Summer may be over, but the IPO market is just heating up as 14 IPOs are slated to raise $5.3 billion in the week ahead. The diverse group includes software, consumer products, payment technology, and more.
The largest deal of the week, Freshworks (FRSH) plans to raise $855 million at a $9.6 billion market cap. The company’s core product is its customer support software, and it also offers IT service management software and a nascent competitor to CRM solutions. While losses are expected to increase with S&M spending, Freshworks has delivered solid growth and 100%+ net dollar-based revenue retention as of 6/30/21.
Canadian consumer products company Knowlton Development (KDC) plans to raise $800 million at a $3.1 billion market cap. Over the past three years, Knowlton has been responsible for co-developing 9,000+ products across a variety of categories, and its products are sold by its brand partners in 70+ countries. Despite using offering proceeds to pay down debt, Knowlton will be leveraged post-IPO.
Restaurant payment processor Toast (TOST) plans to raise $685 million at a $17.9 billion market cap. Toast provides a suite of integrated payment and software solutions that are designed to streamline restaurant operations. The company grew ARR over 100% in the 1H21, though it has historically been unprofitable, and growth could slow as tailwinds from restaurants reopening abate.
Global money transfer firm Remitly Global (RELY) plans to raise $487 million at a $7.5 billion market cap. Remitly provides digital financial services for immigrants and their families in over 135 countries, and it has expanded its core cross-border remittance product to over 1,700 corridors worldwide. The company has demonstrated growth and margin improvement, though it remains unprofitable.
Software firm Clearwater Analytics (CWAN) plans to raise $450 million at a $3.7 billion market cap. Clearwater provides its 1,000+ clients with cloud-native software that allows them to simplify their investment accounting operations, and the company has a 100% recurring revenue model. A new investor and certain existing shareholders intend to purchase $150 million worth of shares in the IPO.
Food company Sovos Brands (SOVO) plans to raise $350 million at a $1.5 billion market cap. Formed by Advent International, Sovos Brands offers a select group of acquired premium food brands. According to the company, its largest brand of products, Rao's, included the #1 selling SKU in the pasta and pizza sauce category. Profitable with solid growth, Sovos will be leveraged post-IPO.
Customer engagement software provider EngageSmart (ESMT) plans to raise $349 million at a $4.1 billion market cap. The company provides software that simplifies online workflows like paperless billing, electronic payment processing, scheduling, and client communication. While growth may slow post-pandemic, EngageSmart has a sticky customer based and a long track record of profitability.
Hiring solutions provider Sterling Check (STER) plans to raise $300 million at a $2.1 billion market cap. Sterling is one of the leading US providers of background checks for corporate and government customers. The company serves more than 50% of the Fortune 100, often with exclusive contracts, though it operates in a highly competitive market.
Jewelry retailer Brilliant Earth Group (BRLT) plans to raise $250 million at a $1.4 billion. Brilliant Earth is a digital-first jewelry company and a global leader in ethically sourced fine jewelry. The company has sold to consumers in all US states and over 50 countries, and has served over 370,000 customers through its e-commerce platform and 13 showrooms.
Online fashion platform a.k.a. Brands (AKA) plans to raise $250 million at a $2.3 billion market cap. a.k.a. acquires digitally-focused fashion brands oriented toward millennial and Gen Z consumers, starting with its acquisition of Princess Polly in 2018. The company has successfully expanded Princess Polly and has a long runway to grow its brands in the US, but its M&A strategy carries execution risk.
COVID-19 test maker Cue Health (HLTH) plans to raise $200 million at a $2.4 billion market cap. Cue’s first commercially available diagnostic test for use with its Cue Health Monitoring System is its COVID-19 Test Kit, which has been authorized by two EUAs. Cue has five additional Test Kits in late-stage technical development, for which it expects to begin seeking FDA authorization or clearance in the 2H22.
London-listed crypto mining company Argo Blockchain (ARBK) plans to raise $138 million at an $855 million market cap. Argo states that it is a leading blockchain technology company focused on large-scale mining of Bitcoin and other cryptocurrencies. Argo has a fleet of more than 21,000 purpose-built computers (mining machines) and can generate more than 1,075 petahash per second.
