Good afternoon, everyone. I would like to introduce our next presenter of the day, Jason Meiers, Chief Investment Officer of Stack Capital. Welcome.
Hello. Thanks for coming in today. I appreciate it. We'll run through. We're a publicly listed company. Basically, it's a pre-IPO fund one to three years away from going public. I'll just run through why did we start Stack. We wanted to democratize access into a very hard and opaque market to invest in. It will be five years old in about a month. We've been really excited with the five years that have gone by. One big trend is that there's way more private companies and a lot less public companies. More and more private companies have been able to access capital and do a really good job of raising the money they need. One of the advantages of being a private company is there's not the quarterly pressure to report.
You can actually do some more strategic things on a more medium-term basis without the pressure to make your numbers quarter to quarter. This slide says a lot. We've actually had it since the very first since we went public. In the old days, Amazon went public, CAD 30 million market cap or CAD 30 million in revs rather, tiny little businesses. All that, you didn't really have to buy private companies back then because there was still the opportunity. They were so early in their process and their existence that you could make a lot of money once they went public. That's no longer the case. A lot of the early returns can be made in the private markets.
If you look at, you know, like Uber, for example, you know, SpaceX, which we'll talk more about because it's our largest holding. It's very hard to get these names. Like, Goldman Sachs and Morgan Stanley are unlikely to give you a nice IPO fill. That's, you know, a short list of investors in the world, and this is sort of a really good way to get a diversified portfolio for that strategy. A few of the advantages. For example, in the old days, you bought a fund, and you'd be locked up for 7-10 years in a private equity fund.
If your circumstances change because we're a public entity, you can move on and sell your shares if or if you think, you know. Bottom line, you have access to your capital on T+1, which is a pretty cool strategy, I would say. Transparency. A big thing, if you invest in a private fund, you're realistically not getting a lot of details on what's going on in there. You'll get your reporting, whether that's quarterly or yearly. We're audited by MNP, that is a higher standard in our opinion and, you know, a lot of transparency. Like, you know what our portfolio is. Typically, we're buying some of the biggest names in the world, it's very clear when our names are doing something and when the valuation's changed.
TSX-listed, biggest exchange in Canada. Active management, obviously. Our interests are aligned, so the board of directors and management own 9.5% of the float of the company that we paid money for with no stock options. Like, we literally bought on the same terms as investors. Experienced leadership. We've been in the investment business for a long time. One of the CEO ran a hedge fund for a number of years, and I ran a proprietary trading, basically a hedge fund within one of the largest banks in Canada for around 25 years, who actually was our lead banker. I left my cushy job on Friday, started Stack on Monday with him as top left lead. That's hard to do. Permanent capital, that's a really big advantage in the private market.
You, you know, 2021 and 2022, our first two years of existence, was a terrible time in the IPO market. We. It's really important that you don't get redeemed or, you know, the stock traded poorly during the really bad times, but we didn't have to return capital in a bad. If you were a fund and people asked for your money and you're a forced seller in 2022 or most of 2023, that would have been a very unhappy story for investors. That's a big deal. The other thing too, talk about being a value-add investor. In most cases, we're super tight with our management teams, and we work to help them win new business. That's one of our big differentiators.
That could be a, like, if you're a data center business, that could be introducing you to senior politicians to help you get power to do a data site, or that could be getting two of our travel companies to work together in a partnership. That could be one of our robotics companies, introducing to the largest manufacturer of roofing sidings in the world for robots. All those sorts of things. Like, it's really important to us that we don't just write a check, that we get involved and make a difference to the business. There's two ways that we get stocks. That's primary transactions, so that could be the company raising capital directly. A lot of times, that can be a tender.
For example, let's say a SpaceX did two tenders a year. If you don't give liquidity to some of your employees on a fairly regular basis, they don't really believe in the value of their stock options. Even if it's maybe it's 5% of their portfolio gets liquidity, it still really helps people see the value in their pay package. Because if it's just on paper and you never get any of it, you could see people getting recruited away for money. It just lets them sort of get some of the rewards of the lifestyle of the money they've earned. Unless you can access some of it, you really don't believe it.
The other thing, once we have full access to information, no management typically, full. We'll also buy a lot of times, we'll buy in a tender, let’s say, and then add to the position in the secondary market, and that could be from employees, ex-employees. It's really, I think, one of the keys to our strategy is we're typically working with management. We have information. If you trade in the private markets without information, good luck to you. You need to really understand the capital structure. You need to know where you are in the pref stack. You need to know how the company's growing, what the balance sheet looks like, all those things. If you. Yeah, it's, I'd say we dig really deep and typically know our management teams very well.
