The August lull has set in and we’re in the thick of it, with just two pricings this week and one postponement. The IPO pipeline is starting to fill up, with seven companies submitting initial filings led by The We Company (WE), a signal that the summer slowdown is coming to an end.
Chinese online lending platform 9F (JFU) raised $85 million with its US IPO to command a fully diluted market value of $2.1 billion. Despite being faced with weak peer trading and China’s challenging regulatory environment, the company went public at a premium to its US-listed peers, reflecting its above-average margins and low delinquency rate. 9F finished the week up 5%.
Kansas bank CrossFirst Bankshares (CFB) priced its $102 million IPO at $14.50, below the range. Under an experienced management team, the company improved its efficiency ratio in the 1H19 and expanded its ROE by nearly 7 points. However, its public debut comes at a time of poor trading among its peers. CrossFirst Bankshares finished the week up 1%.
Micro-cap biotech BioVie (BIVI) postponed its $15 million Nasdaq uplisting on Monday. The company currently trades on the OTC (BIVI).
| 2 IPOs During the Week of August 12th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 08/16 |
| 9F (JFU) | $85M | $2,125M | 12% | +1% | +5% |
| Online consumer lending platform in China. | |||||
| CrossFirst Bankshares (CFB) | $102M | $758M | -9% | +1% | +1% |
| Kansas bank with seven full-service locations across four states. | |||||
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Seven companies and one SPAC submitted initial filings this week. WeWork’s parent The We Company (WE), valued at $47 billion in its latest private round led by SoftBank, filed to raise $1 billion. The company demonstrated 106% year-over-year growth and booked $2.6 billion in LTM revenue, but it’s going public with the second largest loss of any IPO, ever, with a $1.7 billion trailing adjusted EBITDA loss.
Cloudflare (NET), which provides a cloud platform for website security and web content optimization, and alternative orthodontics provider SmileDirectClub (SDC) both filed for $100 million IPOs. Three biotechs submitted initial filings. Oncology biotech Monopar Therapeutics (MNPR) filed to raise $40 million; Satsuma Pharmaceuticals (STSA), which is developing a therapy for migraines, filed to raise $86 million; and rare disease biotech SpringWorks Therapeutics (SWTX) filed to raise $115 million.
Financial services provider Alerus Financial (ALRS) filed for a $75 million Nasdaq uplisting, while blank check company Apex Technology Acquisition (APTX.U) filed to raise $275 million to acquire a software or internet technology business.
| 8 Filings During the Week of August 12th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Alerus Financial (ALRS) | $75M | Financials | Raymond James |
| Diversified financial services provider with locations in five states. | |||
| Satsuma Pharmaceuticals (STSA) | $86M | Health Care | Credit Suisse |
| Clinical-stage biotech developing a therapy for migraines. | |||
| SmileDirectClub (SDC) | $100M | Health Care | JP Morgan |
| Develops and sells at-home teeth straightening systems. | |||
| SpringWorks Therapeutics (SWTX) | $115M | Health Care | JP Morgan |
| Clinical-stage biotech developing small molecule therapies for rare cancers. | |||
| Apex Technology Acq. (APTX.U) | $275M | SPAC | Cantor Fitz. |
| Blank check company targeting a software or internet technology business. | |||
| Cloudflare (NET) | $100M | Technology | Goldman |
| Provides a cloud platform for website security and web content optimization. | |||
| Monopar Therapeutics (MNPR) | $40M | Health Care | JonesTrading |
| Phase 3 biotech developing therapies for various types of cancer. | |||
| The We Company (WE) | $1,000M | Real Estate | JP Morgan |
| Outfits and leases shared office space utilizing a spaces-as-a-service model. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 8/15/19, the Renaissance IPO Index was up 29.5% year-to-date, while the S&P 500 had a gain of 13.6%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Elanco (ELAN). The Renaissance International IPO Index was up 6.4% year-to-date, while the ACWX was up 5.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and Meituan-Dianping.
