Eight IPOs and nine SPACs entered the public markets this past week led by BigCommerce (BIGC), which soared 201% in the best first-day pop for an IPO over $100 million in 15 years.
E-commerce platform BigCommerce (BIGC) priced above the upwardly revised range to raise $216 million at a $1.8 billion market cap. With accelerating growth and high gross margins, the company benefited from investors’ appetite for high-quality tech and now trades nearly in line with close peer Shopify (SHOP), the best-performing IPO of the past decade. BigCommerce continued its ascent in the aftermarket, finishing the week up 229%.
On the flipside, Rackspace Technology (RXT) returned to the public markets in the worst drop of 2020, shedding 22% on its first day and finishing the week down 27%. The company priced at the low end to raise $704 million at a $4.4 billion market cap. While profitable, Rackspace is highly leveraged, and acquisitions have masked minimal growth.
Leading mortgage lender Rocket Companies (RKT) downsized and priced below the range to raise $1.8 billion at a $36 billion market cap. Originally planning to raise $3.2 billion, Rocket’s IPO was expected to be the largest of 2020, but now ranks third. The company operates in a highly cyclical industry, and it faced early valuation pushback from investors. Rocket finished up 38%.
Health center chain Oak Street Health (OSH) priced above the upwardly revised range to raise $328 million at a $5.0 billion market cap. Fast-growing and unprofitable, the company has demonstrated the ability to scale its business model with positive contribution margins and 90% patient satisfaction. Oak Street finished the week up 86%.
Gene therapy biotech Freeline Therapeutics (FRLN) upsized and priced at the high end to raise $159 million at a $658 million market cap. The company's lead candidate, FLT180a, an investigational gene therapy medicinal product candidate for the treatment of hemophilia B, is currently in a Phase 1/2 trial and has dosed 10 patients as of June 15, 2020. Freeline finished flat.
Medical device maker Acutus Medical (AFIB) upsized and priced at the high end to raise $159 million at a $548 million market cap. The company's AcQMap imaging and mapping system offers a new approach to mapping the drivers and maintainers of cardiac arrhythmias. In the 1Q20, there were 31 customer sites with AcQMap consoles and workstations, expected to increase to 38 in the 2Q. Acutus finished up 49%.
Solid tumor biotech Checkmate Pharmaceuticals (CMPI) priced at the midpoint to raise $75 million at a $335 million market cap. The company's sole candidate, CMP-001, has been studied in more than 200 melanoma patients to date. In its Phase 1b trial for advanced anti-PD-1 refractory melanoma, the company observed a best objective response rate of 28%. Checkmate finished down 7%.
In its second attempt to go public, customer support services provider IBEX (IBEX) priced at the midpoint to raise $90 million at a $358 million market cap. The company is expanding its client base into the “new economy” with customers like Amazon and Lyft. However, its revenue is still highly concentrated, and largest customer Frontier Communications recently filed for Chapter 11. IBEX finished down 19%.
Nine SPACs raised $2.6 billion, led by GO Acquisition (GOAC.U), which raised $500 million to acquire a business in the travel industry. SPAC deal count reached an all-time high this past week with five months to go.
| 17 IPOs During the Week of August 3rd, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 08/07 |
| BigCommerce (BIGC) | $216M | $1,816M | 26% | +201% | +229% |
| Provides a cloud-based platform for businesses to create online stores. | |||||
| Oak Street Health (OSH) | $328M | $5,012M | 31% | +90% | +86% |
| Operates primary care health facilities for Medicare patients in the Midwest. | |||||
| Acutus Medical (AFIB) | $159M | $548M | 6% | +47% | +49% |
| Manufactures devices for electrophysiological mapping to treat arrhythmias. | |||||
| Rocket Companies (RKT) | $1,800M | $36,006M | -14% | +20% | +38% |
| Leading mortgage lender operating under the Rocket and Quicken brands. | |||||
| Health Sciences Acq. 2 (HSAQ) | $139M | $175M | 0% | +14% | +19% |
| Second blank check company formed by RTW Investments to acquire a biopharma or medtech business. | |||||
| ARYA Sciences Acq. III (ARYA) | $130M | $166M | 0% | +4% | +4% |
| Third healthcare-focused blank check company formed by Perceptive Advisors. | |||||
| Gores Holdings V (GRSVU) | $475M | $575M | 0% | +1% | +2% |
| Fifth blank check company formed by The Gores Group. | |||||
| Yucaipa Acquisition (YAC.U) | $300M | $375M | 0% | +0% | +1% |
