Four growth deals all priced above their respective ranges and traded up on their market debut. Notably, next-generation database company MongoDB priced above its upwardly-revised midpoint and traded up 34% on its first day.
This week saw two of the five largest deals this year, which included Chinese small loans provider Qudian's $900 million IPO, followed by leading Southeast Asian gaming platform Sea's $884 million IPO.
| 5 IPOs During the Week of October 16th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 10/20 |
| Qudian (QD) | $900 | $8,095 | 17.1% | 21.6% | 37.5% |
| Provides small loans and installment-based financing for e-commerce in China | |||||
| MongoDB (MDB) | $192 | $1,396 | 26.3% | 33.6% | 27.8% |
| Provides enterprises with an open source NoSQL database platform. |
|||||
| RISE Education (REDU) | $160 | $798 | 11.5% | 14.6% | 14.6% |
| Chinese provider of after-school English lessons backed by Bain Capital. |
|||||
| Sea (SE) | $884 | $5,771 | 15.4% | 8.4% | 8.4% |
| Leading online gaming and shopping platform in Southeast Asia. | |||||
| Mosaic Acquisition (MOSC.U) | $300 | $375 | 1.5% | 0.0% | 1.3% |
| Blank check company formed by Fortress and the Executive Chairman of Spectrum Brands. | |||||
| RumbleOn (RMBL) | $16 | $74 | 0% | -7.5% | -6.4% |
| Launching an online marketplace for motorcycles. |
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Database software company MongoDB (MDB) priced 26% above the midpoint to raise $192 million. MongoDB is the first unicorn to go public since Blue Apron (APRN: -49.2% from IPO price) and has reaffirmed investors' appetite for large high-profile US software deals.
Sea (SE), a leading gaming and e-commerce platform in Greater Southeast Asia (GSEA), priced its upsized IPO 15% above its midpoint, raising $884 million (37% more than previously anticipated). Despite breaking issue on its market debut, Sea finished the day up 8%. The company has a unique mix of business segments (gaming, e-commerce and payments) and a rapidly growing, yet largely unmonetized e-commerce business.
Qudian (QD), which provides small, short-term loans to Chinese consumers online, priced its IPO 17% above its midpoint. The stock traded up 22% on its first day and finished the week up 38%. The company's close public peer, Yirendai (YRD), has returned over 400% since its 2015 IPO.
RISE Education (REDU), a leading Chinese provider of after-school English lessons, raised $160 million and priced 12% above its midpoint. Sole shareholder Bain Capital sold 12% of its stake, representing 55% of the deal size. The stock traded up 15% on its debut. RISE Education is the third Chinese for-profit education company to go public this year, following RYB Education (RYB: +48% from its IPO price) in September and Bright Scholar Education (BEDU: +150%) in May.
RumbleOn (RMBL), a micro-cap motorcycle e-commerce company, raised $16 million in its IPO uplisting. The pre-revenue company offered 2.9 million shares at $5.50, below its last close of $9.30 on the OTCQB. At pricing, the company commanded a market value of $74 million; prior to the offering. The stock fell 8% on its debut.
Mosaic Acquisition (MOSC.U), a blank check company formed by Fortress and the the Executive Chairman of Spectrum Brands (NYSE: SPB), raised $375 in its IPO and ended the week up 1.3%.
LivexLive Media (LXL), which provides an online network for streaming live music and content, failed to price its IPO. It had planned to raise $100 million by offering 7.7 million shares at a price range of $12 to $14 million. At the midpoint of the proposed range, it would command a market value of $571 million.
IPO Pipeline Update: 8 filings, led by BP's MLP
Eight companies set terms last week. BP Midstream Partner (BPMP) filed to raise $850 million; the MLP is being formed by BP as a growth vehicle with an initial focus on pipelines around its marquee refinery in Whiting, Indiana and its offshore assets in the Gulf of Mexico. Evoqua Water Technologies (AQUA) filed to raise $500 million; the company has reportedly been running a dual-track process with Honeywell International (NYSE: HON) rumored to be an interested bidder. National Vision (EYE) filed to raise $300 million. The company was taken private by Berkshire Partners in 2005 for approximately $104 million and subsequently acquired by KKR & Co. in 2014 for just over $1 billion. Ablynx (ABLX), a Belgian biotech which is developing single-domain antibodies derived from llamas filed to raise $150 million. Altair Engineering (ALTR), which provides enterprise-class engineering software, filed to raise $144 million. Enterprise security software provider ForeScout Technologies (FSCT), filed to raise $101 million. Indiana bank focused on FHA loans and warehouse mortgage financing Merchants Bancorp (MBIN) filed to raise $100 million, and ACM Research (ACMR), which sells single-wafer wet cleaning equipment filed to raise $17 million.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 33.7% year-to-date, ahead of the S&P 500, which is up 15.0%. 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 27.1% year-to-date, while the ACWX is up 22.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include ABN AMRO Group and Covestro.
