Eight IPOs and one SPAC entered the public markets this past week led by Vroom (VRM), which popped 118% in the best first day for a tech IPO since 2018. Three health care IPOs finished the week up more than 40%. Every IPO this quarter has either upsized its offering or priced above the midpoint, outside of the two smallest deals. The COVID-19 pandemic continues to shape the IPO market: This week’s successful offerings included innovative health care plays and companies that benefited from quarantined consumers buying cars online (Vroom) or completing home improvement projects (AZEK).
Two notable companies joined the public pipeline, as Softbank-backed insurtech Lemonade (LMND) filed to raise $100 million and analytics provider Dun & Bradstreet (DNB) filed to raise $1 billion. News also broke on several pre-IPO companies valued at $10+ billion, with Palantir, Snowflake Computing, and Quicken Loans all moving closer to an IPO. Airbnb’s CEO said he wasn’t ruling out a 2020 IPO, while Instacart joined the decacorn club in a pre-IPO round that valued it at $13.7 billion.
Online car marketplace Vroom (VRM) priced its upsized deal above the upwardly revised range to raise $468 million at a $2.8 billion market cap. Fast-growing and unprofitable, the company came to market a significant discount to close peer Carvana (CVNA) and popped 118% on its first day of trading, before settling down to a return of 96% from IPO.
In the largest deal of the week, AZEK (AZEK) upsized its deal and priced above the range, raising $765 million at a $3.4 billion market cap. Backed by Ares and Ontario Teachers’, the company pitched investors on its leading market share and margin improvement, valued at a clear discount to close peer Trex (NYSE: TREX), and finished up 18%.
Four biotechs entered the public markets this past week, three of which are currently in preclinical stages of development, making it the busiest week ever for preclinical biotech IPOs. All three upsized their offerings and priced at the high end (PCVX) or above (RNA, GBIO) the range.
Preclinical muscle disease biotech Avidity Biosciences (RNA) raised $259 million at a $680 million market cap. The company expects to submit an IND in 2021 and begin a Phase 1/2 trial by the end of the same year for its lead candidate, a therapy for a rare muscle disease. Avidity finished up 58%.
Preclinical vaccine biotech Vaxcyte (PCVX) raised $250 million at an $841 million market cap. Vaxcyte is developing next-generation pneumonia vaccines, a $7 billion market, and expects to begin clinical trials for its lead candidate in the 2H21. It finished up 63%.
Preclinical rare disease biotech Generation Bio (GBIO) raised $200 million at a $916 million market cap. The company plans to begin IND-enabling studies in 2021 for preclinical gene therapy candidates for two rare liver diseases. Generation finished up 30%.
Small clinical-stage biotech Lantern Pharma (LTRN) priced at the low end of the range this past week, raising $26 million at a $104 million market cap. The company is redeveloping abandoned drugs for non-small cell lung cancer and finished down 2%.
Two Chinese issuers completed US IPOs this past week. Chinese cancer test provider Burning Rock (BNR) priced above the range to raise $223 million at a $1.7 billion market cap. The fast-growing company is China’s #1 player in next-generation DNA sequencing, but it will be highly unprofitable for the foreseeable future. Burning Rock finished up 49%.
Chinese mobile data marketplace uCloudlink (UCL) priced at the low end of the range to raise $36 million at a $532 million market cap. uCloudlink, which offers mobile data platforms, grew 36% in the 1Q20 with positive net income, though its gross margin saw a sharp decline. It finished down 8%.
| 9 IPOs During the Week of June 8th, 2020 | |||||
|---|---|---|---|---|---|
| Issuer Business |
Deal Size |
Market Cap at IPO |
Price vs. Midpoint |
First Day Return |
Return at 06/12 |
| Vroom (VRM) | $468M | $2,770M | 38% | +118% | +96% |
| Online used car dealer operating throughout the US. | |||||
| Vaxcyte (PCVX) | $250M | $841M | 7% | +63% | +63% |
| Preclinical biotech developing next-generation pneumococcal vaccines. | |||||
| Avidity Biosciences (RNA) | $259M | $680M | 20% | +58% | +58% |
| Preclinical biotech developing antibody therapies for muscle disorders. | |||||
| Burning Rock Biotech (BNR) | $223M | $1,716M | 14% | +49% | +49% |
| Provides DNA sequencing-based cancer therapy selection tests in China. | |||||
| Generation Bio (GBIO) | $200M | $916M | 12% | +30% | +30% |
| Preclinical biotech developing gene therapies for rare diseases. | |||||
| AZEK (AZEK) | $765M | $3,435M | 15% | +18% | +18% |
| Manufactures composite decking materials and other building products. | |||||
| Hudson Exec. Investment (HECCU) | $360M | $435M | 0% | +3% | +2% |
| Blank company formed by Hudson Executive Capital targeting fintech or healthcare. | |||||
| Lantern Pharma (LTRN) | $26M | $104M | -6% | +0% | -2% |
| Biotech redeveloping abandoned drugs for non-small cell lung cancer. | |||||
| uCloudlink (UCL) | $36M | $532M | -6% | -4% | -8% |
| Mobile data traffic sharing marketplace in China. | |||||
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Three IPOs and six SPACs submitted initial filings. In addition to Dun & Bradstreet (DNB) and Lemonade (LMND), Chinese car products marketplace Car House Holding (CARH) filed to raise $37 million.
Goldman Sachs’ SPAC GS Acquisition II (GSAH.U) filed to raise $700 million, financial services SPAC Fusion Acquisition (FUSE.U) filed to raise $250 million, investment firm’s SPAC Capstar Special Purpose Acquisition (CPSR.U) filed to raise $200 million, auto SPAC Kensington Capital Acquisition (KCAC.U) filed to raise $175 million, EcoR1’s biotech SPAC Panacea Acquisition (PANA.U) filed to raise $125 million, and tech SPAC PTK Acquisition (PTK.U) filed to raise $100 million.
| 9 Filings During the Week of June 8th, 2020 | |||
|---|---|---|---|
| Issuer Business |
Deal Size |
Sector | Lead Underwriter |
| Car House Holding (CARH) | $37M | Technology | Network 1 |
| Operates an online B2B marketplace for car products in China. | |||
| Panacea Acquisition (PANA.U) | $125M | SPAC | Cowen |
| Blank check company formed by EcoR1 Capital targeting the biotech industry. | |||
| PTK Acquisition (PTK.U) | $100M | SPAC | Chardan |
| Blank check company targeting a technology business. | |||
| Capstar Acquisition (CPSR.U) | $200M | SPAC | Citi |
| Blank check company formed by investment firm Capstar Partners. | |||
| GS Acquisition II (GSAH.U) | $700M | SPAC | Goldman |
| Second blank check company formed by Goldman Sachs. | |||
| Dun & Bradstreet (DNB) | $1,000M | Industrials | Goldman |
| Provides commercial data analytics services. | |||
| Kensington Acquisition (KCAC.U) | $175M | SPAC | UBS |
| Blank check company targeting the automotive industry. | |||
| Fusion Acquisition (FUSE.U) | $250M | SPAC | Cantor Fitz. |
| Blank check company targeting the financial services industry. | |||
| Lemonade (LMND) | $100M | Financials | Goldman |
| Online self-serve property and casualty insurer. | |||
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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 6/11/20, the Renaissance IPO Index was up 18.0% year-to-date, while the S&P 500 was down 7.1%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include DocuSign (DOCU) and Uber (UBER). The Renaissance International IPO Index was up 14.0% year-to-date, while the ACWX was down 13.3%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.
