IPO revival may wake up Canadian venture market

* Activity in public markets signals opportunity

* Technology IPOs expected in coming months in US, Canada (In U.S. dollars unless noted)

By Pav Jordan

TORONTO, Oct 1 (Reuters) - For Silicon Valley resident Rob Chaplinsky, each Canadian city has its charm, but he's not talking about Parliament Hill in Ottawa, the Old Town in Montreal or the CN Tower in Toronto.

Chaplinsky, a U.S.-based technology investor with $180 million in his pocket for Canadian investments, is talking about imaging in Montreal, communication infrastructure in Ottawa, enterprise software in Toronto and social media in Vancouver.

"There's a significant number of potential companies here that would benefit from a Silicon Valley investor who wants to put his flag down and invest and help these companies grow to be bigger companies," Chaplinsky said.

The signal of opportunity, he added, is bubbling activity in public markets.

At least seven companies have filed preliminary prospectuses over the past month for initial public offerings, or IPOs, in Canada, including one by retailer Dollarama to raise some C$300 million ($278 million) to help it add new stores.

A number of bought-deal financings -- including Canada's largest ever, a C$3 billion bought deal by Barrick Gold (ABX.TO), the world's largest gold producer -- have also added to enthusiasm that money is returning to markets.

"If Dollarama is successfully IPO'd, and the institutional investors who bought that story are making money, then the appetite is going to be, 'show me more'," said Chaplinsky, who runs Bridgescale Partners Fund. "And the bankers are going to start calling all of these young technology companies saying, 'You know, I think there is probably appetite for you'."

Capital markets began to turn in Canada in June as three companies raised nearly C$1.5 billion. The waters then quieted until mid-August, when Eldorado Gold Corp (ELD.TO) proposed a C$2 billion acquisition of Sino Gold Mining Ltd SGX.AX and Vancouver-based Mercator Minerals (ML.TO) announced a C$70 million bought deal financing.

"I think the level of activity will support some enhanced liquidity in the venture-capital private equity market. It sets the foundation for fund-raising," said Gregory Smith, the president of Canada's Venture Capital and Private Equity Association (CVCA).

Smith sees an uptick in markets, in private equity and venture capital, in the months ahead after several quarters in the doldrums. [nN10476195]

He said he has also heard rumblings about more technology IPOs to come in Canadian and U.S. markets.

"My anticipation is we'll see more activity as we head into the fourth quarter," Smith said in a telephone interview.

Chaplinsky, a member of the CVCA who specializes in investing in private technology companies, says contributors to his U.S. fund are international limited partners, including some from the immensely successful companies that populate Silicon Valley.

He is hoping links to the world's best-known hub for technology investment will make him a good choice for small- to mid-sized Canadian firms as one of the nation's great start-up incubators, Nortel Networks, is being lost to bankruptcy and dismantlement.

Chaplinsky, a former Toronto native who said he expects to announce a major investment in a technology company in coming days, says the fund wants to buy $10 million- to $20 million-stakes in companies that already have revenues and need capital to grow.

($1=$1.07 Canadian) (Reporting by Pav Jordan; editing by Peter Galloway)