In the busiest week yet for the 2020 IPO market, 15 IPOs raised $8.7 billion. Snowflake (SNOW) took the spotlight, completing the largest software IPO ever and bagging the biggest billion-dollar pop in two decades. Eight SPACs joined the week’s diverse group of IPOs.
The year’s largest IPO to date, Snowflake (SNOW) priced above the upwardly revised range to raise $3.4 billion at a $42.3 billion market cap. The company has a large customer base and has delivered explosive growth, and it should benefit from the ongoing shift to the cloud, though its large losses are unlikely to meaningfully improve near term. Snowflake soared 112% on its first day of trading, the best first-day pop for billion-dollar IPO since 2000. Backpedaling in the aftermarket, it finished the week up 100%.
Game development platform Unity Software (U) went public via modified Dutch auction, pricing above the upwardly revised range to raise $1.3 billion at a $16.2 billion market cap. The company powers over half of the top 1,000 games in Apple’s and Google’s app stores, and it has attracted a sticky customer base, fueled recently by strong user engagement during the pandemic. The company has accumulated large losses due to high R&D spend, in which it plans to continue investing. Unity finished up 31%.
American Well (AMWL), which provides a telehealth platform for insurers and patients, upsized and priced above the range to raise $742 million at a $4.5 billion market cap. The company is targeting a large market opportunity, and demand for telehealth services has grown due to COVID-19. The company has generated large losses to date. Amwell finished up 28%.
Rank Group spinoff Pactiv Evergreen (PTVE) priced below the range to raise $574 million at a $2.5 billion market cap. The company has a #1, #2, or #3 market share for 80% of its products and has produced strong cash flow. However, volume has been weak in most divisions since 2018, and it operates in a largely underperforming sector. Pactiv finished down 15%.
Commercial REIT Broadstone Net Lease (BNL) priced at the low end to raise $570 million at a $2.7 billion market cap. The REIT’s portfolio consists of 633 properties across the US and Canada, though only 16% of its annualized base rent came from investment grade tenants as of 6/30/20. Broadstone plans to offer a 5.9% yield based on the offer price. Broadstone finished down 1%.
JFrog (FROG), which sells software tools that streamline app development, priced above the upwardly revised range to raise $509 million at a $4.5 billion market cap. While COVID-19 has impacted ARR growth and retention, the company has demonstrated strong revenue growth, as well as profitability on an EBITDA basis. JFrog finished up 47%.
Cloud management software provider Sumo Logic (SUMO) priced above the range to raise $326 million at a $2.7 billion market cap. Unprofitable with strong growth, the company has achieved 120%+ dollar-based net retention over the last ten quarters, though COVID-19 has increased customer churn. Sumo finished up 14%.
Global private markets investment firm StepStone Group (STEP) priced above the range to raise $315 million at a $1.8 billion market cap. The company oversaw $292 billion of private markets allocations as of 6/30/20. However, revenue swung negative in the 1H20 as its operations were hit hard by the pandemic. StepStone finished up 39%.
Hemodialysis device maker Outset Medical (OM) upsized and priced above the range to raise $242 million at a $1.2 billion market cap. The company is fast-growing and highly unprofitable (-44% gross margin in the 1H20), and its device’s recent FDA approval for home use dramatically increases opportunity. Bolstered by strong performances from recent medical device IPOs, Outset finished up 122%.
Rare disease biotech Dyne Therapeutics (DYN) upsized and priced above the range to raise $233 million at a $913 million market cap. The company is developing oligonucleotide therapies for rare genetic muscle diseases. It is very early stage, with trials expected to begin in 2022 at the earliest. Dyne finished up 19%.
Alzheimer’s biotech Athira Pharma (ATHA) upsized and priced at the high end to raise $204 million at a $544 million market cap. The company’s lead candidate targets the novel hepatocyte growth factor pathway and was well tolerated in a small Phase 1 trial. The company plans to begin a potentially pivotal Phase 2/3 trial by the end of the year. Athira finished up 1%.
