming up to see you’ and we say, ‘great, come and why not see ten other companies as well?’

That all was kicked off because of the success of Shopify, just like I hope many companies are going to benefit from our success. That’s just how the cycle starts, and we’re only one or two generations into that cycle right now.

JK: You talk about investors coming here to see you. Toronto has secured its spot as a top-tier innovation hub with a strong ecosystem not only in North America, but globally. Does Toronto have the potential to emerge as the global leader?

BZ: It’s why I moved back here. I do think Toronto has the potential to be the number one international tech hub, bar none. The Valley is a unique thing that has ten generations of these cycles. But when you consider the London’s, the New York’s, the Tel Aviv’s of the world, the Shanghai’s of the world, the Beijing’s of the world, Toronto has a better shot than any of them, I think. And that’s why we’re here.

I think there are different ways of building a company. There are those that put their head down, build their company and do their thing. Our approach has always been to help build a community around us, because we benefit tremendously from that, from the community of other companies here that are successful. VCs come, clients come, talent comes, and because they come, we all get better.

We have enough like-minded people here on the community side that it’s created that gravitational pull in Toronto.

JK: How long will that take – five years, 10 years?

BZ: At the end of the day, Toronto doesn’t have any new generation multi-billion dollar companies. The only thing that’s going to bring that talent and create that cycle to get the flywheel going on its own is when you have two, three, five multi-billion dollar tech companies here. We’re just not there yet.

At five years we’ll see the first one or two here. I think there’s probably 25 that have the opportunity. But in the meantime, when you get one or two, you’ll get more and more that are selling at the $400-500 million range, and even more that are in the $100 million range. And that pyramid just keeps going up and up and up: you’ll get more multi-billion.

JK: How do you get to the point where you’re comfortable saying ‘we’ve got a global mindset in our company and this is working for us’? Not just a Toronto company serving North American companies, but actually servicing companies all over the world.

BZ: And we are. We are currently about 50 people here and we service over 100,000 companies in 140 different countries around the world, all out of our Toronto office. The company that has the best chance of usurping the largest commerce company in the world, Alibaba, is us, a small Toronto-based company. That’s what people don’t realize.

JK: In one sense you’re a global brand because of where your customers are located. But how do you get global recognition for the company itself?

BZ: I think that because we’re in this second generation of entrepreneurs that have had success before — Mike Serbinis, Allen Lau, for example — people now start with global aspirations. It just happens that we’re headquartered here in Toronto, but it’s a global company no matter what.

And that was important to me, too, to say we’re a massive global company, but we will always be a Canadian company. My investors always said, ‘be careful, you don’t know what’s going to happen,’ but I will go on record and say we will always be a Canadian company. I will tell anybody that.

We will, of course grow our company to have offices in different cities like New York, the west coast and London, Asia, but Toronto will be headquarters no matter what.

I think that initial mindset of, ‘this is what we are, it just so happens that we’re based in a wonderful city’ is a very different thing than you’d hear before.



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