Four IPOs raised $767 million. Even as the broader IPO market traded off, all four companies this week were positive and three popped 40% or more. Big data software provider Elastic (ESTC) priced well above its range and flew up 94%. With almost $200 million in sales, Elastic's 79% growth puts it in a rare echelon of software companies. Freelancer marketplace Upwork (UPWK) gained 40% and next-gen diagnostics company Guardant Health was up 54%. For now, the unicorns still appear to be in high demand.
Four blank check companies also completed their public offerings to raise $780 million. There have been 37 SPACs this year, surpassing the full-year 2017 (34) and already marking the biggest year since 2007.
The broader IPO market pulled back this week, particularly the high-flying tech sector. The IPO Index slumped 5.4%, compared to the S&P 500's -1.0%. As of Friday, just 53% of 2018 IPOs trade above the offer price, the lowest point since April. The VIX Volatility Index finished the week near 15, near where IPO activity starts to be impacted.
The US IPO pipeline gained its only billion-dollar deal: China's Tencent Music (TME) filed for a US IPO that could raise $2 billion. Other notable filings included Brazilian payments processor StoneCo (STNE) and deepwater E&P EnVen Energy (ENVN).
| 8 IPOs During the Week of October 1st, 2018 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 10/05 |
| Elastic (ESTC) | $252M | $3,165M | 31% | +94% | +94% |
| Provides open-source data search and visualization software. | |||||
| Guardant Health (GH) | $238M | $1,707M | 19% | +69% | +54% |
| Makes non-invasive blood-based cancer diagnostics tests. | |||||
| Upwork (UPWK) | $187M | $1,870M | 36% | +41% | +40% |
| Marketplace for businesses to hire and manage remote freelancers. | |||||
| Kodiak Sciences (KOD) | $90M | $375M | -29% | +2% | +4% |
| Phase 1 biotech developing therapies for common ophthalmic diseases. | |||||
| ARYA Sciences Acquisition (ARYAU) | $125M | $156M | 0% | +2% | +2% |
| Blank check company formed by Perceptive Advisors to acquire a healthcare business. | |||||
| Collier Creek (CCH.U) | $400M | $496M | 0% | +2% | +2% |
| Blank check company led by Pinnacle Foods Chairman Roger Deromedi. | |||||
| EdtechX Acquisition (EDTXU) | $55M | $69M | 0% | +0% | +0% |
| Blank check company formed by IBIS Capital to acquire an education technology business. | |||||
| ChaSerg Tech Acquisition (CTAC.U) | $200M | $256M | 0% | n/a | +0% |
| Blank check company formed by tech veterans to acquire a technology company. | |||||
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| 8 Filings During the Week of October 1st, 2018 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Axonics Modulation Tech (AXNX) | $86M | Health Care | BofA ML |
| Commercializing a neural implant for overactive bladder and incontinence. | |||
| Uranium Trading (UTC) | $58M | Materials | B. Riley FBR |
| Newly-formed vehicle to invest in the civil uranium market. | |||
| Orchard Therapeutics (ORTX) | $173M | Health Care | JP Morgan |
| Developing stem cell gene therapies for rare diseases. | |||
| EnVen Energy (ENVN) | $300M | Energy | Citi |
| E&P focused on deepwater oil projects in the Gulf of Mexico. | |||
| Twist Bioscience (TWST) | $86M | Health Care | JP Morgan |
| Manufactures synthetic genes and other DNA-based products. | |||
| Alberton Acquisition (ALACU) | $100M | SPAC | Chardan |
| Hong Kong-based blank check company. | |||
| Tencent Music (TME) | $1,000M | Technology | BofA ML |
| China's largest online music-streaming service. | |||
| StoneCo (STNE) | $100M | Technology | Goldman |
| Brazilian cloud-based online payment processor. | |||
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 1.9% year-to-date, while the S&P 500 is up 7.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Spotify (SPOT) and Athene (ATH). The Renaissance International IPO Index is down 9.0% year-to-date, while the ACWX is down 4.6%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Samsung BioLogics and innogy.
