Editor’s note: This article is regularly updated to bring you more current information.
This week’s upcoming IPOs will be some of tech’s hottest companies. Keep in mind that more than $7 billion is expected to be raised. This compares to about $3.9 billion last week.
The next two weeks will mark the end of this year’s IPOs. Note that things will not get into gear until the middle of January.
But of course, the year has been standout for new offerings. For 2020 so far, the Renaissance IPO Index has logged a sizzling 108.3% return. By comparison, the S&P 500 is up a 13.5%.
The year has also seen the popularity of SPACs (Special-Purpose Acquisition Companies). These are publicly traded companies that merge with operating companies. For the most part, SPACs have proven easier to structure than the traditional IPO.
Let’s take a look at five upcoming IPOs:
- Certara (CERT)
- PubMatic (PUBM)
- DoorDash (DASH)
- Airbnb (ABNB)
- C3.ai (AI)
Upcoming IPOs: Certara (CERT)
Certara operates a software platform that uses biosimulation to accelerate the discovery and development of drugs. It is essentially a virtual trial, which involves virtual patients. The technology can help answer important questions like: What will the human response be to a drug? How will other drugs interfere with it? What are safe doses?
The company is the leader in this emerging space. Over 1,600 biopharma companies and academic institutions have used the system across 60 countries. Note that 17 global regulatory agencies license the software for new drug submissions, such as the FDA and Europe’s EMA.
For the first nine months of this year, the revenues reached $179 million, up from $155 million in the same period a year ago. The company also generated $5 million in profits.
The ROI (Return On Investment) for Certara can be significant because of the enormous costs of drug development. For example, one customer for Certara saved more than $500 million over a three year period.
For the IPO, the company plans to issue 24.4 million shares at a range of $19 to $22. The listing will be on the NASDAQ under the ticker of CERT. The lead underwriters include Jefferies, Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Credit Suisse (NYSE:CS), Barclays (NYSE:BCS) and William Blair.
For this week’s upcoming IPOs, PubMatic is one of the smaller ones. The company expects to raise about $100 million.
Founded in 2006, PubMatic operates an ad network that processes about 134 billion impressions daily. The focus has been on creating a system that helps customers make data-driven decisions with their ad campaigns to improve the ROI and marketplace liquidity.
PubMatic is omnichannel, with formats for both the web and mobile devices. There are currently about 1,100 publishers and app developers on the platform, which include biggies like Verizon (NYSE:VZ).
Although, the growth ramp for PubMatic has been moderate. For the first nine months of this year, revenues went from $79.5 million to $92.5 million, up about 16% or so. Yet the company is profitable.
The price range on the IPO is $16 to $18 and the shares will be listed on the NASDAQ under the ticker of PUBM. The lead underwriters include Jefferies and RBC Capital Markets.
The demand for the DoorDash IPO looks robust. Last week, the company announced that it boosted the price range on the offering to $90 to $95, up from the prior range of $75 to $85. The expectation is to issue 33 million shares.
DoorDash, which is the leading online restaurant delivery provider, has seen its business surge as a result of the Covid-19 pandemic. During the first nine months of this year, revenues jumped from $587 million to $1.92 billion. The company has also been able to generate strong cash flows.
True, as the vaccines start to roll out, the growth ramp could decline. But Wall Street does not seem to be concerned about this. The belief is that online delivery is a secular trend.
DoorDash also has the advantage of a strong brand and scale. The company’s network has 390,000 merchants, 18 million customers and one million Dashers. There are also partnerships with 175 of the 200 largest national restaurant brands in the U.S.
As for the IPO, the shares will be listed on the NYSE under the ticker of DASH. The lead underwriters include Goldman Sachs (NYSE:GS), J.P. Morgan (NYSE:JPM), Barclays, Deutsche Bank (NYSE:DB), RBC Capital Markets and UBS Investment Bank (NYSE:UBS).
Among this week’s upcoming IPOs, Airbnb will definitely get lots of buzz. Of course, the company is the pioneer and dominant player in the home-sharing market.
But earlier in the year, the prospects of an IPO looked bleak as the Covid-19 pandemic hit the business particularly hard. However, the company raised $2 billion from investors, cut back costs and streamlined operations. Airbnb was also smart to refocus its business on local listings.
As a result of these actions, Airbnb has staged a remarkable comeback, as revenues have recovered faster than other online travel operators. The company was even able to get to profitability. And as for next year, there will likely be a spike in growth as the economy recovers and tourism gets back to normal levels.
Regarding the IPO, the company priced its shares at $68, above plans for a range of $56 to $60 (which itself was above the prior range of $44 to $50) and the stock will be listed on the NASDAQ under the ticker of ABNB.
The lead underwriters include Morgan Stanley, Goldman Sachs, Allen & Company, BofA Securities, Barclays, Citigroup (NYSE:C), BNP Paribas, Mizuho Securities, Credit Suisse, Deutsche Bank, Jefferies and Wells Fargo (NYSE:WFC).
Tom Siebel is one of the most successful tech entrepreneurs. After a successful stint at Oracle in the 1980s, he would go on to launch Siebel Systems, which pioneered the CRM (Customer Relationship Management) space. He would eventually sell the company to Oracle (NYSE:ORCL).
Even though he was a billionaire, he still had the entrepreneurial itch. So he started C3.ai. His premise was that enterprise AI would be very big.
And of course, he was right. To capitalize on this opportunity, Siebel developed a comprehensive platform to make it easier for companies to implement AI technologies. This involved using low-code approaches but also deep integrations with platforms like Microsoft’s (NASDAQ:MSFT) Azure, Amazon’s (NASDAQ:AMZN) AWS, IBM’s (NYSE:IBM) Cloud and Google Cloud. The technology can also be used for on-premise environments.
As should be no surprise, C3.ai has seen substantial growth. For fiscal 2020, revenues went from $91.6 million to $156.7 million or 71% year-over-year.
For the IPO, the company plans to issue 15.5 million shares at a range of $31 to $34 and the stock will be listed on the NYSE under the ticker AI. The lead underwriters include Morgan Stanley, J.P. Morgan, BofA Securities and Deutsche Bank.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.