After one of the busiest weeks of the year last week, things were a little slower this week, with five IPOs and one SPAC offering. However, the stream of unicorn IPOs did not stop, as three companies came to market with valuations over $1 billion.
Avantor ( AVTR ), an LBO'd manufacturer and distributor of laboratory supplies, came to market with an $8.4 billion valuation, raising $2.9 billion by offering 207 million shares at $14 per share, the low end of the revised range of $14 to $15, set just one day before its IPO, and 28% below the midpoint of its original range of $18 to $20. The company also raised $900 million from a concurrent offering of 18 million mandatory convertible preferred shares. The company had relatively flat trading on its first day, only rising 4%.
Luckin Coffee ( LK ), a Chinese coffee retailer, came to market with a $4.2 billion valuation, raising $561 million by offering 33 million shares at $17, three million more shares than originally planned and at the high end of the range of $15 to $17. Lucking popped 20% on its first day of trading. Currently at #2, Luckin plans to surpass Starbucks as the largest coffee chain in China by the end of 2019, an impressive feat given that the company has been in operation for less than two years. That said, its massive growth from less than $1 million in revenue in 2017 to over $122 million in 2018 has not come without a cost as the company has spend massive amount on capex as it rapidly expands its store base.
Fastly ( FSLY ), which operates an edge cloud platform for optimized web and application delivery, came to market with a $1.6 billion valuation, raising $180 million by offering 11.3 million shares at $16, the high end of the range of $14 to $16. The company was the best performer of the week, popping 50% on its first day of trading. With applications becoming more dependent on quick data transmission, the edge computing market is expected to nearly double over the next four years.
Applied Therapeutics (APLT), a Phase 2 biotech developing therapies for diabetic complications, raised $40 million by offering 4 million shares at $10 dollars, well below the range of $14 to $16. The company traded down 6% on its first day before ending the week just above its IPO price.
Postal Realty Trust (PSTL), a recently-formed REIT that leases properties to the USPS, raised $77 million by offering 4.5 million shares at $17 dollars, 500,000 shares fewer than originally planned and below the original range of $19 to $21. The company's share price barely moved, only losing 1% as of the end of the week.
One SPAC, AGBA Acquisition (AGBAU) also came public this week.
In addition, two companies postponed their public offerings this week. PIMCO Mortgage Income Trust (PMTG), a newly-formed residential mortgage REIT managed by PIMCO, was planning to raise $1 billion by offering 50 million shares at $20 per share, but backed away citing unfavorable equity market conditions. A lack of investor enthusiasm for a new residential mortgage REIT could also be at play. ConversionPoint Holdings (CPTI), which provides an AI-integrated SaaS platform for marketing and e-commerce services also postponed its IPO.
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| 6 IPOs During the Week of May 13th, 2019 |
|Market Cap |
|Price vs. |
|First Day |
| Fastly ( FSLY ) ||$180M ||$1,619M ||7% ||+50% ||+50% |
| Operates an edge cloud platform for optimized web and application delivery. |
| Luckin Coffee ( LK ) ||$561M ||$4,172M ||6% ||+20% ||+20% |
| Chinese coffee retailer offering pick-up and delivery via a mobile app. |
| Avantor ( AVTR ) ||$2,898M ||$8,360M ||-28% ||+4% ||+4% |
| LBO'd distributor and manufacturer of laboratory supplies and services. |
| AGBA Acquisition (AGBAU) ||$40M ||$52M ||0% ||n/a ||+0% |
| Blank check company targeting the services sector in China. |
| Applied Therapeutics (APLT) ||$40M ||$191M ||-33% ||-6% ||+0% |
| Phase 2 biotech developing therapies for diabetic complications. |
| Postal Realty Trust (PSTL) ||$77M ||$114M ||-15% ||+0% ||-1% |
| Recently-formed REIT that manages and leases properties to the USPS. |
Five companies also joined the pipeline with initial filings, including Crowdstrike
(CRWD), a cybersecurity provider that we estimate could raise $400 million, discount grocery chain Grocery Outlet Holdings
(GO), which we estimate could raise up to $300 million, and Fiverr International
(FVRR), and online market place for hiring freelancers.
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| 5 Filings During the Week of May 13th, 2019 |
|Sector ||Lead |
| G Medical Innovations (GMVD) ||$15M ||Health Care ||HC Wainwright |
| Provides medical devices for monitoring various health conditions. |
| Safe Auto Insurance (SAIG) ||$50M ||Financials ||BofA ML |
| Direct-to-consumer auto insurance provider. |
| Fiverr International (FVRR) ||$100M ||Technology ||JP Morgan |
| Online marketplace to hire and manage remote freelancers. |
| CrowdStrike (CRWD) ||$400M ||Technology ||Goldman |
| Provides cloud-native endpoint security software for large enterprises. |
| Grocery Outlet Holdings (GO) ||$300M ||Consumer Staples ||BofA ML |
| Operates a network of more than 300 independently-run discount grocery stores. |
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 5/16/19, the Renaissance IPO Index was up 34.7% year-to-date, while the S&P 500 had a gain of 15.6%. Renaissance Capital's IPO ETF ( IPO
) tracks the index, and top ETF holdings include Elanco (ELAN) and Okta (OKTA). The Renaissance International IPO Index was up 10.2% year-to-date, while the ACWX was up 9.8%. Renaissance Capital's International IPO ETF ( IPOS
) tracks the index, and top ETF holdings include SoftBank and Xiaomi.
The article US IPO Weekly Recap: Fastly tops a 5-IPO Week
originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com. Investment Disclosure:
The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO)
, Renaissance International ETF (symbol: IPOS)
, or separately managed institutional accounts may have investments in securities of companies mentioned.