Challenging conditions in the IPO market continued this past week, with only one IPO and two SPACs pricing. The pipeline was slightly more active, with a number of small IPOs and a few SPACs submitting initial filings.
Connectivity solutions provider Credo Technology (CRDO) downsized and priced at the low end to raise $200 million at a $1.5 billion market cap. Founded by three former Marvell employees, Credo Technology provides semiconductor solutions for optical and electrical Ethernet applications. Despite being highly reliant on large customers with volatile order patterns, the company saw triple-digit product revenue growth in FY1H22.
Two SPACs went public this week, led by Latin American-focused LatAmGrowth SPAC (LATGU), which raised $130 million. This week, we published a note on the sharp uptick in SPAC withdrawals.
|3 IPOs During the Week of January 24th, 2022|
|IssuerBusiness||DealSize||Market Cap at IPO||Price vs.Midpoint||First DayReturn||Returnat 01/28|
|Credo Technology (CRDO)||$200M||$1,545M||-9%||+17%||+12%|
|Provides semiconductor solutions for optical and electrical Ethernet applications.|
|LatAmGrowth SPAC (LATGU)||$130M||$163M||0%||+0%||+0%|
|Blank check company targeting high growth businesses in Latin America.|
|Keyarch Acquisition (KYCHU)||$100M||$132M||0%||-1%||+0%|
|Blank check company targeting disruptive technology and innovative services.|
Six IPOs submitted initial filings this week, all raising less than $100 million. “Zero trust” cybersecurity firm Appgate (OTCPK:APGT) led the way, filing to raise $75 million in an uplisting. Eleison Pharmaceuticals (ELSN), a Phase 3 biotech firm developing cancer therapies, filed to raise $42 million. Beijing-based business services firm U-BX Technology (UBXG) filed to raise $30 million.
Three SPACs submitted initial filings. Sound Point Acquisition I (SPCMU), targeting credit markets, filed to raise $200 million. Agtech-focused AXIOS Sustainable Growth Acquisition (AXACU) filed to raise $125 million. Lakeshore Acquisition II (LBBBU) filed to raise $60 million, in Bill Chen’s second SPAC after Lakeshore I (LAAAU).
|9 Filings During the Week of January 24th, 2022|
|Cybersecurity firm offering Zero Trust authentication services.|
|Lakeshore Acquisition II (LBBBU)||$60M||SPAC||Network 1|
|Second blank check company formed by the CEO of Shanghai Renaissance Investment Management.|
|Loop Media (OTCPK:LPTV)||$12M||Technology||Roth Cap.|
|Provides a multichannel digital video media platform to OOH and third-party advertisers.|
|U-BX Technology (UBXG)||$30M||Technology||Boustead|
|Provides a variety of services to insurance companies in China.|
|Yi Po International (YBZN)||$27M||Real Estate||Boustead|
|Operates parking lots and provides parking lot equipment in China.|
|Li Bang (LBGJ)||$18M||Consumer Discretionary||Univest Sec.|
|Chinese commercial kitchen equipment producer.|
|AXIOS Sustainable Growth (AXACU)||$125M||SPAC||I-Bankers|
|Blank check company targeting agriculture-related technology firms in Eastern Europe.|
|Sound Point Acquisition I (SPCMU)||$200M||SPAC||BofA|
|Blank check company formed by Sound Point targeting the credit markets.|
|Eleison Pharmaceuticals (ELSN)||$42M||Health Care||ThinkEquity|
|Phase 3 biotech developing in-licensed therapies for cancer.|
IPO Market Snapshot
The Renaissance IPO Indices are market cap-weighted baskets of newly public companies. As of 1/27/22, the Renaissance IPO Index was down 28.3% year-to-date, while the S&P 500 was down 9.2%. Renaissance Capital’s IPO ETF (IPO) tracks the index, and top ETF holdings include Uber Technologies (UBER) and Snowflake (SNOW). The Renaissance International IPO Index was down 13.1% year-to-date, while the ACWX was down 4.8%. Renaissance Capital’s International IPO ETF (IPOS) tracks the index, and top ETF holdings include Volvo Car Group and Zhejiang Kuaishou Information Technology.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.