British biotech COMPASS Pathways (CMPS) upsized and priced above the range to raise $128 million at a $658 million market cap. The company is using its proprietary formulation of psilocybin, a serotonergic hallucinogen and is an active ingredient in some species of mushrooms, as a combination therapy for treatment-resistant depression. Candidate COMP360 is currently in a Phase 2b trial, with data expected in late 2021. COMPASS finished up 71%.
After pushing pricing back by a day, Vitru (VTRU) priced at the low end of the downwardly revised range to raise $96 million at a $374 million market cap. The company is Brazil’s leading postsecondary digital education provider. While the company expects to benefit from the ongoing shift to distance learning, revenue growth decelerated in the 1H20. Vitru finished flat.
NASH biotech Metacrine (MTCR) priced at the midpoint to raise $85 million at a $364 million market cap. The company's lead candidate demonstrated improvements in certain NASH biomarkers in a Phase 1b monotherapy trial. The company plans to initiate a Phase 2a combination trial in the 1H21, with topline data expected in the 1H22. Metacrine finished down 22%.
Micro-cap BioVie (BIVI) raised $16 million at a $68 million market cap. The company priced below the last close of its shares on the OTCQB (BIVI). BioVie’s lead candidate is being developed to treat cirrhosis-related complications and is currently in a Phase 2 trial. The company finished flat.
Eight SPACs raised $2.2 billion this past week, led by Reinvent Technology Partners' (RTP.U) $600 million deal. The company was formed by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus and plans to target the tech sector.
| 23 IPOs During the Week of September 14th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 09/18 |
| Outset Medical (OM) | $242M | $1,217M | 17% | +125% | +122% |
| Provides a hemodialysis system for kidney diseases. | |||||
| Snowflake (SNOW) | $3,360M | $42,321M | 50% | +112% | +100% |
| Provides a cloud-based data warehousing platform. | |||||
| COMPASS Pathways (CMPS) | $128M | $658M | 13% | +71% | +71% |
| British Phase 2 biotech developing a psilocybin-based therapy for depression. | |||||
| JFrog (FROG) | $509M | $4,475M | 26% | +47% | +47% |
| Sells software tools that streamline app development. | |||||
| StepStone Group (STEP) | $315M | $1,752M | 13% | +39% | +39% |
| Global private markets investment firm. | |||||
| Unity Software (U) | $1,300M | $16,171M | 37% | +31% | +31% |
| Provides a real-time 3D video game development platform. | |||||
| Amwell (AMWL) | $742M | $4,494M | 20% | +28% | +28% |
| Provides a telehealth platform for insurers and patients. | |||||
| Dyne Therapeutics (DYN) | $233M | $913M | 12% | +26% | +19% |
| Preclinical biotech developing oligonucleotide therapies for rare muscular diseases. | |||||
| Sumo Logic (SUMO) | $326M | $2,723M | 16% | +22% | +14% |
| Provides on-demand cloud log management solutions to enterprises. | |||||
| Reinvent Tech Partners (RTP.U) | $600M | $750M | 0% | +11% | +11% |
| Blank check company formed by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus targeting the tech sector. | |||||
| Oaktree Acquisition II (OACB.U) | $225M | $281M | 0% | +4% | +4% |
| Second blank check company led by the head of Oaktree Capital's Value Equities group. | |||||
| Equity Distribution Acq. (EQD.U) | $360M | $435M | 0% | +3% | +3% |
| Blank check company formed by Sam Zell's Equity Group Investments to acquire an industrials business. | |||||
| ACON S2 Acquisition (STWOU) | $250M | $313M | 0% | +1% | +1% |
