The IPO market is in full swing with 14 filings this week, led by Uber (UBER), the world's largest ridesharing platform. We estimate that Uber could raise as much as $10 billion as it reportedly seeks a $90 to $100 billion valuation, making it the largest IPO in over five years. The San Francisco, CA-based company booked revenue of $11.3 billion in 2018, a 42% increase over the prior year, but burned $2.1 billion in free cash flow. Uber follows closely behind the IPO of competitor Lyft (LYFT), which has fallen well below its IPO price (-17%), and traded off significantly in the days leading up to the Uber filing.
| 4 IPOs During the Week of April 8th, 2019 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 04/12 |
| Jumia (JMIA) | $196M | $1,149M | 0% | +76% | +76% |
| Africa's largest e-commerce platform. | |||||
| PagerDuty (PD) | $218M | $2,076M | 20% | +59% | +65% |
| Provides a SaaS platform that monitors and alerts businesses of IT issues. | |||||
| Tufin Software (TUFN) | $108M | $537M | 8% | +36% | +50% |
| Provides enterprise software for managing network security policies. | |||||
| B. Riley Principal Merger (BRPM.U) | $125M | $161M | 0% | +0% | +0% |
| Blank check company formed by diversified financial services firm B. Riley Financial. | |||||
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Three IPOs raised $522 million in the IPO market this past week. Jumia Technologies (JMIA) lead the week, surging 76% on its first day. The company raised $196 million at a $1.15 billion market cap, in line with expectations. While the company has significant losses to date, it looks to take advantage of the massive e-commerce opportunity in Africa.
PagerDuty (PD), the first SaaS deal of the year, priced above its upwardly revised range, raising $218 million at market cap of $2.1 billion. The company popped 59% on its first trading day and finished the week even higher at +65% from its IPO, as investors continue to pay up for high-growth SaaS companies.
Tufin Software (TUFN) priced its IPO at the high end of the range, raising $108 million at a $537 million market cap. The company traded up 36% on its first day and finished the week +50% from its IPO.
One SPAC, B. Riley Principal Merger (BRPM.U), raised $125 million.
| 14 Filings During the Week of April 8th, 2019 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Applied Therapeutics (APLT) | $86M | Health Care | Citi |
| Phase 2 biotech developing therapies for diabetic cardiomyopathy. | |||
| Axcella Health (AXLA) | $86M | Health Care | Goldman |
| Developing therapeutics and dietary products for amino acid dysregulation. | |||
| Cortexyme (CRTX) | $86M | Health Care | BofA ML |
| Phase 1b biotech developing therapies for Alzheimer’s disease. | |||
| Mayville Engineering (MEC) | $100M | Industrials | Baird |
| Provides end-to-end manufacturing services to OEM customers. | |||
| Milestone Pharmaceuticals (MIST) | $86M | Health Care | Jefferies |
| Phase 3 biotech developing therapies for heart rate conditions. | |||
| NextCure (NXTC) | $86M | Health Care | Morgan Stanley |
| Clinical-stage biotech developing cancer immunotherapies. | |||
| Ondas Holdings (ONDS) | $46M | Communication Services | |
| Provides a wireless radio system for broadband networks. | |||
| Parsons (PSN) | $500M | Industrials | Goldman |
| Provides technology-driven defense, intelligence, and infrastructure solutions. | |||
| South Plains Financial (SPFI) | $50M | Financials | KBW |
| West Texas commercial bank with 21 full-service locations. | |||
| AGBA Acquisition (AGBAU) | $40M | SPAC | Maxim |
| Blank check company targeting the services sector in China. | |||
| Diamond Eagle Acquisition (DMDEU.RC) | $350M | SPAC | |
| Fifth blank check company formed by entertainment veteran Jeff Sagansky. | |||
| Uber (UBER) | $10,000M | Technology | Morgan Stanley |
| Operates the world's largest on-demand ridesharing network. | |||
| Red River Bancshares (RRBI) | $30M | Financials | FIG Partners |
| Louisiana commercial bank with 24 locations across the state. | |||
| So-Young International (SY) | $150M | Technology | Deutsche Bank |
| China-based online marketplace for plastic surgery services. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 4/11/19, the Renaissance IPO Index was up 33.0% year-to-date, while the S&P 500 had a gain of 15.9%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Elanco (ELAN) and VICI Properties (VICI). The Renaissance International IPO Index was up 12.2% year-to-date, while the ACWX was up 12.9%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include SoftBank and Xiaomi.
