Public Markets Startups

SmileDirectClub and CloudFlare To Go Public This Week

SmileDirectClub and CloudFlare, which set their initial IPO pricing ranges last week, are set to make their debut on the public markets later this Thursday and Friday, respectively.

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SmileDirectClub, which makes oral inserts to straighten teeth at home, much to the frustration of the dental community, will be listing on the Nasdaq and set its price range between $19 and $22 per share. The company, based in Nashville, last had a private valuation of about $3.18 billion, according to Crunchbase, and received $380 million in total funding as a private company. SmileDirectClub is looking to raise more than $1.1 billion when it goes public.

If the company ends up pricing at the midpoint of its range, and after taking into account it’s two-class share structure, its valuation as a public company would be around $7.93 billion.

As we discussed when SmileDirectClub dropped its S-1 last month, the company posted tremendous revenue growth over the past year. Its H1 2019 revenue was $373.5 million, up from $175.1 million during the same period a year ago. Its operating costs and losses are also up, but that’s almost to be expected of a 2019 IPO.

Cloudflare, on the other hand, is expected to go public on the New York Stock Exchange on Friday with a price range of $10 to $12 per share. The San Francisco-based company raised $332.1 million in total funding as a private company and was last valued at $3.25 billion.

Cloudflare reported healthy revenue growth of $129.2 million in the first half of 2019, up from $87.1 million during the same period last year. It also reported net losses of $36.8 million in the first half of 2019, up from $32.5 million in the first half of 2018.

With 293 million shares outstanding when it goes public, Cloudflare would be valued at $2.9 billion and $3.5 billion. It could raise up to $420 million by selling an expected 35 million shares in its IPO.

Private investors showed a lot of love for both of these companies while they were private, but we’ll be watching this Thursday and Friday to see if the public markets return the favor.

Illustration: Li-Anne Dias.

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