US IPO Week Ahead: A 6-IPO week led by cannabis and the cloud

Six IPOs are set to raise $723 million in the week ahead, along with one SPAC.

Cloud-based software development platform Dynatrace (DT) is by far the largest, expected to raise over half of the week's proceeds at a $3.8 billion valuation. It's joined by a large early-stage cannabis producer (SNDL), a Chinese AR play (WIMI), a cancer biotech (RAPT), a US sushi chain (KRUS), and a micro-cap battery producer (FLUX).

Bought by Thoma Bravo for $2.5 billion in 2014, Dynatrace is raising $427 million at the $12 midpoint. While it will still carry substantial debt post-IPO, Dynatrace is profitable on an adjusted basis, and has so far successfully transitioned from selling on-prem software licenses to its new cloud-based SaaS (84% of MRQ sales).

Canadian cannabis producer Sundial Growers (SNDL) plans to list on the Nasdaq with a $1.6 billion market cap. With only $1 million in historical trailing sales, it expects to quickly ramp up in 2019 with its first harvest, while a recent acquisition gives it a foothold in the UK. Last year's cannabis IPO Tilray (TLRY) has traded down 40% in 2019, though it is still more than 140% above its offer price, at a valuation of over 100x LTM sales.

WiMi Hologram Cloud (WIMI) is targeting $34 million at a market cap of nearly $500 million. A leading player in China's holographic augmented reality space, the founder-owned company saw its sales jump 58% in the MRQ to $11 million, with a strong net margin of 48%.

Backed by The Column Group and Kleiner Perkins, RAPT Therapeutics (RAPT) is developing a therapies for difficult-to-treat cancers and inflammatory diseases.

Kura Sushi USA
(KRUS), being spun out of its Japanese parent (TSE: 2695), is targeting a market cap $123 million; the small chain (22 stores) believes that it can expand its footprint by 13x in the US, and aims to be the first US-based restaurant to IPO in four years.

Micro-cap battery maker Flux Power (FLUX) more than doubled its revenue to $6 million in the past 9 months, though it is highly unprofitable (-127% EBITDA margin).

Blank check company Netfin Acquisition (NFINU) is raising $220 million for a fintech business. It is led by Rick Maurer, founder and CEO of Longview Resources Group, and Martin Jaskel, a UK banker and director at European American Capital.

U.S. IPO Calendar
Issuer Business Deal Size Market Cap Price Range Shares Filed Top Bookrunners
WiMi Hologram (WIMI)Beijing, China $34M $496M $7.50 - $9.50 4,000,000 Benchmark Maxim
Chinese provider of ad services and software used in holographic augmented reality.
Dynatrace (DT)Waltham, MA $427M $3,771M $11 - $13 35,597,068 Goldman JP Morgan
Provides a software intelligence platform for the enterprise cloud.
Kura Sushi USA (KRUS)Irvine, CA $44M $123M $14 - $16 2,900,000 BMO Stephens
Operates 22 Japanese restaurants in the US featuring revolving sushi bars.
RAPT Therapeutics (RAPT)South San Francisco, CA $75M $359M $14 - $16 5,000,000 BofA ML Wells Fargo
Phase 1 biotech developing therapies for cancer and inflammatory diseases.
Sundial Growers (SNDL)Calgary, Canada $130M $1,607M $12 - $14 10,000,000 Cowen BMO
Early-stage Canadian cannabis producer.
Flux Power (FLUX)Vista, CA $13M $59M $9 1,449,275 Roth Cap. Maxim
Manufactures and sells lithium-ion batteries and storage solutions.
Netfin Acquisition Corp (NFINU)New York, NY $220M $281M $10 22,000,000 B. Riley FBR
Blank check company targeting a fintech business in an emerging market.

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IPOs are expected to price this week

Dynatrace Holdings

Flux Power Holdings

Kura Sushi USA

RAPT Therapeutics

Sundial Growers

WiMi Hologram Cloud

Netfin Acquisition Corp

Pre-IPO Research

IPO Market Snapshot

US IPO Week Ahead: A 6-IPO week led by cannabis and the cloud

Investment Disclosure: Renaissance IPO ETF (symbol: IPO) Renaissance International ETF (symbol: IPOS)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.