A biotech and a micro-cap ridesharing rental provider entered the public market this past week, and seven companies submitted initial filings.
After delaying its offering in the previous week, 89bio (ETNB) priced its upsized $85 million IPO at the midpoint and popped 30% on its first day, the second highest of the 4Q19 so far, before finishing the week up 69%. The company’s target indication NASH represents a multi-billion-dollar market with no FDA-approved therapy, and 89bio’s FGF21 analog showed positive Phase 1 data in healthy volunteers. That said, it has yet to demonstrate proof-of-concept in NASH patients.
YayYo (YAYO), which operates a fleet management and auto rental platform for ridesharing drivers, raised $11 million to command a $118 million market cap. The company more than tripled sales in the 1H19 while EBITDA swung positive. However, the auto rental industry is highly competitive, and YayYo’s relatively small operations didn’t bolster investor confidence. The company finished down 10%.
| 2 IPOs During the Week of November 11th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 11/15 |
| 89bio (ETNB) | $85M | $225M | 0% | +30% | +69% |
| Phase 1 biotech developing therapies for NASH and other metabolic diseases. | |||||
| YayYo (YAYO) | $11M | $118M | -50% | -11% | -10% |
| Operates a fleet management and auto rental platform for ridesharing drivers. | |||||
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Reynolds Consumer Products (REYN), a leading provider of household and kitchen products, and Brazilian financial services provider XP (XP) both filed for estimated $1 billion IPOs. Ping An’s OneConnect Financial Technology (OCFT), which provides financial services software, filed for an estimated $500 million US IPO. All three could fetch valuations as high as $5 billion.
Chinese human resources software provider CDP Holdings (CDP) filed to raise $125 million, financial software unicorn Bill.com Holdings (BILL) filed to raise $100 million, coffee packager NuZee (NUZE) filed to raise $12 million, and Chinese e-commerce facilitator Oriental Culture Holding (DFWH) filed to raise $10 million.
| 7 Filings During the Week of November 11th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Bill.com (BILL) | $100M | Technology | Goldman |
| Provides payment processing software for small and midsize businesses. | |||
| CDP Holdings (CDP) | $125M | Technology | BofA |
| Provides software for human resources management in China. | |||
| Reynolds Consumer (REYN) | $1,000M | Consumer Staples | Credit Suisse |
| Leading provider of household and kitchen products. | |||
| XP (XP) | $100M | Financials | Goldman |
| Fast-growing retail brokerage in Brazil. | |||
| OneConnect (OCFT) | $500M | Technology | Morgan Stanley |
| Ping An-backed provider of operations management tools for financial firms. | |||
| NuZee (NUZE) | $12M | Consumer Staples | Benchmark |
| Packages and sells single-serve coffee products. | |||
| Oriental Culture Holding (DFWH) | $10M | Technology | ViewTrade |
| Operates an online marketplace for artists and collectors in China. | |||
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In other news, the Renaissance IPO Index had a gain of 3.7% this week compared to the S&P 500’s 0.9% gain. An illustration of the IPO market rebound, recent high-profile IPO Peloton Interactive (PTON) has started to make a comeback, gaining 16% this week after a strong earnings report and news of new products in development.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 11/14/19, the Renaissance IPO Index was up 28.6% year-to-date, while the S&P 500 had a gain of 23.5%. 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 17.0% year-to-date, while the ACWX was up 16.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
