Video game technology company Swarmio Media, which has offices in Halifax, Sydney and the Toronto area, began trading on the Canadian Securities Exchange Monday, with shares spiking early in the day before surrendering most of their gains.

The listing made good on plans announced by Swarmio in July. At the time, the company said it hoped to raise about $5 million. The listing process beat expectations, raising about $6.27 million via sales to retail and institutional investors in June, September and October.

The shares opened at 40.5 cents and peaked at 90 cents before sliding back to 56 cents, according to the CSE website. The company, whose investors include Innovacorp, as of the close Monday had a market capitalization of $54.8 million. 

“Swarmio is entering a key growth phase, and we believe that strategically now is the right time to take the company public to better position us to capitalize on the major global opportunity in the gaming and exports market,” said Swarmio CEO Vijai Karthigesu in a press release.

Swarmio’s platform is designed to compensate for latency in multi-player online games. When players in different parts of the world are competing against each other, the system is much faster for the player closest to the gaming company’s server, giving them an advantage. Swarmio’s solution is to develop a network of remote servers, so each player is accessing servers the same distance away.

In July, Karthigesu told Entrevestor the public listing was spurred by a dearth of Series A venture capital funding in Canada and a strong appetite for small cap stocks from Canadian investors.

“From our experience of raising funds in Canada, there's lots of abundance of seed funding and pre-Series A funding,” he said. “And when it comes to Series B and Series C, there are companies who can write the $100 million cheque. But Series A capital, there is very little, almost none in Canada.

“We are a Canadian company. And if we want to stay in Canada, instead of moving out, we have no other options.”

The shares opened amidst an environment in which Canadian tech IPOs have been increasing in volume but underperforming in the market. An analysis by The Globe and Mail in October found that the average return for a tech IPO over the past year has been minus 2.4 percent, compared to 16 percent average gains market-wide.

Swarmio shares are backed by strong revenue growth. In 2020, the company made $84,999 of revenue, up from just under $5,000 in 2019 -- about 1,700 percent year-on-year growth.

The shares Swarmio sold to retail investors were brokered by financial services firms that included Canaccord Genuity Group and Haywood Securities. And Karthigesu said in July that several high-net-worth investors bought in thanks to the efforts of Ray Sharma, founder of Toronto-based Extreme Venture Partners.

He added that money raised will go towards funding further expansion into new markets, including by hiring more staff. At the time, the company had just hired 10 people for a total of 40 employees.