US IPO Week Ahead: Software, soft drinks, specialty insurance, and more debut in a 19 IPO week

Updated Monday, 7/19.

The IPO market’s breakneck pace is expected to continue in the week ahead, with a whopping 19 IPOs slated to raise $5.2 billion.

The largest deal of the week, specialty insurance brokerage Ryan Specialty Group (RYAN) plans to raise $1.3 billion at a $6.1 billion market cap. The company assists in the placement of hard-to-place risks for retail insurance brokers, and the sourcing, onboarding, underwriting, and servicing of those hard-to-place risks for insurance carriers. Profitable on an EBIT basis in the 1Q21, the company will be leveraged post-IPO.

Water infrastructure company Core & Main (CNM) plans to raise $750 million at a $5.2 billion market cap in a 100% synthetic secondary offering. Profitable with solid growth, the company distributes water infrastructure products that connect 4,500 suppliers to over 60,000 municipal, non-residential, and residential customers.

HR software provider Paycor HCM (PYCR) plans to raise $361 million at a $3.4 billion market cap. Paycor provides human capital management software to small and mid-sized businesses, covering the payroll process and key HR functionality. While net revenue retention fell in the FY20, the company is targeting a large addressable market and has a track record of profitability.

Latin American e-commerce platform VTEX (VTEX) plans to raise $304 million at a $3.2 billion market cap. VTEX operates a business-to-consumer e-commerce platform to enterprise customers that natively combines commerce, order management, and marketplace functionality. The company has demonstrated growth, though investments in SG&A and R&D have weighed on profits.

Learning management platform Instructure Holdings (INST) plans to raise $250 million at a $2.9 billion market cap. The company provides a next-generation Learning Management System (LMS), assessments for learning, actionable analytics, and dynamic content. Instructure states that it is the LMS market leader in both Higher Education and paid K-12, with over 6,000 global customers across 90 countries.

Cell analysis instruments provider Cytek BioSciences (CTKB) plans to raise $248 million at a $2.3 billion market cap. As of March 31, 2021, the company has placed over 750 instruments to over 620 companies around the world, including pharmaceutical companies, over 125 biopharma companies, academic research centers, and clinical research organizations.

Gene editing biotech Caribou Biosciences (CRBU) plans to raise $203 million at an $827 million market cap. Caribou's lead program, CB-010, is a CAR-T cell therapy with PD-1 removed from the cell surface. CB-010 is currently in a Phase 1 trial for the treatment of relapsed or refractory B cell non-Hodgkin lymphoma and is expected to report initial data in 2022.

Protein discovery and development platform AbSci (ABSI) plans to raise $200 million at a $1.6 billion market cap. AbSci currently has nine active programs across seven partners, which include Merck and Astellas, for which it has either negotiated or plans to negotiate license agreements. The company is highly unprofitable, and 90% of its tech development revenue came from a single partner in the 1Q21.

Organic beverage brand Zevia PBC (ZVIA) plans to raise $200 million at a $1.0 billion market cap. Zevia provides six product lines of zero calorie, zero sugar, naturally sweetened beverages in the US and Canada. The company has demonstrated growth and achieved profitability in the 1Q21.

Content marketing platform Outbrain (OB) plans to raise $200 million at a $1.5 billion market cap. Outbrain’s platform enables over 7,000 online properties, helping them engage their users and monetize their visits by gathering over 1 billion data events each minute. Profitable with strong growth, the company had over 20,000 advertisers using its platform in 2020.

Fitness franchisor Xponential Fitness (XPOF) plans to raise $200 million at a $711 million market cap. Xponential Fitness is the largest boutique fitness franchisor in the US with over 1,750 studios operating across nine distinct brands. While the company’s business was impacted by the pandemic in 2020, preliminary results for the 2Q21 show 60%+ revenue growth and adjusted EBITDA swinging positive.

Legal software provider CS Disco (LAW) plans to raise $193 million at a $1.6 billion market cap. Fast growing and unprofitable, DISCO provides a cloud-native, AI-powered legal solution that simplifies ediscovery, legal document review, and case management for enterprises, law firms, legal services providers, and governments.

Following its postponement in May, Brazil’s Zenvia (ZENV) plans to raise $162 million at a $548 million market cap. The company’s software platform facilitated the flow of communication for more than 10,190 customers throughout Latin America as of March 31, 2021. While it achieved a net revenue expansion rate of nearly 110%, Zenvia’s EBITDA turned negative in the 1Q21.

Couchbase (BASE) plans to raise $151 million at a $992 million market cap. Couchbase provides a NoSQL database that enables enterprises and developers to build and run applications across the cloud, on-premise, hybrid, or mobile and edge environments. The company has a sticky customer base that includes 30% of the Fortune 100, though it remains unprofitable due to high S&M costs.

Following its postponement in April, Kaltura (KLTR) plans to raise $150 million at a $1.4 billion market cap. Kaltura provides live, real-time, and on-demand video products to a wide range of businesses including educational institutions, and media and telecom companies. Thanks to the growing adoption of virtual events, the company saw revenue expand in the 1Q21, though gross margin contracted.

Gambling.com Group (GAMB) plans to raise $90 million at a $435 million market cap. Gambling.com Group is a performance marketing company and a digital marketing services provider active exclusively in the online gambling industry, with a principal focus on iGaming and sports betting. Profitable and fast growing, the company has increased its customer base from 131 in 2017 to over 200 in 2020.

Three biotechs are expected to round out the week: cancer biotech Candel Therapeutics (CADL), which plans to raise $85 million at a $398 million market cap; preclinical biotech Ocean Biomedical (OCEA), which plans to raise $50 million at a $506 million market cap; and cancer biotech Elicio Therapeutics (ELTX), which plans to raise $40 million at a $201 million market cap.

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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 7/15/21, the Renaissance IPO Index was down 5.4% year-to-date, while the S&P 500 was up 16.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Snowflake (SNOW) and Palantir Technologies (PLTR). The Renaissance International IPO Index was down 2.7% year-to-date, while the ACWX was up 8.8%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Smoore International and EQT Partners.