The IPO market pumped the brakes in the shortened holiday week, with six IPOs raising $1.9 billion and just two SPACs raising $300 million. Pipeline activity slowed from previous weeks as well, with six IPOs and seven SPACs submitting initial filings.
Low-cost airline Frontier Group Holdings (ULCC) priced at the low end to raise $570 million at a $4.3 billion market cap. This ultra low-cost airline targets the leisure travel industry and serves a network of 110 airports. Despite having a young and relatively fuel-efficient fleet, the airline saw revenue fall 50% in 2020, and the pace of recovery is uncertain. Frontier finished down 1%.
Online education platform Coursera (COUR) priced at the high end to raise $519 million at a $5.3 billion market cap. Coursera provides online courses to over 77 million individuals and 6,000 enterprises by partnering with over 200 educational institutions. Boosted by quarantined consumers during the pandemic, the company saw a 59% increase in revenue, though it remains highly unprofitable. Coursera finished up 39%.
After slashing its deal size by 48%, online real estate brokerage platform Compass (COMP) priced at the low end of the downwardly revised range to raise $450 million at an $8.7 billion market cap. Compass provides a residential real estate brokerage platform to over 19,000 agents in over 20 states. The company had rapid growth in 2020 and has a near-term path to profitability. Compass finished up 12%.
Solid tumor biotech Achilles Therapeutics (ACHL) priced at the midpoint to raise $176 million at a $734 million market cap. This UK-based biopharmaceutical company is developing T cell therapies to treat solid tumors. Its lead candidate is currently in Phase 1/2a trials for advanced NSCLC and metastatic or recurrent melanoma, with interim data expected in the 2H22. Achilles Therapeutics finished down 11%.
China-based Smart Share Global (EM) priced below the range to raise $150 million at a $2.2 billion market cap. Smart Share provides a network of mobile device charging stations through a network of 664,000 locations across China. Profitable with strong growth, the company saw its free cash flow swing positive in 2020. Smart Share Global finished up 1%.
Telematics provider Karooooo (Cartrack) (KARO downsized by 74% and priced at $28 to raise $29 million at an $866 million market cap. The company provides a cloud-based transportation data analytics platform for customers to optimize their business and workforce. Cartrack is currently listed on the Johannesburg Stock Exchange under the ticker CTK. Karooooo finished up 21%.
Two blank check companies went public this past week. Disruptive technology SPAC Nocturne Acquisition (MBTCU) raised $100 million, and technology-focused SPAC two (TWOA) raised $200 million.
| 8 IPOs During the Week of March 29th, 2021 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 04/02 |
| Coursera (COUR) | $519M | $5,329M | 5% | +36% | +39% |
| Online education platform offering courses in a variety of subjects. | |||||
| Karooooo (KARO) | $29M | $866M | -41% | +21% | +21% |
| A provider of vehicle fleet management software primarily in South Africa. | |||||
| Compass (COMP) | $450M | $8,734M | -27% | +12% | +12% |
| Operates an online residential real estate brokerage platform. | |||||
| Nocturne Acquisition (MBTCU) | $100M | $129M | 0% | +0% | +1% |
| Blank check company targeting disruptive technology in blockchain and artificial intelligence. | |||||
| Smart Share Global (EM) | $150M | $2,196M | -26% | +0% | +0% |
| Provides a network of mobile device charging stations in China. | |||||
| two (TWOA) | $200M | $250M | 0% | -2% | -1% |
| Second blank check company led by the co-founder of Eventbrite and other industry veterans targeting the tech sector. | |||||
| Frontier Group Holdings (ULCC) | $570M | $4,281M | -5% | -1% | -1% |
| Ultra low-cost US airline carrier that serves approximately 110 airports. | |||||
| Achilles Therapeutics (ACHL) | $176M | $734M | 0% | -8% | -11% |
| Phase 1/2 biotech developing precision T cell therapies for solid tumors. | |||||
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Six IPOs submitted initial filings this past week. Swimming pool designer and manufacturer Latham Group (SWIM), medical device maker Treace Medical Concepts (TMCI), and home care service provider Aveanna Healthcare Holdings (AVAH) all filed to raise $100 million. Indian streaming and telecasting service provider Lytus Technologies (LYT) filed to raise $30 million. Bakery chain operator Chanson International (CHSN) and Phase 2 biotech Anebulo Pharmaceuticals (ANEB) both filed to raise $15 million.
Seven SPACs submitted initial filings led by Apollo’s Apollo Strategic Growth Capital III (APGC.U), which filed to raise $400 million, and Zimmer Partners’ SPAC Zimmer Energy Transition Acquisition (ZTU), which filed to raise $350 million.
| 13 Filings During the Week of March 29th, 2021 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Anebulo Pharmaceuticals (ANEB) | $15M | Health Care | Benchmark |
| Phase 2 biotech developing treatments for cannabinoid overdose and substance addiction. | |||
| Aveanna Healthcare (AVAH) | $100M | Health Care | Barclays |
| Provides pediatric and adult home care services. | |||
| Lytus Technologies (LYT) | $30M | Technology | Aegis Cap. |
| Indian provider of content streaming and telecasting services. | |||
| ZET Acquisition (ZTU) | $350M | SPAC | Citi |
| Blank check company formed by Zimmer Partners targeting the energy transition and sustainability space. | |||
| Chanson International (CHSN) | $15M | Consumer Staples | Univest Sec. |
| Operates a chain of bakeries located in China and New York City. | |||
| Latham Group (SWIM) | $100M | Consumer Discretionary | Barclays |
| Leading designer and manufacturer of in-ground residential swimming pools. | |||
| 5G Edge Acquisition (ARKEU) | $300M | SPAC | Cantor Fitz. |
| Blank check company targeting the TMT sector. | |||
| Catcha Investment 2.0 (CHAB.U) | $250M | SPAC | JP Morgan |
| Second blank check company formed by Catcha Group targeting "new economy" sectors in Asia Pacific. | |||
| Treace Medical Concepts (TMCI) | $100M | Health Care | JP Morgan |
| Makes a medical device system for the treatment of bunions. | |||
| Waverley Capital Acq. 1 (WAVCU) | $300M | SPAC | Evercore ISI |
| Blank check company formed by Waverley Capital targeting media, technology, and entertainment. | |||
| Apollo SGC III (APGC.U) | $400M | SPAC | Credit Suisse |
| Third blank check company formed by Apollo targeting growth businesses. | |||
| Learn CW Investment (LCW.U) | $250M | SPAC | Evercore ISI |
| Blank check company formed by Learn Capital and Commonwealth Asset Management targeting education. | |||
| Tribe Capital Growth II (BTVU) | $300M | SPAC | Cantor Fitz. |
| Blank check company formed by Tribe Capital targeting the tech sector. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 3/31/2021, the Renaissance IPO Index was down 3.4% year-to-date, while the S&P 500 was up 5.8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and Zoom Video Communications (ZM). The Renaissance International IPO Index was down 6.4% year-to-date, while the ACWX was up 4.0%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Kuaishou Technology and Nexi.