| Blank check company formed by ACON Investments targeting a sustainable business. | |||||
| Executive Network (ENPC.U) | $360M | $383M | 0% | +1% | +1% |
| Blank check company formed by Paul Ryan, Solamere Capital, and Vivint Solar co-founder Alex Dunn. | |||||
| Athira Pharma (ATHA) | $204M | $544M | 6% | +1% | +1% |
| Phase 2/3 biotech targeting the novel HGF/MET pathway for Alzheimer's. | |||||
| Sandbridge Acquisition (SBG.U) | $200M | $250M | 0% | +1% | +1% |
| Blank check company formed by Sandbridge Capital targeting a consumer business. | |||||
| Software Acquisition II (SAIIU) | $150M | $188M | 0% | +0% | +1% |
| Second blank check company led by former Ooyala officers targeting a software company. | |||||
| Alpha Healthcare Acq. (AHACU) | $100M | $129M | 0% | +0% | +0% |
| Blank check company targeting a healthcare business in the US. | |||||
| Vitru (VTRU) | $96M | $374M | -30% | +0% | +0% |
| Provides online and tutored post-secondary education services in Brazil. | |||||
| BioVie (BIVI) | $16M | $68M | -16% | +0% | +0% |
| Phase 2 biotech developing therapies for cirrhosis. | |||||
| Broadstone Net Lease (BNL) | $570M | $2,660M | -6% | -4% | -1% |
| Single-tenant commercial net lease REIT with 633 properties in the US and Canada. | |||||
| Pactiv Evergreen (PTVE) | $574M | $2,459M | -28% | -22% | -15% |
| Largest manufacturer of fresh food and beverage packaging in North America. | |||||
| Metacrine (MTCR) | $85M | $364M | 0% | -10% | -22% |
| Phase 1 biotech developing FXR agonist therapies for NASH. | |||||
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Seven IPOs and 18 SPACs submitted initial filings. Oncology biotechs Kronos Bio (KRON) and Shattuck Labs (STTK) both filed to raise $100 million. Rare disease biotech Spruce Biosciences (SPRB) filed to raise $86 million. Aziyo Biologics (AZYO), which makes regenerative medical products for various tissue types, filed to raise $58 million. Chinese issuers Wunong Net Technology (WNW) and Huadi International Group (HUDI) both filed to raised $25 million. Ammunition manufacturer AMMO (POWW) filed for a $15 million Nasdaq uplisting.
Apollo Global Management’s SPAC Apollo Strategic Growth Capital (APSG.U) filed to raise $750 million. Europe-focused SPAC Avanti Acquisition (AVAN.U), Fertitta and Handler’s third SPAC Landcadia Holdings III (LCYU), Patient Square Capital’s healthcare SPAC Montes Archimedes Acquisition (MAACU), and Vy Capital’s tech SPAC Vy Global Growth (VYGG.U) all filed to raise $500 million. Social Capital and Hedosophia’s three joint ventures Social Capital Hedosophia Holdings IV (IPOD.U), Social Capital Hedosophia Holdings V (IPOE.U), and Social Capital Hedosophia Holdings VI (IPOF.) filed to raise $350 million, $650 million, and $1 billion, respectively.
ESG SPAC AEA-Bridges Impact Corp. (IMPX.U) and Virgin Group’s SPAC VG Acquisition Corp. (VGAC.U) both filed to raise $400 million. Sports and entertainment SPAC Sports Entertainment Acquisition (SEAH.U) and SPAC NextGen Acquisition (NGACU) both filed to raise $350 million. FirstMark Capital’s SPAC FirstMark Horizon Acquisition (FMAC.U) filed to raise $300 million. MC Credit Partners’ SPAC Atlantic Street Acquisition (ASAQ.U) and MidOcean Partners’ SPAC Empower (EMPW.U) both filed to raise $250 million. ION Asset Management’s Israel-focused SPAC ION Acquisition 1 (IACA.U) filed to raise $200 million, healthcare SPAC Edoc Acquisition Corp. (ADOCU) filed to raise $100 million, and Asia-focused tech SPAC Distoken Acquisition (DISTU) filed to raise $40 million.
