Eight deals priced this week, raising a combined $740 million. Meal-kit unicorn Blue Apron led the pack along with two banks, four biotechs and an enterprise storage provider. The week also saw one SPAC IPO and one Reg A+ offering.
Before this week, the year's eight VC-backed tech IPOs averaged a first-day pop of 30%, each notching double-digit gains on day one. This week, Blue Apron and Tintri ended their first days up 0% and 4%,, respectively. Investors may still be enthusiastic about growth, but concerns over high valuations and a path to profitability have not gone away.
| 8 IPOs During the Week of June 26th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 6/30 |
| Avenue Therapeutics (ATXI) | $33 | $51 | -40.0% | +37.5% | +31.3% |
| Fortress Biotech spinoff developing an IV formulation of the opioid tramadol. |
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| Dova Pharmaceuticals (DOVA) |
$75 | $447 | +6.3% | +16.5% | +16.5% |
| Commercializing an acquired drug candidate for low blood platelets. |
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| Esquire Financial Holdings (ESQ) |
$33 | $99 | -6.7% | +8.9% | +6.1% |
| Commercial bank providing attorney-related loans with over $400 million in assets. |
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| Blue Apron Holdings (APRN) |
$300 | $1,964 | -37.5% | 0.0% | -6.6% |
| Leading meal-kit delivery service in the US. |
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| Byline Bancorp (BY) |
$108 | $544 | -5.0% | +5.5% | +5.5% |
| Chicago bank with 56 branches and $3.3 billion in assets. |
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| Tintri (TNTR) | $60 | $234 | -39.1% | +3.9% | +3.9% |
| Sells all-flash storage arrays and software to create enterprise clouds. |
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| Mersana Therapeutics (MRSN) |
$75 | $380 | 0.0% | -6.7% | -6.9% |
| Early-stage biotech developing antibody drug conjugate therapies for cancers. |
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| Aileron Therapeutics (ALRN) |
$56 | $234 | -6.3% | -28.0% | -25.7 % |
| Biotech targeting a range of cancers using stapled peptides. |
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Indigestion: Blue Apron breaks issue
Meal-kit delivery unicorn Blue Apron Holdings (APRN) raised $300 million by pricing at $10, down from an originally-planned $480 million at $15-$17. It finished the week down -6.6%. Even before Amazon announced its acquisition of Whole Foods, Blue Apron faced questions over competition and customer acquisition. Its first quarter results showed it needed to spend heavily to maintain growth, driving down its once-positive EBITDA to -19%. With no close peers, Blue Apron could trade in a wide band, and the market currently appears skeptical. Investors now await the results of a very important second quarter.
Tintri prices at low-end of revised range and trades up
Tintri (TNTR), which sells all-flash storage arrays and software to create enterprise clouds, priced well below its range at $7 to raise $60 million, including $23 million added from insiders to get the deal done. It traded up 3.9%. Like close peers Pure Storage (PSTG) and Nutanix (NTNX), Tintri has consistently sustained high losses, but it has failed to grow nearly as fast. Additionally, valuation multiples for enterprise storage companies have contracted over the past few years. Post-IPO, Tintri has raised roughly $300 million since inception, or 30% more capital than its IPO market cap.
Two bank offerings
Byline Bancorp (BY), a Chicago bank with 56 branches and $3.3 billion in assets, priced its IPO at $19, the low-end of its $19 to $21 range, and finished the week up 5.5%. Esquire Financial Holdings (ESQ) priced at the $14 low-end of its range in a downsized offering. Esquire, a Jericho, NY-based bank focused on attorney-related loans, raised $33 million and finished the week up 6.1%.
Biotechs
Four biotechs IPO'd this week, led by Dova Pharmaceuticals (DOVA), which priced at the high end of its range and raised $75 million. Dova is a late-stage pharmaceutical focused on commercializing an acquired drug candidate for low blood platelets. Insiders bought one third of the deal, and the stock traded up 16.5% this week. Micro-cap opioid biotech Avenue Therapeutics (ATXI) also traded well (+31.3%) and raised $33 million after slashing its range by 40% prior to the offering. Mersana Therapeutics (MRSN), an early-stage biotech developing antibody drug conjugate therapies for cancers, raised $75 million. It priced at the $15 midpoint and has traded down -6.9% this week. Aileron Therapeutics (ALRN), which is targeting a range of cancers, also stumbled out of the gate. While the biotech is backed by venture firms and several large pharma companies, it has traded down -25.7% after raising $56 million in its IPO.
A SPAC and a Reg A+ IPO
Fresh after their prior SPAC acquisition of Playa Resorts (PLYA), TPG and Karl Peterson raised $400 million through TPG Pace Holdings (TPGH.U) this week. A total of 15 SPACs have raised $4.6 billion so far this year, more than all of 2016, putting the year on track to be the most active for SPAC IPOs since 2007. ShiftPixy (PIXY), a platform for restaurants to fill shifts with temporary workers, raised $12 million by offering 2 million shares at the $6 low end in one of the first-ever major Reg A+ IPOs. It commanded an IPO market cap of $180 million before trading up 28.3% on Friday. While neither deal is counted toward our IPO stats, Reg A+ may be an area to watch.
IPO pipeline update: Four new filings, plus two SPACs
Four companies joined the IPO pipeline this past week. Best (BEST.RC), an Alibaba-backed Chinese logistics company filed to raise $750 million. Redfin (RDFN), an online real estate brokerage, filed to raise $100 million. RBB Bancorp (RBB.RC), a commercial bank focused on serving first generation Asian immigrants, filed to raise $83 million. Clementia Pharmaceuticals (CMTA), a clinical stage biotech focused on treating bone diseases, filed to raise $115 million. Lastly, two SPACs, Osprey Acquisition (OSPRU) and Industrea Acquisition (INDUU), filed to raise $250 million and $200 million, respectively.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 20.7% year-to-date, ahead of the S&P 500, which is up 8.3%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Ferrari (RACE) and First Data (FDC). The Renaissance International IPO Index is up 15.8% year-to-date, while the ACWX is up 13.2%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Covestro and Worldpay. To find out if this is the best ETF for you, visit our IPO Investing page.
