A wave of 6 IPOs and 5 SPACs submitted initial filings over the past week, despite the stock market having its worst week since 2008.
Most filed on Friday, meaning they will be able to launch as soon as Monday, March 16, and schedule IPOs for the last week of March. During periods of high volatility, companies often need to price at a steep discount. These latest filers are either willing to take a price cut, are optimistic about the market, or are optimistic about how the market will react to them. One filer is highly profitable on EBITDA, one is aiming for a $4 billion valuation, and four others operate in the coronavirus-resistant healthcare sector.
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ZoomInfo (ZI) filed on Thursday 2/27 to raise $500 million on the Nasdaq. The sales and marketing data platform grew sales by 40% in 2019 to $303 million with a 57% adjusted EBITDA margin. The Carlyle-backed company was formed in 2019 after DiscoverOrg acquired Zoom Information for $760 million.
Procore Technologies (PCOR) filed to go public on the NYSE and raise an estimated $400 million. The construction management software company grew sales by a whopping 55% to $290 million in 2019, though adjusted EBITDA was negative. Procore was last valued at $3 billion, and last year was rumored to seek a $4 billion valuation.
Healthcare benefits management software platform Accolade (ACCD) filed to raise $100 million. Backed by a16z, Accolade is unprofitable (-33% adj. EBITDA), though recent health benefits IPO Progyny (PGNY) has outperformed since its offering.
ORIC Pharmaceuticals (ORIC), a Phase 1 oncology biotech, filed to raise $86 million. The San Francisco-based company’s lead product candidate, ORIC-101, is a small molecule therapy designed to make prostate cancer therapies more effective. Interim data from ORIC-101’s Phase 1b trial is expected by the 1H21.
Pulmonary medical device maker Pulmonx (LUNG) also filed to raise $86 million. Backed by Boston Scientific, the company received pre-market approval for its severe emphysema treatment device, the Zyphyr Valve, in 2018. As a result of commercialization, 2019 sales grew 63% to $33 million (-55% EBITDA margin).
NLS Pharamceutics (NLSP), a biotech developing therapies for CNS and sleep disorders, filed to raise $40 million. The Swiss company is led by biotech industry veterans. Biotechs have done well recently, and another biotech targeting CNS disorders, Passage Bio (PASG), has traded up since its IPO last week.
A SPAC holds virtually no risk until completing its initial business combination, with investors able to redeem units ahead of a proposed acquisition. This structure buffers them from broader market trends, as SPACs continued to trade at roughly $10 even as the market sold off last week. Tech-focused Social Capital Hedosophia II (IPOB.U) and Social Capital Hedosophia III (IPOC.U) filed to raise $300 million and $600 million, respectively, as Social Capital’s Chamath Palihapitiya (CEO and Chairman) seeks to replicate his success with Virgin Galactic (SPCE). GigCapital3 (GIK.U), the third SPAC led by TMT veteran Avi Katz, filed to raise $200 million. Led by the former CEO of Canopy Growth, Collective Growth Corp (CGROU) filed to raise $150 million targeting the cannabis industry. Formed the former CEOs of Nuveen and FBR, Live Oak Acquisition (LOAK.U) filed to raise $200 million.
