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Renaissance Capital's July IPO Market Update

August 1, 2023

Eleven issuers raised a combined $939 million in July, well below the 10-year average (22 IPOs, $5.1B). Four deals raised $80 million or more, along with the year’s first direct listing (SRFM), and a wave of small issuers, which have largely disappeared in recent months. The two largest IPOs, DTC beauty retailer ODDITY Tech (ODD) and inflammatory disease biotech Apogee Therapeutics (APGE), each raised $100+ million and together accounted for more than three-quarters of monthly proceeds. Excluding the sole direct listing, July IPOs averaged a -10% return from offer, weighed down by heavy losses from the group of micro-caps; the larger names averaged a strong 21% gain, and three of the four finished the month above issue. Amid improving returns from sizable deals and signs of an accommodative monetary policy on the horizon, the Renaissance IPO Index rocketed 12.2%, strongly outperforming the S&P 500’s 3.2% gain. Twelve IPOs joined the pipeline, only one of which plans to raise more than $30 million, and updates from larger deals on file slowed. Four blank check IPOs began trading in July and merger completions continued at a steady pace, while new SPAC merger announcements sank to a post-2020 low. With the IPO market entering the typically-slow month of August, it’s likely that most notable issuers will now wait until the fall to debut. We still expect to see a gradual pickup after Labor Day, though filing activity will first need to bounce back to support a rebound through year-end.

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