This is an interesting slide. The valley of death in early stage, is not an area we play in. We have no interest in, you know, you put a cloud diagram on a chalkboard, and you're gonna make a great company, I tip my hat to you, and I wish you well, but that's not what we do. You're a big, established business with very strong product market fit and typically very strong massive revenues, especially in the last few years. We've really gone bigger and bigger, and that'll become clear when we've talked about the portfolio. This is really key too. For example, if you don't understand the cap table and what's a pref A, B, C, D.
A lot of our portfolio is pref shares, and typically, the better companies, it's usually just a one times liquidation preference, but it really matters that you understand the lay of the land, and it matters for example, we have Newfront Insurance, a company that we actually only broke even. We made money on FX on it. They got taken out maybe three months ago. We invested, like, I'd say early 2022, and we had top of the stack prefs. The common shareholders they did not do well. We got our money back because we were ahead of them. Typically, when you're in a pref, you're even above management. If things don't go amazing, it gives you, it protects shareholder value and makes a big difference.
For example, though, like we own Canva. We own common shares. They've been profitable for. This is their 11th year of profitability, growing at 45%, 265 million monthly users. Net cash on the balance sheet will be a darling when it gets there. Like, we will go down. We don't have to be in prefs, but if we can get them and it's a, it's a preference. Here's a timeline of names we bought. You can see we're pretty active, but not too crazy. You're kind of buying, like, maybe four names a year. You're really trying to. When we're picking a name, we're like, "Will this be a top three IPO in the world?" That's really how we. I think we've really achieved that in a lot of ways.
We'll get to the names, I won't jump my own presentation, but this gives it tells you we're active, but not too crazy. This is a bit dated. One thing about us is we only give you a net asset value four times a year, and there's a bit of a lag to that. This is the March quarter. Obviously, the quarter, we do a calendar quarter, June will be our next one. Fully audited, you can see this is a pretty interesting pie with SpaceX going public June 12th, allegedly. That's 32% of our NAV. You see the like Canva, we think is a top three IPO. Crusoe Energy, I don't know how well that's known, but they built Stargate for OpenAI.
Locus Robotics, that's third-party logistics moving. Like, for example, in a Nike factory, they move all the shoes. They've just, in the last two to three months, they've added a picking arm, so you can go full automation. What's really cool about Locus as well, you can retrofit it. You don't have to purpose build your facility and put all that CapEx in. OpenAI, ChatGPT, pretty confident everyone here knows what that is. One of the fastest-growing companies in history. CoreWeave. That's actually another noteworthy thing. After something's been public for 12 months, our strategy is, it doesn't have to be, like within 10 minutes, to move on and get you another public company. Our job is to get you private companies you can't get.
We're not gonna be a public listed holding company. We're also not gonna, you know, throw it out the first day of trading either. We're gonna strategically do that in a way that we think's responsible for the portfolio as we are, as I said earlier, amongst the biggest shareholders. We care a fair bit. Omio is a travel business. Hopper is a travel business. Hopper is an interesting one. For example, their biggest client has been Capital One. They took over their travel platform, and it used to be 98% redemptions. They got it to 50% redemptions, 50% cash pay 'cause it works.
I have a Canadian, one of the big banks, I have a travel card, and you get in a big fight with your wife 'cause it's slow, it's onerous, it takes two hours to book a flight. They've 85% of Hopper's business is travel platforms. They have the number one bank in Australia. They just landed the number one bank in Canada, they've got some very large U.S. partners that's developing that you'll see in the news over the next little while. Prove's really interesting. That's identity verification in the background. Every time you get an Uber, it identifies the driver, and it identifies the passenger for safety reasons, you know, obviously, every time you go to your online bank account. They actually have the 20 largest U.S. financial institutions for identity.
That's a New York-based thing. truthfully, I don't even think they'll ever go public. I think they'll get bought because it's such a strategic asset. For example, Visa has five billion identity tokens. Prove has one billion. Mastercard or a Visa probably buys this. I think we'll make a lot of money, but you won't see it as a darling IPO. It'll be gone. That's just our opinion, but usually pretty good at guessing these things, but we'll see. Databricks, obviously everyone knows that. That's a front seat for the AI trade. You sort of see the theme of what excites us. Shield AI, that's kind of a smaller weight, but basically they have an AI pilot that 18 out of 18 times beats the Coronado Airforce Base.
