Five IPOs and three SPACs raised a combined $3.2 billion this past week led by Bill.com (BILL) in the best debut of the quarter with a 61% first day pop. Four companies submitted initial filings.
The week’s best performer, Bill.com (BILL) raised the range and priced above it to raise $216 million at a $1.7 billion market cap. High-growth and near profitability, investors wanted in on the back-office automation unicorn after a notable absence of US tech IPOs in the 4Q. Bill.com finished up 77%.
Another US tech IPO, social media management software Sprout Social (SPT) raised $150 million at the midpoint to command an $894 million market cap. The company has demonstrated decent growth and a sticky customer base, but it’s unprofitable and faces significant competition. Sprout finished down 2%.
The largest deal of the quarter, Brazilian brokerage XP (XP) priced well above the range to raise nearly $2.0 billion at a $14.9 billion market cap. With high growth and strong margins, XP piqued investor interest, and finished the week up 40%.
Chinese tech platform OneConnect Financial Technology (OCFT) raised $312 million at a $3.7 billion market cap, a nearly $4 billion haircut from its last private round. The company decreased both its range and proposed ADS offering earlier this week, then priced at the high end of the lowered range. The fast-growing, highly-unprofitable company finished flat.
Chinese issuer EHang Holdings (EH) priced at the low end to raise $40 million at a $687 million market cap. The company develops passenger-grade autonomous drones as the first mover in the “air taxi” space, though it is still early stage. EHang finished up 3%.
| 8 IPOs During the Week of December 9th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 12/13 |
| Bill.com (BILL) | $216M | $1,729M | 29% | +61% | +77% |
| Provides a SaaS platform that automates billing and back-office processes for SMBs. | |||||
| XP (XP) | $1,958M | $14,899M | 15% | +28% | +40% |
| Fast-growing digital brokerage and wealth manager in Brazil. | |||||
| EHang (EH) | $40M | $687M | -7% | +0% | +3% |
| Chinese developer of autonomous drones used for passenger services. | |||||
| Healthcare Merger Corp. (HCCOU) | $220M | $276M | 0% | +3% | +3% |
| Blank check company targeting the healthcare industry. | |||||
| CIIG Merger (CIICU) | $225M | $281M | 0% | +2% | +2% |
| Blank check company formed by industry veterans to acquire a technology, media, or telecom company. | |||||
| LIV Capital Acquisition (LIVKU) | $70M | $86M | 0% | +0% | +0% |
| Blank check company led by a team from LIV Capital targeting Mexico. | |||||
| OneConnect (OCFT) | $312M | $3,673M | -23% | +0% | +0% |
| Ping An-backed provider of operations management tools for financial firms. | |||||
| Sprout Social (SPT) | $150M | $894M | 0% | -2% | -2% |
| Provides a cloud-based platform for businesses to manage social media accounts. | |||||
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Four companies submitted initial filings this past week. Chinese WeWork rival Ucommune (UK) filed to raise $100 million, Chinese organic food distributor Loha (LOHA) filed to raise $38 million, skin disease biotech Processa Pharmaceuticals (PCSA) filed to raise $16 million, and software infrastructure provider Duos Technologies Group (DUOT) filed to raise $10 million.
| 4 Filings During the Week of December 9th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Processa Pharmaceuticals (PCSA) | $16M | Health Care | |
| Developing an analog therapy for necrotic skin disease. | |||
| Duos Technologies Group (DUOT) | $10M | Technology | ThinkEquity |
| Provides software infrastructure to a variety of industries. | |||
| Ucommune Group Holdings (UK) | $100M | Real Estate | Haitong |
| Leading provider of shared work space in China. | |||
| Loha (LOHA) | $38M | Consumer Staples | Maxim |
| Organic food distributor in China. | |||
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In other news, Renaissance Capital has published the final installment of “Hijacking the IPO Market.” For our concluding thoughts on the ongoing direct listing versus IPO debate, as well as our ideas on how to improve the traditional IPO process, click here.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 12/12/19, the Renaissance IPO Index was up 30.0% year-to-date, while the S&P 500 had a gain of 26.4%. 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 21.3% year-to-date, while the ACWX was up 18.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and SoftBank.
