Seven IPOs are set to price next week, expecting to raise a combined $1.8 billion. Three Asian deals lead the way, notably, Chinese small loans provider Qudian plans to raise $769 million and Singapore-based online gaming and shopping platform Sea plans to raise $646 million in the two largest deals of the 2H17. Chinese education company RISE Education is also set to price.
Quiet Periods
The quiet periods for seven IPOs are set to expire next week. Street research is expected for leading Latin American OTA Despegar (DESP: +26.9% return from IPO price) and Best (BSTI: +10.8%), China's fastest-growing delivery company, on Monday, followed by Chinese online retailer Secoo Holding (SECO: -46.4%) on Tuesday.
| US IPO Calendar | |||||
| Issuer Business |
Symbol Exchange |
Deal Size($m) Market Cap($m) |
Price Range Shares Filed |
Lead Bookrunners |
|
| Qudian China |
QD NYSE |
$769 $6,915 |
$19 - 22 37,500,000 |
Morgan Stanley, Credit Suisse, Citi |
|
| Provides small loans and installment-based financing for e-commerce in China. | |||||
| RumbleOn Charlotte, NC |
RMBL Nasdaq |
$19 $119 |
$9.49 - $9.49 2,000,000 |
Roth Capital, Maxim Group |
|
| Launching an online marketplace for motorcycles. | |||||
| LiveXLive Media Beverly Hills, CA |
LXL NYSE |
$100 $587 |
$12 - 14 7,692,308 |
BMO Capital | |
| Provides an online network for streaming live music. | |||||
| MongoDB New York, NY |
MDB Nasdaq |
$152 $1,085 |
$18 - 20 8,000,000 |
Morgan Stanley, Goldman Sachs, Barclays |
|
| Provides enterprises with an open source NoSQL database platform. | |||||
| RISE Education China |
REDU Nasdaq |
$143 $715 |
$12 - 14 11,000,000 |
Morgan Stanley, Credit Suisse, UBS Investment |
|
| Chinese provider of after-school English lessons backed by Bain Capital. | |||||
| Sea Singapore |
SE NYSE |
$646 $4,881 |
$12 - 14 5,666,667 |
Goldman Sachs, Morgan Stanley, Credit Suisse |
|
| Online gaming and shopping platform in Southeast Asia. | |||||
| Mosaic Acquisition New York, NY |
MOSC.U NYSE |
$300 $375 |
$10 30,000,000 |
Deutsche Bank, RBC, J.P. Morgan |
|
| Blank check company formed by Fortress and the Executive Chairman of Spectrum Brands. | |||||
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Qudian (QD), which is the largest provider of small cash credit products in China, plans to raise $769 million. For the six months ended June 30, 2017, total revenues rose 393% to $270 million, largely due to its integration with Ant Financial's Alipay platform. Qudian had 7 million active borrowers in the 1H17, up from 2.5 million in the prior period. Operating income increased 669% to $172 million as operating margins expanded from 40% to 64%.
Sea (SE), an online gaming and shopping platform in Greater Southeast Asia, plans to raise $646 million and recently disclosed that primary backer Tencent (HGK: 0700) intends to invest $100 million (15% of deal size) on the IPO. The company generates revenue from in-game virtual items (92% of 1H17 revenue), as well as its e-commerce platform Shopee (began monetization in 2017) and digital payment processor Airplay. During the 1H17, revenue rose 17% to $195 million, gross profit declined 6% to $53 million (27% margin), and operating loss more than doubled to $150 million. It ended the quarter with an accumulated deficit of $711 million and post-IPO cash of $1.3 billion.
Backed by Bain Capital, RISE Education (REDU), plans to raise $143 million with Bain selling 55% of the deal. The leading provider of after-school English lessons generates revenue through tuition for its educational programs (86% of 1H17 revenue), franchise fees (12%) and complementary products, like overseas study tours and camps (2%). The company operates a network of 246 learning centers (190 franchised; 56 self-owned) across 80 cities in China, and had 26,600 student enrollments (+48%) in the 1H17.
Leading provider of freemium NoSQL database software MongoDB (MDB) plans to raise $152 million. For the six months ended July 31, 2017, total revenue jumped 51% to $68 million. Gross profit rose 58% to $49 million, and gross margin expanded 320 bps to 71%. Operating loss remained flat at $46 million. The company ended the period with an accumulated deficit of $393 million.
LiveXLive Media (LXL), which provides an online network for streaming live music, set terms to raise $100 million. As of June 30, 2017, the company had an accumulated deficit of $31 million and its auditors cited its ability to continue as a going concern. Operations to date have primarily consisted of identifying and acquiring businesses: the company most recently acquired Wantickets in May 2017 and plans to close on Slacker Radio and SNAP Interactive (OTC: STVI) post-IPO.
RumbleOn (RMBL), which provides an online marketplace for motorcycles and other power sport and recreation vehicles, plans to raise $19 million on its IPO uplisting. The company's Class B common stock is currently traded on the OTCQB marketplace under the symbol "RMBL."
Blank check company Mosaic Acquisition (MOSC.U), which was formed by David Maura of Spectrum Brands and Fortress Investment Group, plans to raise $300 million.
Additionally, franchised burger chain Fat Brands (FAT) is expected to price its $24 million Regulation A+ IPO at week-end, and begin trading early next week.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 31.9% year-to-date, ahead of the S&P 500, which is up 14.0%. 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 28.5% year-to-date, while the ACWX is up 22.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Covestro.