| Blank check company formed by private equity firm The Yucaipa Companies. | |||||
| BowX Acquisition (BOWXU) | $420M | $508M | 0% | +0% | +1% |
| Blank check company formed by Bow Capital Management to acquire a TMT business. | |||||
| Holicity (HOLUU) | $275M | $338M | 0% | +0% | +1% |
| Blank check company formed by Pendrell executives focused on acquiring a TMT business. | |||||
| Freeline Therapeutics (FRLN) | $159M | $658M | 6% | +0% | +0% |
| Phase 1/2 biotech developing gene therapies for hemophilia and rare diseases. | |||||
| Kismet Acquisition One (KSMTU) | $250M | $318M | 0% | +0% | +0% |
| Blank check company formed by the former CEO of MegaFon targeting a Russian business. | |||||
| GO Acquisition (GOAC.U) | $500M | $625M | 0% | +0% | +0% |
| Blank check company formed by the founders of GLG Partners and Certares targeting the travel industry. | |||||
| Vistas Media Acquisition (VMACU) | $100M | $128M | 0% | -1% | -1% |
| Blank check company targeting the media and entertainment industry. | |||||
| Checkmate Pharmaceuticals (CMPI) | $75M | $335M | 0% | -7% | -7% |
| Clinical stage immuno-oncology biotech developing therapies for solid tumors. | |||||
| IBEX (IBEX) | $90M | $358M | -10% | -19% | -19% |
| Provides outsourced customer support and marketing services. | |||||
| Rackspace (RXT) | $704M | $4,414M | -7% | -22% | -27% |
| Leading provider of cloud management services. | |||||
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Two IPOs and 11 SPACs submitted initial filings. REIT Broadstone Net Lease (BNL) and Chinese EV maker Xpeng (XPEV) both filed for IPOs estimated to raise $500 million. Bill Foley’s fourth SPAC Foley Trasimene Acquisition II (BFT.U) filed to raise $1.2 billion, The Bancorp’s SPAC FTAC Olympus Acquisition (FTOCU) filed to raise $750 million, and Cantor’s CF Finance Acquisition II (CFIIU) and True Wind Capital’s TWC Tech Holdings II (TWCTU) both filed to raise $525 million.
Eldridge Industries’ Horizon Acquisition (HZAC.U) filed to raise $500 million, consumer SPAC PMV Consumer Acquisition (PMVC.U) filed to raise $175 million, general SPAC Colonnade Acquisition (CLA.U) and &vest’s FAST Acquisition (FST.U) both filed to raise $200 million, and healthcare SPAC Alpha Healthcare Acquisition (AHACU) and HighCape Capital’s HighCape Capital Acquisition (CAPAU) both filed to raise $100 million. Technology SPAC Industrial Tech Acquisitions (ITACU) filed to raise $60 million.
| 13 Filings During the Week of August 3rd, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| CF Finance Acquisition II (CFIIU) | $525M | SPAC | Cantor Fitz. |
| Second blank check company formed by Cantor Fitzgerald. | |||
| FTAC Olympus Acquisition (FTOCU) | $750M | SPAC | Citi |
| Fourth blank check company formed by management of The Bancorp to acquire a fintech business | |||
| Industrial Tech Acq. (ITACU) | $60M | SPAC | Maxim |
| Blank check company targeting a technology business operating in an industrial or energy area. | |||
| Xpeng (XPEV) | $500M | Consumer Discretionary | Credit Suisse |
| Electric car manufacturer in China. | |||
| PMV Consumer Acq. (PMVC.U) | $175M | SPAC | UBS |
| Blank check company formed by the Gabelli Group targeting the consumer industry. | |||
| Broadstone Net Lease (BNL) | $500M | Real Estate | JP Morgan |
| Single-tenant commercial net lease REIT with 633 properties in the US and Canada. | |||
| Alpha Healthcare Acq. (AHACU) | $100M | SPAC | Mizuho |
| Blank check company targeting a healthcare business in the US. | |||
| Colonnade Acquisition (CLA.U) | $200M | SPAC | BTIG |
| Blank check company targeting the energy, real estate, and agricultural industries. | |||
| FAST Acquisition (FST.U) | $200M | SPAC | Citi |
| Blank check company formed by &vest and entrepreneur Sandy Beall targeting a restaurant or hospitality business. | |||
| TWC Tech Holdings II (TWCTU) | $525M | SPAC | Citi |
| Second blank check company formed by True Wind Capital targeting the tech industry. | |||
| Foley Trasimene Acq. II (BFT.U) | $1,200M | SPAC | Credit Suisse |
| Fourth blank check company formed by financial services veteran Bill Foley. | |||
| HighCape Capital Acq. (CAPAU) | $100M | SPAC | Cantor Fitz. |
| Blank check company formed by HighCape Capital targeting the life sciences industry. | |||
| Horizon Acquisition (HZAC.U) | $500M | SPAC | Credit Suisse |
| Blank check company formed by Eldridge Industries targeting the financial services industry. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 8/6/20, the Renaissance IPO Index was up 49.1% year-to-date, while the S&P 500 was up 3.7%. 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 30.8% year-to-date, while the ACWX was down 4.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.
