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Catching Up On Tech IPOs

Morning Report: Last week was busy on the IPO front. Let’s get up to speed.

Last week brought a sheaf of IPO news to the technology industry. The new filings and debuts could help propel this year’s crop of newly public technology companies to a more respectable finish to the year than was expected at the end of Q3.

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Tech IPOs — we count tech-centric, non-biotech companies from any country that list in the United States as “tech IPOs” — have had a slow few years. The last two years, 2015 and 2016, both turned in slack performances that left quite a lot of accreted private wealth illiquid.

To date, 2017 is no IPO savior. But last week’s IPO news could help this year put up a more respectable tally, and at least dampen some of the pressure we see today in the private-public logjam.

Here’s the core fact set from last week:

  • Bandwidth files to go public.
    • The telco-as-API company filed to go public last week, with a target raise of $85 million scribbled down. Unlike its obvious market comp, Twilio, Bandwidth is profitable. And also unlike Twilio, it’s growing slowly. Our coverage at the time noted the firm’s debt load – over $41 million – was large when compared to its cash hoard which totals under $6 million. Bandwidth intends to use some of its IPO proceeds to pay down debt, however. If the company can go public and use some of that cash to lower its debts, and some to grow a bit faster, it may be able to hang onto GAAP profits and improve its outlook in one move.
  • MongoDB prices at $24, has big first day.
    • MongoDB’s IPO financials (more here) and value (more here) drew our attention earlier in October. The same numbers also drew the market’s attention as it turned out. MongoDB raised its IPO price range to as much as $22, from a more conservative $18 to $20 range, and then priced at $24. The firm closed up 34 percent in its first day of trading from that elevated start point.
  • SendGrid files to go public.
    • SendGrid dropped its IPO docs last week, putting up a placeholder $100 million mark, leaving us largely in the dark regarding how much it may finally raise and at what valuation. In the first six months of 2017, the firm grew 43 percent compared to the year-ago period. And it managed to shrink its net loss from $3.5 million in the first two quarters of 2016 to $3.1 million in the first half of 2017. The firm’s net cash flow has been positive for years, and the firm is nearly free cash flow positive. More when it prices.
  • Stitch Fix wows.
    • Stitch Fix, a subscription-powered apparel company, put up impressive numbers in its IPO filing. The firm showed big growth during its fiscal 2015, 2016, and 2017, ending the latter with just under $1 billion ($977 million) in revenue and a loss of just $594,000. Take out some share-based costs, and the firm would have managed to grow from $730 million the year before while generating around $25 million in profit at the same time. So much for losing money as the only way to grow. Oh, and Stich Fix was comfortably profitable in both its fiscal 2015 and 2016.

Got all that? If not it’s ok. Just do your homework. The holidays beckon, and there’s only so much year left to get out the door.

From the Crunchbase Daily:

SoFi eyed sale to Schwab

  • Online lender SoFi held conversations with brokerage firm Charles Schwab and others about a potential acquisition, according to media reports citing unnamed sources. Talks with Schwab reportedly fell apart over the $8 billion purchase price SoFi was seeking.

Fair raises nearly $1B debt for car leases

  • Fair, a car leasing app that offers flexible rental terms, said it closed a funding round of undisclosed size led by BMW i Ventures and joined by Penske Automotive Group and others. The Santa Monica, Calif.-based company also announced that it secured offers for nearly $1 billion in debt financing from a group of institutional investment banks.

ADC Therapeutics closes on $200M

  • ADC Therapeutics, a Swiss developer of cancer-fighting drugs, announcedthat it has raised $200 million in a financing round backed by investors including Auven Therapeutics, Redmile, the Wild Family Office and AstraZeneca.

Startups target emergency communication

  • With the number of global incidents that can be classified as emergencies seemingly on the rise, a number of startups have emerged to help enhance communication during such times, Crunchbase News reports.