Two Chinese companies raised a combined $138 million to close out 2017 with an even 160 IPOs. The deals included online lender LexinFintech Holdings and adtech firm iClick Interactive. Given the recent sell-off of US-listed Chinese tech firms, it was notable to see these deals come to market. Both priced down and traded up; however, we acknowledge that they were likely largely sold to Asian investors. Advantage Insurance was expected to IPO this week, but the high-net worth insurance company postponed its offering. The week also saw initial filings from two Apollo LBOs, as the private equity firm prepares to IPO security provider ADT and electronic slot machine company PlayAGS in 2018.
The 160 IPOs this year raised total proceeds of $36 billion. Average first day return was 12% and total return was 24%. For a deep dive into the 2017 US IPO market, and to see our expectations for next year, check out Renaissance Capital's 2017 US IPO Annual Review.
| 2 IPOs During the Week of December 18th, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap at IPO ($mm) |
Price vs. midpoint |
First day return |
Return at 12/22 |
| LexinFintech Holdings (LX) |
$108 | $1,623 | -10.0% | +18.9% | +57.8% |
| Online consumer lending platform in China. |
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| iClick Interactive (ICLK) | $30 | $428 | -5.9% | +12.5% | +12.5% |
| Independent online marketing technology platform in China. |
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LexinFintech Holdings (LX) raised $108 million, pricing at the $9 low end of the range. It traded up 58% on the week, bucking the trend of poor performance from recent Chinese lending IPOs (Jianpu, Qudian, PPDAI and China Rapid Finance average -27% from IPO). Lexin has generated strong growth driven by a sticky customer base of educated young consumers, and while regulatory uncertainty has roiled the space, it could be a net positive for the largest players. However, we note that heavy insider buying resulted in a low float and low trading volume for the stock.
iClick Interactive (ICLK) also priced at the low end and raised $30 million. The online ad tech firm popped 13% on its first day. The company is one of the larger independent players in the fast-growing mobile marketing market. However, the space is highly competitive and controlled by internet giants Tencent and Baidu. Prior to the deal, iClick switched around its lead underwriters several times, first filing with Credit Suisse and Nomura, then with Network 1, and finally with Roth Capital.
Private Company Updates: Pinterest delays to 2019, Spotify moves forward
Photo-sharing website Pinterest, which had been targeting a 2018 IPO, reportedly pushed back plans to 2019 after missing its $500 million revenue target for 2017. To date, the company has raised over $1.3 billion from notable VCs Bessemer and FirstMark and pre-IPO investors Fidelity, Wellington and Goldman Sachs. In other private company news, the SEC indicated this week that it is likely to approve a rule change on the NYSE that will clear the path for music streaming service Spotify to conduct a direct listing.
Earnings: Stitch Fix reports in-line, but stock trades down
Online personal-styling service Stitch Fix (SFIX) reported 3Q17 earnings on Tuesday. Shares fell following the announcement that matched analyst expectations but have since rebounded to pre-earnings highs.
US IPO Pipeline Update: Apollo gears up for active 2018 with ADT
Two Apollo-backed companies submitted initial filings this week. Security services firm ADT (ADT) filed for an IPO that we estimate could raise $1.5 billion. PlayAGS (AGS), a supplier of electronic casino games, filed to raise $100 million.Three smaller deals also filed: high speed computing systems maker One Stop Systems (OSS, $23 million), eye therapy biopharma Eyenovia (EYEN, $35 million) and in-flight entertainment provider Aerkomm (AKOM, $40 million).
In addition to new filings, three REITs in the IPO pipeline filed updates ahead of likely 2018 IPOs: Workspace Property Trust (WSPT), Americold Realty Trust (COLD) and Industrial Logistics Properties Trust (ILPT). With oil prices on the rise, fracker Liberty Oilfield Services (BDFC) updated its financials.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 35.9% year-to-date, ahead of the S&P 500, which is up 19.8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snap (SNAP) and Invitation Homes (INVH). The Renaissance International IPO Index is up 30.0% year-to-date, while the ACWX is up 23.3%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Orsted (DONG Energy) and ASR Nederland.
