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The unicorn IPO market is heating up

September 30, 2020
Tim Young

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The unicorn IPO market is heating up

Gold has grabbed investors’ attention in 2020 with dream outcomes for holders of a number of ASX-listed small-cap gold stocks. But there is another yellow metal where fundamentals are lining up for potentially a significant rerating of relevant stocks – Uranium.

Unicorn is a term used for a privately-held, venture-backed business valued over $1 billion.

An interesting note about Silicon Valley as of June 23rd 2020 is that it had not produced a single IPO vs the same period in 2019 having produced 9 IPOs.

In the past these companies have most of the time been able to get capital raisings from VCs, some even before having any traction and some even before launching. Most times though your concept must be proven before anyone will invest. An example of this is Masterclass which managed to raise funds before they even launched.

Around the end of June 2020, COVID-19 created a lot of uncertainty even for the Venture Capital companies which have been an important cog in the wheel of Silicon valley and the huge amount of capital that has been raised for these companies.

Over the course of the month March to end of June, only 541 VC deals were made in the seed to Series B stages, compared with 964 deals in the same period in 2019–a 44 percent decrease in deals. The change varies across investment types, having the biggest impact on seed-stage deals, which dropped by 57 percent, down from 483 deals in 2019 within the three-month time period, to 209 deals in the March-June 2020 period.

 

Ref:crunchbase.com

Coming into Sept 20th 2020 Snowflake, Jfrog, Sumo Logic and Unity each raised price ranges days before IPO, to meet what had seemed like growing enthusiasm from public markets. Yet each still opened higher than its offering price, with cloud data-warehousing company Snowflake’s value doubling to make it the largest software IPO in history and Unity up 30%.

This week 11 IPOs and two direct listings are scheduled to go public in the week ahead in the U.S.

The diverse group includes three foreign tech issuers, two biotech’s, two US tech unicorns, a sporting goods retailer, an avocado supplier, a medical device maker, and a foreign education company.

Two of these will be Palantir and Asana will be the year’s first direct listings, with estimated market values at listing of more than $20 billion and $5 billion, respectively.

The Securities and Exchange Commission have also approved a new type of direct listing. Companies can go public and raise cash from public market investors on the NYSE. The move comes after a record number of companies have turned to SPACs, or special purpose acquisition companies, as a backdoor way to be listed on exchanges this year.  To-date, 67 SPAC offerings have raised a record $23.9B in 2020, making up nearly one-fifth of the total funds raised through initial public offerings.

The view is that more and more Unicorns will be looking to direct to the IPO market as their exit moving forward and the IPO market looks set to heat up running into the election in November.

There are a number of upcoming IPOs that will hit the market. Reach Markets are expecting to list 3 to 4 exciting technology companies by the end of the year. Register to be on the distribution list.

There are also a number of unlisted opportunities only available to 708 investors. Click here to receive further information on open deals.

 

High Profile Bay Area-Based Companies Set for Post-Labor Day IPO

CompanyTickerBusiness SummaryFile DateDeal SizeHeadquarters
AsanaSANA.RCProvides enterprise task management and collaboration software.08/24Direct ListingSan Francisco, CA
Corsair GamingCRSRDesigns and supplies personal computer and gaming hardware components.08/21$100MFremont, CA
SnowflakeSNOWProvides cloud-based SQL database software and warehousing.08/24$2,000MSan Mateo, CA
Sumo LogicSUMOProvides on-demand cloud log management solutions to enterprises.08/24$100MRedwood City, CA
Unity TechnologiesUProvides a real-time 3D video game development platform.08/24$1,000MSan Francisco, CA
JFrogFROGSells software tools that streamline app development.08/24$100MSunnyvale, CA

Chart from Evergreengavekal.com

 

Sources:

 


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