Online learning software company D2L Inc. on Thursday confirmed it has cut the price of its initial public offering and reduced the deal size by a quarter.

The Kitchener-based technology firm, founded in 1999 by a University of Waterloo student, announced plans to sell shares for $17, raising a total of $150 million.

Earlier this month, D2L set a target price range of $19 to $21 for a total raise of $200 million.

The company offered no reasons for the more conservative IPO in a press release announcing the change. But a source familiar with the matter told BNN Bloomberg that D2L executives explained to prospective investors that they lowered the price to ensure shares traded up after their market debut.

Typically, a reduced IPO reflects weaker demand for the offering.

D2L did not respond to two emailed requests for comment.

The company, which builds and supports digital classrooms and learning platforms, has benefited from a pandemic-driven shift to online learning.

In its prospectus, D2L, which counts the Toronto District School Board amongst its clients, said it saw a 200 per cent surge in new bookings in the early months of the COVID-19 crisis. But concern about the permanency of the shift to digital learning has dogged the company.