CarGurus leads the way with a $132 million offering in a week with four IPOs set to raise a combined $309 million. The online car marketplace is joined by two specialty medical device companies; a fourth company is commercializing a combination drug-device.
The IPO market picked up on Friday with launches from database platform MongoDB (MDB), Tencent-backed Southeast Asian gaming platform Sea (SE) and China-based RISE Education (REDU), which join Qudian (QD) for the week of October 16. Midwest mortgage lender Merchants Bancorp (MBIN) could also launch by the end of the week.
| US IPO Calendar | |||||
| Issuer Business |
Symbol Exchange |
Deal Size($m) Market Cap($m) |
Price Range Shares Filed |
Pricing Week |
Bookrunners |
| CarGurus Cambridge, MA |
CARG Nasdaq |
$132 $1,572 |
$13 - 15 9,400,000 |
10/9 | Goldman Sachs Allen & Company RBC Capital Markets |
| Online marketplace for buyers and sellers of new and used cars |
|||||
| OrthoPediatrics Warsaw, IN |
KIDS Nasdaq |
$52 $157 |
$12 - 14 4,000,000 |
10/9 | Piper Jaffray Stifel |
| Sells orthopedic devices specialized for children. | |||||
| Restoration Robotics San Jose, CA |
HAIR Nasdaq |
$25 $237 |
$7 - 9 3,125,000 |
10/9 | National Securities |
| Sells robotic systems that assist doctors with hair restoration surgery. |
|||||
| OptiNose Yardley, PA |
OPTN Nasdaq |
$100 $625 |
$15 - 17 6,250,000 |
10/9 | Jefferies Piper Jaffray BMO Capital Markets |
| Commercializing a drug-device nasal spray for chronic rhinosinusitis. | |||||
CarGurus (CARG) aims to raise $132 million at a $1.6 billion market cap. The online car marketplace, which boasts over 5.4 million US car listings (the most in the US), has rapidly expanded market share with over 90% of US dealerships on its freemium subscription model. The company grew revenue 70% in the 1H17 to $143 million, expanding its operating margin to 9%. In the near-term, international expansion will drag on margins, but its US business is well-positioned to generate strong cash flow.
OrthoPediatrics (KIDS) is set to raise $52 million at a $157 million valuation. The company is developing orthopedic devices for children and addresses an unmet need in the market; traditionally, surgeons have had to repurpose adult implants for children. While the company operates at a loss, it has grown revenue in the $2.5 billion pediatric orthopedic market at a 20%+ CAGR for the past five years and its strong pipeline should support continued growth.
Restoration Robotics (HAIR), which sells its patented ARTAS System to assist surgeons with hair restoration procedures, aims to raise $25 million. At a $237 million market cap, the company is only floating 10.5% of its shares. While revenues fell almost 10% in 2016 to $15.6 million, gross margin expanded nearly six points to 33%.
OptiNose (OPTN) aims to raise $100 million at a $625 million market value. The pre-revenue company recently announced that it received FDA approval for its nasal spray delivery system XHANCE, which it expects to launch in the US in the 2Q18. Insider Avista Capital Partners plans to invest $25 million at the offer price.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 30.0% year-to-date, ahead of the S&P 500, which is up 13.9%. 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 25.9% year-to-date, while the ACWX is up 20.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Covestro.
