U.S. IPO week report: Healthcare software leads IPO week with $1.3 billion, Novelis cancels IPO

Five IPOs debuted this week, raising more than $1.3 billion in proceeds, including one SPAC. One company that didn’t join the fray was an aluminum company. Novelis (NVL) called off its $878 million IPO. Last minute: Three IPOs and four SPACs filed their first filings last week.

Hospital Billing Platform Waster (Method) listed at the midpoint, raising $968 million at a market cap of $3.7 billion. Waystar provides cloud payment software for healthcare providers. The company currently serves approximately 30,000 customers representing approximately 1 million different healthcare providers operating in various healthcare settings. In 2023, Waystar facilitated over 5 billion healthcare payment transactions with a total billing value of over $1.2 trillion covering approximately 50% of U.S. patients. The company operates in a large market and has a dollar-based net retention ratio of 109%, but is highly leveraged. It closed down 4%.

Location sharing mobile app Life 360 (life) listed on Nasdaq, raising $155 million at a market cap of $2.3 billion. The company’s flagship product is the Life360 mobile app, which operates on a “freemium” model with features including communications, driving safety, digital safety and location sharing. The company’s products and services are system and platform agnostic. As of March 31, 2024, the Life360 platform had approximately 66.4 million MAUs and 1.9 million global paid groups (“Circles”). The company is also listed on the Australian Securities Exchange. Life360 closed up 1%.

Central Nervous System Disorders Biotechnology LaPorte Therapeutics (wrap) listed at mid-price, raising $136 million at a market cap of $633 million. The company’s most advanced drug candidate has completed Phase 1 trials in healthy adults and is expected to enter a Phase 2a proof-of-concept trial in drug-resistant focal epilepsy in mid-2024, with topline results expected in mid-2025. The company believes the drug candidate may also have potential as a treatment for peripheral neuropathic pain and bipolar disorder. The stock closed up 22%.

Israeli glass film manufacturer Gorgy (Gauz) undersized its IPO to raise $75 million at a market cap of $341 million. Gauzy offers a range of PDLC and SPD films that are laminated or retrofitted onto glass. The films can dim light or show a transparent display. Gauzy’s main end markets include the automotive, aerospace and construction sectors. The company grew revenue by 59% in 2023 but remains unprofitable with cash flow losses. Gauzy closed down 7%.

Electric bicycle shop FlyE Group (flyFlyee Group priced its scaled-back IPO at a low price to raise $9 million at a market cap of $97 million. The company sells motorcycle, e-bike and e-scooter products online and at retail stores in the United States and Canada. The company is profitable and growing fast, but competes with larger, more established companies. Flyee Group closed flat.

Blank check Seonghwa Acquisition II (Chev) has raised $75 million to fund businesses targeting or focused on the Asian market.

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Three IPOs filed their first applications last week: Phase 3-ready inflammation biotech Aluminum (ALMS) has filed for $100 million in funding. Respiratory Biomedical Canada’s BRTH, which is developing a breast cancer diagnostic device, has applied for $12 million in funding. China-based parking facility provider UEOPLE Technology (UEOP) applied for $9 million in funding.

Four SPACs also filed their initial filings last week. EQV Ventures Acquisition (EQVU) has filed to raise $350 million targeting the energy sector. Gig Capital 7 GIGGU, led by semiconductor industry veteran Avi Katz, has filed to raise $250 million in funding. M3 Brigade Acquisition V (MBAV.U) has filed to raise $250 million to focus on its North American energy business, led by turnaround veteran Mohsin Meghji. Acquisition of Rising Dragon (RDACU) has applied for $50 million in funding targeted at small and medium-sized businesses.

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Two big IPOs are scheduled for this week.

Precision Medicine Company Tempus AI (Electronic) is planning to raise $400 million at a market cap of $6.2 billion. The company offers the Tempus Platform, which includes proprietary software and data pipelines that enable the development of more personalized therapeutics. Tempus’ products, which have very low margins but are growing, are used by approximately 95% of the largest publicly traded pharmaceutical companies, and clinical next-generation sequencing volumes in oncology are expected to grow ninefold from 2018 to 2023.

Australian listed biotech Telix Pharmaceuticals (thank you) plans to raise $202 million at a market cap of $4.2 billion. Telix is ​​focused on the development and commercialization of therapeutic and diagnostic radiopharmaceuticals and has a pipeline of candidates across a range of oncology indications. Its flagship product, Illuccix, is a marketed prostate cancer imaging agent that has generated sales of approximately $550 million since its launch in April 2022.

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Street research is expected on four companies over the next week, with one lockup period due to expire.

IPO Market Snapshot

The Renaissance IPO Index is a market-cap weighted basket of newly listed companies. As of June 6, 2024, the Renaissance IPO Index has increased 6.5% year-to-date, while the S&P 500 has increased 12.9%. Renaissance Capital’s IPO ETF (Initial public offering) tracks the index, and the ETF’s main holdings include Kenview (Queved) and New Holdings (newThe Renaissance International IPO Index is down 0.8% so far this year, while the ACWX is up 7.6%.Initial public offering) tracks the index, and some of the ETF’s key holdings include Wise and Porsche.

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Editor’s note: The summary bullet points for this article were selected by Seeking Alpha editors.