It literally beats a real live pilot every time. They also have a drone business where they have a hive software where you can't jam them, and that's, like, widely used. They're not, they don't have payload on them. It's more for reconnaissance, but it's a leading-edge technology and a business that's super cool. Xanadu is just a small, that's a quant computing play out of Canada. We, a tiny little thing, but it was sort of a more of a trade for us. Went really well, but it's, you know, it's less than 1%. There's not a lot to talk about there. That gives you an idea. SpaceX. I'll move along a little bit.
That's in cash terms, just the same breakdown of what we looked at. Went through some of the names. SpaceX. June 12th, probably going public, probably $1.75 trillion, floating $75 billion. What attracted us to SpaceX? Double monopoly. They have 80% market share on launch, and their real competitors are the Russians and Chinese. I'm fairly confident that with current dynamics, we're not gonna let them launch our stuff anytime soon. What also really excited us is the Starlink business. There's 2.8 billion people in the world without internet, and they have 10 million subs. That's dated, so they have more than that. My point is, you're barely at a basis point of market share. What's also cool about Starlink is the other uses.
For example, you go on any cruise ship, Starlink. Most of the good airlines, Starlink. RVs, Starlink. The backpack global, Starlink. Your cell phone will work anywhere in the world with the next generation likely. That'll be Starlink. It'll be interesting to see if they have their own handset or they. Right now they have a bunch of partnerships on that. You know, if you're lost on Everest, that you can still text using the Starlink technology, but the next generation will actually work as a phone as well. They strapped on xAI. Obviously a much smaller part of the business, but not nothing. Twitter is in that as well. You know, valuation-wise, Twitter, you know, I think he privatized it at CAD 42 billion or CAD 44 billion.
It'll be interesting to see how this all comes to play. The future for SpaceX is data centers in space. Frankly, that's probably beyond our timeframe. Going to Mars is also beyond our timeframe, but good luck. What is really cool about that, like, we did not invest for that business whatsoever, but all the smartest guys in the world wanna work on going to Mars. It really helps you get the smart- Like Elon, love or hate him, whatever, I don't get into that. He's unbelievable at getting people behind his vision. The fact that, you know, the fact you can recruit all you know, that much firepower in the world is pretty cool. I'll keep it moving.
Canva, these numbers are a bit dated, but 265 million monthly users, over CAD 4 billion of ARR. It grew 45% last year. We're pretty tight with management. We see them regularly. Just a cool business. We think that's a top three IPO probably next year. Canva has their own large language model. You can literally say, "Build me a presentation for Stack Capital to present at LD Micro," and boom, it'll do it. It's unbelievable. It's really cool. That'll be a darling. They really have done a good job of moving with the times and being front row for the AI trade. But software is under, I say it's one of the few names where there's a bit of controversy, but we think they're at the cutting edge and gonna be fine.
You can't really argue with their numbers anyway, so it's a really good business. OpenAI, ChatGPT, that's Anthropic, obviously, two of the fastest growing companies of all time. We're of the opinion that OpenAI has barely even started getting paid for the businesses that they can get paid for. So that'll be, you know The use cases are staggering and you're, you know We think this trend of AI changing Like, there's not a day that goes by I don't use this at work. We also use Claude a lot of times, which is Anthropic's large language model. It literally One of the things that AI does is it kinda makes you worry, like, how jobs are gonna change, and that's not really our job to worry about that.
It's like the changes are coming and a lot of industries are going to be revolutionized. I think healthcare is a great example where we could use some efficiencies and some cost savings. I think Canada and U.S., in both our countries, you know, it will really help some of the backlogs in healthcare and make things more efficient, which I think we could use. Locus Robotics. They literally, the biggest clients, UPS, DHL, and FedEx. When you're shipping packages, they move all the boxes around and send them out for shipping. They literally, two months ago, I said this in past, there's a picking arm, so it literally can do everything. You could actually have a dark facility, meaning no humans.
All these efficiencies lead you to a pace where we're going to have to find new things for people to do, I'd rather benefit from it than not. This is the travel portal, Hopper. It's 85% of their business is enterprise, I don't need to talk more about that. Crusoe is cool because basically it's compute power. I think you see the theme in the portfolio. We think AI is going to be pretty special. Crusoe is really interesting because they took all the cash flows from building Stargate and other key businesses, and then they parlayed that into owning their own data centers that will get paid. The other, you know, the controversy I would say in this space, we've done a crazy amount of work and we're friends with management teams in the space.
Compute shortage, that's here to stay at least for multiple years, which is a bit beyond our time horizon. We're very comfortable this is gonna be a great place to be, and we're excited what has to come. Shield AI, I already talked about that. Databricks, so that's, again, right at the front of the AI trade. They probably come late in the year. I should mention that too. OpenAI could easily go public late in the year or sometime in 2027. Databricks is strongly rumored to be coming late this year. They grew 65% last year. It tells you they're front and center for the same, for analyzing and computational data. It's an amazing business. X-energy's a cool one, small nuclear reactor. This is a smaller weight for us.
