Seven IPOs and five SPACs entered the public markets this week led by top performer Vital Farms (VITL), which popped 60% in its public debut.
Vital Farms (VITL), the largest US producer of pasture-raised eggs, upsized and priced above the upwardly revised range to raise $205 million at a $991 million market cap. The company, which is both a public benefit corporation and Certified B Corp, has demonstrated profitability and strong growth. However, operating margins have fluctuated with marketing activities.
In the largest US IPO from a Chinese issuer since 2018, electric SUV maker Li Auto (LI) priced above the range to raise $1.1 billion at a $10 billion market cap. The company offers the first EREV in China and has sold more than 10,000 units as of 6/30/20, though profitability is likely years away. Boosted by investor interest in the EV space, Li Auto finished up 39%.
Vertex (VERX), which provides tax software for businesses, priced well above the range to raise $402 million at a $3.0 billion market cap. The company has demonstrated growth at scale and has a track record of profitability, but it faces significant competition. Vertex finished up 24%.
Brazilian K-12 school curriculum solution provider Vasta Platform (VSTA) priced above the range to raise $353 million at a $1.6 billion market cap. While organic revenue growth has been flat recently, the company has strong retention and EBITDA margins. Vasta finished down 1%.
Phase 2 viral disease biotech AlloVir (ALVR) upsized to raise $276 million at a $1.1 billion market cap. The company's portfolio includes early-stage candidates that could protect vulnerable populations from influenza and COVID-19, but its COVID-19 Phase 1 trial was put on hold by the FDA due to safety concerns. AlloVir finished up 46%.
Cloud-based real estate brokerage Fathom Holdings (FTHM) further upsized its deal and priced above the range to raise $34 million at a $137 million market cap, but finished the week flat. Fast-growing and slightly unprofitable, the company believes its commission model can allow agents that join from traditional brokerages to increase their income by 25% on average.
1847 Goedeker (GOED), which operates a home appliance e-commerce platform, priced at the low end to raise $10 million at a $53 million market cap. Revenue declined in both 2019 and the 1Q20, and it is unprofitable, though gross margin improved in the MRQ. Goedeker's finished down 1%.
Michael Klein's fourth SPAC Churchill Capital Corp IV (CCIV.U) upsized its offering twice to raise $1.8 billion. The company plans to target businesses with competitive advantages, significant streams of recurring revenue, opportunity for operational improvement, attractive steady-state margins, high incremental margins, and attractive free cash flow characteristics.
Churchill Capital Corp IV was joined by four other SPACs. CC Capital and Neuberger Berman's second SPAC CC Neuberger Principal II (PRPB.U) raised $720 million, technology SPAC E.Merge Technology Acquisition (ETACU) raised $522 million, ACE Equity Partners' SPAC ACE Convergence Acquisition (ACEV.U) raised $200 million, and NewHold Enterprises' SPAC NewHold Investment (NHICU) raised $150 million.
| 12 IPOs During the Week of July 27th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 07/31 |
| Vital Farms (VITL) | $205M | $991M | 38% | +60% | +60% |
| Largest US producer of pasture-raised eggs and butter. | |||||
| AlloVir (ALVR) | $276M | $1,104M | 0% | +49% | +46% |
| Phase 2 biotech developing allogeneic T cell therapies for viral diseases. | |||||
| Li Auto (LI) | $1,093M | $10,045M | 28% | +43% | +39% |
| Manufactures smart electric SUVs in China. | |||||
| Vertex (VERX) | $402M | $2,948M | 27% | +26% | +24% |
| Provides comprehensive tax software for businesses. | |||||
| CC Neuberger Principal II (PRPB.U) | $720M | $920M | 0% | +1% | +1% |
| Second blank check company formed by CC Capital and Neuberger Berman. | |||||
| Fathom Holdings (FTHM) | $34M | $137M | 25% | +0% | +0% |
| Cloud-based full-service real estate brokerage. | |||||
| E.Merge Technology Acq (ETACU) | $522M | $659M | 0% | +0% | +0% |
| Blank check company led by the former CEOs of Kodak, EFI, and SAP Concur targeting a tech business. | |||||
| Churchill Capital Corp IV (CCIV.U) | $1,800M | $2,250M | 0% | +0% | +0% |
| Fourth blank check company founded by dealmaker and former Citi executive Michael Klein. | |||||
| ACE Convergence Acq. (ACEV.U) | $200M | $250M | 0% | n/a | +0% |
| Blank check company formed by ACE Equity Partners and industry veterans targeting a tech business. | |||||
| Vasta Platform (VSTA) | $353M | $1,577M | 15% | -1% | -1% |
| Brazilian provider of K-12 school curriculum solutions being spun out of Cogna. | |||||
| NewHold Investment (NHICU) | $150M | $188M | 0% | -1% | -1% |
| Blank check company formed by NewHold Enterprises targeting an industrial technology business. | |||||
| Goedeker's (GOED) | $10M | $53M | -40% | -1% | -1% |
| Operates an e-commerce platform for appliances and home goods. | |||||
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Four companies and 11 SPACs submitted initial filings. Nano-X Imaging (NNOX), which is developing affordable medical imaging systems as alternatives to classical X-rays, filed to raise $125 million. Commercial stage CNS disorder biotech Harmony Biosciences (HRMY), preclinical protein degrader biotech Kymera Therapeutics (KYTX.RC), and Phase 1 protein engineering oncology biotech Inhibrx (INBX) all filed to raise $100 million.