Personalized supplements seller Thorne Healthtech (THRN) plans to raise $126 million at an $892 million market cap. The company’s vertically integrated brands, Thorne and Onegevity, provide actionable insights and personalized data, products, and services. Profitable with strong growth, Thorne has a base of more than 3 million customers.
Canadian bank VersaBank (VBNK) plans to raise $50 million at a $269 million market cap. VersaBank is a Canadian Schedule I chartered bank and states that it is one of the world's first fully digital financial institutions. As of July 31, 2021, VersaBank had $1.8 billion in assets, $1.6 billion in loans, $1.5 billion in deposits, and $202 million in stockholders' equity.
| U.S. IPO Calendar | |||
|---|---|---|---|
| Issuer Business | Deal Size Market Cap | Price Range Shares Filed | Top Bookrunners |
| a.k.a. Brands (AKA) San Francisco, CA | $250M $2,341M | $17 - $19 13,888,889 | BofA Credit Suisse |
| Operates a portfolio of Millennial and Gen Z online fashion brands. | |||
| Freshworks (FRSH) San Mateo, CA | $855M $9,646M | $28 - $32 28,500,000 | Morgan Stanley JP Morgan |
| Provides a business SaaS for customer support and IT projects. | |||
| Sterling Check (STER) New York, NY | $300M $2,122M | $20 - $22 14,285,000 | Goldman JP Morgan |
| Provides tech-enabled background screening and identity verification services. | |||
| Toast (TOST) Boston, MA | $685M $17,912M | $30 - $33 21,739,132 | Goldman Morgan Stanley |
| Provides mobile and digital payment processing and other services for restaurants. | |||
| VersaBank (VBNK) London, Canada | $50M $269M | $10.37 4,821,601 | Raymond James |
| Canadian digital bank. | |||
| Argo Blockchain (ARBK) London, United Kingdom | $138M $855M | $18.40 7,500,000 | Jefferies Barclays |
| Blockchain technology company focused on large-scale crypto mining. | |||
| Brilliant Earth Group (BRLT) San Francisco, CA | $250M $1,418M | $14 - $16 16,666,667 | JP Morgan Credit Suisse |
| Digital-first retailer of ethically sourced fine jewelry. | |||
| EngageSmart (ESMT) Braintree, MA | $349M $4,093M | $23 - $25 14,550,000 | JP Morgan Goldman |
| Provides SaaS solutions for invoicing, payments, and health practice management. | |||
| Knowlton (KDC) Longueuil, Canada | $800M $3,081M | $13 - $15 57,142,857 | Goldman JP Morgan |
| Canadian maker of home, beauty, and personal care products. | |||
| Remitly (RELY) Seattle, WA | $487M $7,482M | $38 - $42 12,162,777 | Goldman JP Morgan |
| Provides a mobile payment service for international money transfers. | |||
| Sovos Brands (SOVO) Louisville, CO | $350M $1,461M | $14 - $16 23,334,000 | JP Morgan Goldman |
| Sells premium food brands including Rao's and noosa. | |||
| Thorne Healthtech (THRN) New York, NY | $126M $892M | $13 - $15 9,000,000 | BofA Cowen |
| Offers a suite of personalized dietary supplements. | |||
| Clearwater Analytics (CWAN) Boise, ID | $450M $3,656M | $14 - $16 30,000,000 | Goldman JP Morgan |
| Provides cloud-native software for investment accounting and analytics. | |||
| Cue Health (HLTH) San Diego, CA | $200M $2,429M | $15 - $17 12,500,000 | Goldman Morgan Stanley |
| Develops and sells molecular home tests for COVID-19 and other diseases. | |||
Sign up for a free trial of our premium platform, IPO Pro. Follow us on Twitter (@IPOtweet) and register for our updates on the IPO market.
Street research is expected for one company, and lock-up periods will be expiring for up to 18 companies. For access to Street research and lock-up expiration dates, sign up for a free trial of IPO Pro.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 9/16/2021, the Renaissance IPO Index was up 7.8% year-to-date, while the S&P 500 was up 19.1%. 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 14.8% year-to-date, while the ACWX was up 9.5%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include EQT Partners and Smoore International.