| 25 Filings During the Week of September 14th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Empower (EMPW.U) | $250M | SPAC | JP Morgan Cazenove |
| Blank check company formed by MidOcean Partners targeting U.S. consumer-facing businesses. | |||
| FirstMark Horizon (FMAC.U) | $300M | SPAC | Credit Suisse |
| Blank check company formed by FirstMark Capital targeting a US-based tech business. | |||
| Huadi International (HUDI) | $25M | Materials | Craft Capital Management |
| Manufactures steel pipe and tube products in China. | |||
| Kronos Bio (KRON) | $100M | Health Care | Goldman |
| Phase 2 biotech developing kinase inhibitor therapies for leukemia and solid tumors. | |||
| NextGen Acquisition (NGACU) | $350M | SPAC | Goldman |
| Blank check company targeting the industrial and healthcare sectors. | |||
| Shattuck Labs (STTK) | $100M | Health Care | Citi |
| Phase 1 biotech developing dual-sided fusion protein therapies for cancer. | |||
| Social Capital V (IPOE.U) | $650M | SPAC | Credit Suisse |
| Fifth blank check company formed by Social Capital and Hedosophia targeting a tech business. | |||
| Social Capital VI (IPOF.U) | $1,000M | SPAC | Credit Suisse |
| Sixth blank check company formed by Social Capital and Hedosophia targeting a tech business. | |||
| Social Hedosophia IV (IPOD.U) | $350M | SPAC | Credit Suisse |
| Fourth blank check company formed by Social Capital and Hedosophia targeting a tech business. | |||
| Spruce Biosciences (SPRB) | $86M | Health Care | Cowen |
| Phase 2 biotech developing novel therapies for rare endocrine disorders. | |||
| Landcadia Holdings III (LCYU) | $500M | SPAC | Jefferies |
| Third blank check company formed by the CEOs of Landry's and Jefferies to acquire an entertainment business. | |||
| Wunong Net Technology (WNW) | $25M | Technology | Boustead Securities |
| Operates an online food retail store and franchise restaurants in China. | |||
| Apollo Strategic Growth (APSG.U) | $750M | SPAC | Citi |
| Blank check company formed by Apollo targeting growth-oriented businesses. | |||
| Avanti Acquisition (AVAN.U) | $500M | SPAC | Citi |
| Blank check company formed by NNS Group and Sienna Capital targeting a European business. | |||
| VG Acquisition Corp. (VGAC.U) | $400M | SPAC | Credit Suisse |
| Blank check company formed by Virgin Group targeting consumer-facing businesses in the US and Western Europe. | |||
| AMMO (POWW) | $15M | Consumer Discretionary | Joseph Gunnar |
| Manufactures ammunition products for the sporting and other industries. | |||
| Distoken Acquisition (DISTU) | $40M | SPAC | EarlyBird |
| Blank check company targeting the tech sector in Asia. | |||
| Edoc Acquisition (ADOCU) | $100M | SPAC | I-Bankers |
| Blank check company targeting the healthcare industries in North America and Asia-Pacific. | |||
| ION Acquisition 1 (IACA.U) | $200M | SPAC | Cowen |
| Blank check company formed by ION Asset Management to acquire an Israeli business. | |||
| Montes Archimedes Acq. (MAACU) | $500M | SPAC | Citi |
| Blank check company formed by Patient Square Capital targeting the healthcare industry. | |||
| Vy Global Growth (VYGG.U) | $500M | SPAC | Morgan Stanley |
| Blank check company formed by Vy Capital targeting the technology sector. | |||
| AEA-Bridges Impact Corp. (IMPX.U) | $400M | SPAC | Credit Suisse |
| Blank check company formed by AEA and Bridges targeting businesses with a strong impact and ESG profile. | |||
| Atlantic Street Acq. (ASAQ.U) | $250M | SPAC | Cowen |
| Blank check company formed by MC Credit Partners targeting the business and consumer-related sectors. | |||
| Aziyo Biologics (AZYO) | $58M | Health Care | Piper Sandler |
| Makes regenerative medical products for various tissue types. | |||
| Sports Entertainment Acq. (SEAH.U) | $350M | SPAC | Goldman |
| Blank check company formed by former NFL and NHL executives targeting the sports and entertainment sectors. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 9/17/20, the Renaissance IPO Index was up 59.2% year-to-date, while the S&P 500 was up 3.9%. 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 35.5% year-to-date, while the ACWX was down 2.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Xiaomi and Meituan-Dianping.