RedBird Capital's sport SPAC RedBall Acquisition (RBAC.U) filed to raise $500 million, tech SPAC Burgundy Technology Acquisition (BTAQU) filed to raise $400 million, energy SPAC Star Peak Energy (STPK.U) filed to raise $350 million, ESG SPAC Northern Genesis Acquisition (NGA.U) and Clifton Robbins' CSR Acquisition (CSRA.U) both filed to raise $300 million, David Boris and Marshall Kiev's third SPAC Forum Merger III (FIIIU) filed to raise $250 million, technology SPAC one (AONE.U) and real estate technology SPAC Lionheart Acquisition (LCAPU) both filed to raise $200 million, insurance SPAC INSU Acquisition II (INAQU) filed to raise $175 million, and cannabis SPAC Petra Acquisition (PAICU), biotech SPAC BCTG Acquisition (BCTG) both filed to raise $125 million.
| 15 Filings During the Week of July 27th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| BCTG Acquisition (BCTG) | $125M | SPAC | SVB Leerink |
| Blank check company formed by Boxer Capital targeting the biotech industry. | |||
| Burgundy Technology Acq. (BTAQU) | $400M | SPAC | Mizuho |
| Blank check company formed by the former CEO of HP and a former Citi executive targeting the tech industry. | |||
| CSR Acquisition (CSRA.U) | $300M | SPAC | Credit Suisse |
| Blank check company formed by ESG investing veteran Clifton Robbins. | |||
| Kymera Therapeutics (KYTX.RC) | $100M | Health Care | Morgan Stanley |
| Preclinical biotech developing small molecule protein degrader therapies for immunology-inflammation and oncology. | |||
| Nano-X Imaging (NNOX) | $125M | Health Care | Cantor Fitz. |
| Developing affordable medical imaging systems. | |||
| Star Peak Energy (STPK.U) | $350M | SPAC | Credit Suisse |
| Blank check company formed by Magnetar Capital and the co-founder of Triangle Peak Partners targeting the energy industry. | |||
| INSU Acquisition II (INAQU) | $175M | SPAC | Cantor Fitz. |
| Second blank check company formed by Cohen & Company and targeting the insurance industry. | |||
| one (AONE.U) | $200M | SPAC | Goldman |
| Blank check company led by the co-founder of Eventbrite and other industry veterans targeting the tech sector. | |||
| Forum Merger III (FIIIU) | $250M | SPAC | Jefferies |
| Third blank check company formed by SPAC veterans David Boris and Marshall Kiev. | |||
| Petra Acquisition (PAICU) | $125M | SPAC | LifeSci Capital |
| Blank check company targeting a cannabis business. | |||
| Inhibrx (INBX) | $100M | Health Care | Jefferies |
| Phase 1 biotech using protein engineering to develop targeted therapies for cancer and rare diseases. | |||
| RedBall Acquisition (RBAC.U) | $500M | SPAC | Goldman |
| Blank check company formed by RedBird Capital targeting the sports industry. | |||
| Harmony Biosciences (HRMY) | $100M | Health Care | Goldman |
| Commercial stage biotech developing therapies for narcolepsy and other CNS disorders. | |||
| Lionheart Acquisition II (LCAPU) | $200M | SPAC | Nomura |
| Blank check company formed by Lionheart Capital targeting a real estate technology company. | |||
| Northern Genesis Acq. (NGA.U) | $300M | SPAC | Raymond James |
| Blank check company targeting an environmentally sustainable business. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/30/20, the Renaissance IPO Index was up 39.9% year-to-date, while the S&P 500 was up 0.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Zoom Video (ZM) and Uber (UBER). The Renaissance International IPO Index was up 25.5% year-to-date, while the ACWX was down 5.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Xiaomi.