I think we put $5 million US into it in December. We're actually friends with the management team. Been down to see them lots of times. It's a guy named Kam Ghaffarian. He has a bunch of public companies. Basically, we think the energy shortage is here to stay. We think these guys have the leading-edge technology. We bought it in December. We were pretty confident they were gonna go public. They already went public two weeks ago. We've made, basically a 100% return so far, and think that Amazon led two rounds. U.S. government invested. Ontario Power Generation is a leader in nuclear in Canada. They're an investor.
It just sort of hit a lot of the themes that we like, and it was also a very short time horizon to go public, so we were cool with that. One thing. We're going to get into questions really quick, but what happens to life after SpaceX? We just added FluidStack, which does all the compute for Anthropic. We're super excited about that. It wasn't on the chart, but we announced it with our quarter because otherwise I wouldn't talk about something. It's in our quarter. We bought a big chunk of FluidStack. We think Anthropic's going to do pretty well, and it was sort of an Anthropic-adjacent investment that we were really excited by. There's even rumors they're in talks to raise at over twice what we paid for our stock, so that's encouraging.
Crusoe's also strongly rumored in talks 2.8 times higher than what we paid for in around November for that stock. This is the management team. I'm the number two guy on the pictures. Strong team. Young, youthful, hardworking, and very exciting times. Board of directors, third guy in, he ran a public company in Canada, sold two. We sold CAD 1.2 billion to Goldman Sachs Growth Equity. We're gonna run out of time. Bill Tai, one of our advisors, first investor in Zoom, first investor in Canva, first employee of Taiwan Semiconductor, related to Jensen. It's kinda crazy. Number two, Constellation Software, that's one of the most highest performing software companies in Canadian history. Stock went from like CAD 10 to like CAD 2,600. Incredible. Anyway, you get the idea. We know lots of people.
Now, I wanna leave, four minutes left. Does anyone have any questions?
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Yes, which is the biggest exchange in Canada.
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We're just a Corp, we're actually a Corp, publicly audited, quarterly results. That's why we're in Canada. We'd have to be a BDC in the States. Frankly, the bigger we are, the more liquid we are, the more investable. We raised money about six weeks ago, 10 institutions played. If you look on Bloomberg, some big institutions have bought us recently. We're getting a lot more attention in the States. Our closest comp in the States is VCX. It trades at 12 times NAV.
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No.
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No. We're just a corp in Canada.
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No, we pay tax as a corp.
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Yep.
My other question is, [audio distortion] , how much of the stock that you're buying is from the issuer themselves versus tenders?
Probably 70/30. Like, that's off the top of my head, but the majority is through, like, a tender or a secondary or a primary, and then we'll take that knowledge base and then go buy things if we see them off-market.
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Well, it could be ex-employees.
I'll give you an example. Like, we just bought more Hopper. We're very tight with the top two management teams, so we used our information base and bought stock of a bunch of ex-employees. We'll do both, and we originally bought our stuff out of tender.
[audio distortion]. I mean, obviously, there was a lot of attention in the last week or so around both Anthropic and OpenAI canceling, you know, unauthorized transfers. Is there any risk for any of yours-
We're-
That brings the related part. Some of these are held in for SPVs. Are you guys As a shareholder, am I paying an additional management fee because those SPVs are sponsored by a third party, and there's a performance piece on that? Or am I just paying [audio distortion]
What I would say is we've been very careful about how we've sourced our things. I think counterparty is the biggest thing we take. I think there's diligence from the auditors on that as well. We would not pay double management fees or anything like that.
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Correct.
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The 40 Act, it ties back into. The short answer is no. It's something we'd maybe consider in the future, but we're very happy where we are, and we're getting the attention and the access to institutional investors that we want. Like, we have four. Two cross-border firms cover us, like, Raymond James and Canaccord. A U.S. guy, Barrington, covers us. Then, there's a smaller Canadian one you wouldn't heard of, so that doesn't really help. I think we'll see more people cover us over time, and we're very happy with how our profile's come along.
We have enough time for one more question.
Yeah. As a foreign issuer, [audio distortion]
Nope. We're just a public corporation.
No, no. If you file as a foreign issuer and become an F filer, are you caught by the [audio distortion]
No, I don't believe we are. We're just a Canadian corp.
Okay. Outside of stocks, [audio distortion]
Nope. That's another point I should have made. We don't put debt on any of our company. Stack itself does not use any leverage and never will. All right. Thanks, everyone.