In the first busy week since the August break, six companies and two SPACs entered the public market. VC-backed health and tech fared well, led by 10x Genomics (TXG) and Cloudflare (NET), while SmileDirectClub (SDC) saw its initial hype evaporate.
The largest deal of the week, SmileDirectClub (SDC) priced its $1.3 billion IPO above the range and promptly fell below issue; it’s the first company in three years to price above the range and trade down on its first day. SmileDirectClub came public at a premium to close peer Align Technologies, reflecting its large potential market opportunity and high growth (190% y/y), but its large losses and insider payouts left investors frowning. SmileDirectClub finished the week down 19%.
Cloudflare (NET) and 10x Genomics (TXG) both priced upsized IPOs above the upwardly revised range with billion-dollar valuations. Cloudflare raised $525 million to command a $4.8 billion market cap. The company came to market in line with closest peer Fastly (FSLY), which has traded up 82% since its May IPO. Cloudflare finished the week up 20%. 10x Genomics raised $390 million to command a $4.2 billion market cap. The company is growing fast (106% y/y) and has high recurring consumables revenue. 10x Genomics finished the week up 34%.
Migraine biotech Satsuma Pharmaceuticals (STSA) priced its $83 million deal at the $15 midpoint and finished the week up 13%. Rare disease biotech SpringWorks Therapeutics (SWTX) priced its IPO at the $18 high end to raise $162 million and finished the week up 26%. Regional bank Alerus Financial (ALRS) priced below the range to raise $60 million with its Nasdaq uplisting, finishing the week up 5%.
| 8 IPOs During the Week of September 9th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 09/13 |
| 10x Genomics (TXG) | $390M | $4,231M | 18% | +35% | +34% |
| Provides a single-cell sequencing platform for biomedical research. | |||||
| SpringWorks Therapeutics (SWTX) | $162M | $798M | 6% | +26% | +26% |
| Phase 3 biotech developing small molecule therapies for rare cancers. | |||||
| Cloudflare (NET) | $525M | $4,796M | 36% | +20% | +20% |
| Provides a cloud platform for website security and web content optimization. | |||||
| Satsuma Pharmaceuticals (STSA) | $83M | $270M | 0% | +13% | +13% |
| Developing a fast-acting dry powder nasal spray for migraines. | |||||
| Alerus Financial (ALRS) | $60M | $358M | -9% | +5% | +5% |
| Regional bank with a focus on retirement and benefit services. | |||||
| New Providence Acq. (NPAUU) | $200M | $250M | 0% | +0% | +0% |
| Blank check company led by former soda executives targeting the consumer sector. | |||||
| Experience Investment (EXPCU) | $250M | $313M | 0% | +0% | +0% |
| Blank check company led by a team from KSL Capital Partners and focused on the travel and leisure industry. | |||||
| SmileDirectClub (SDC) | $1,346M | $8,878M | 12% | -28% | -19% |
| Develops and sells at-home teeth straightening systems. | |||||
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Four companies filed for IPOs this week. Large German biotech BioNTech (BNTX) filed for an estimated $500 million US IPO. Illinois bank HBT Financial (HBT) and denim-focused apparel retailer Madewell (MDWL.RC) both filed to raise $100 million. Global Internet of People (GIP), an online peer-to-peer knowledge sharing platform in China, filed and set terms for a $20 million US IPO.
| 4 Filings During the Week of September 9th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Global Internet of People (GIP) | $20M | Technology | ViewTrade |
| Online peer-to-peer knowledge sharing and enterprise service platform in China. | |||
| HBT Financial (HBT) | $100M | Financials | KBW |
| Family-owned bank with 64 branches in central and northeastern Illinois. | |||
| Madewell (MDWL.RC) | $100M | Consumer Discretionary | --- |
| Denim-focused apparel brand backed by TPG and Leonard Green. | |||
| BioNTech (BNTX) | $500M | Health Care | JP Morgan |
| German biotech developing individualized immunotherapies for cancer. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 9/12/19, the Renaissance IPO Index was up 32.0% year-to-date, while the S&P 500 had a gain of 20.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Roku (ROKU). The Renaissance International IPO Index was up 11.9% year-to-date, while the ACWX was up 13.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
