The biggest IPO since Alibaba. The most anticipated Silicon Valley IPO since Facebook. The largest IPO of 2019.
The hype is building as Uber tries to manage expectations. The ride-hailing behemoth now plans to price its public offering at or below the midpoint of its expected price range, which may value it at approximately $86 billion. (Remember when some bankers were floating a $120 billion valuation?) This number would still put Uber above its most recent private market valuation, which was $76 billion.
Fortune’s Adam Lashinsky wrote the following in Data Sheet this morning:
Journalists and their investment banker sources still love to hype the blessed event because, after all, it’s very good copy. The fact is that it’s tough to learn anything from an IPO. Sun Microsystems, Oracle, and Microsoft all had weak performance in the periods after their offerings. Facebook was a disaster. Even Google’s offering was something of a flop. It didn’t matter.
Now we watch Uber, a business that doesn’t make money and whose valuation lately has been going only in one direction. (Not up.) Is it a horrible company as a result? Is Lyft? Beats me.
Adam writes that before the first Internet bubble, IPOs were just … financing events. “Fledgling companies raised a small amount of venture capital, investments they got mostly based on the strength of their ideas, and then went public once they’d gained a certain level of maturity and needed more capital to grow,” he writes.
In 2019, however, things are different. Many businesses conducting IPOs are not profitable, and they have less of a need to raise funding. Rather, they go public to allow the founders and early shareholders to finally cash out & make a killing. Good news for them; not-so-great news for the small, retail investors buying shares in the public markets.
Just look at how Uber rival Lyft approached its first earnings call with investors. Lyft’s shares have fallen by nearly 27% from their IPO price, which exceeded the range the company was targeting during the roadshow. This week, Lyft’s CFO Brian Roberts said, “We anticipate that 2019 will be our peak loss year.” As one Term Sheet reader put it, “I always like to buy companies that are headed into their ‘peak loss year!’ Not sure who advises these guys, but you will need a better sales pitch than that.”
BILLION-DOLLAR RAZOR: Harry’s, the direct-to-consumer brand that creates men’s and women’s shaving products, has been acquired. Edgewell Personal Care Company (the struggling brand behind Schick razors) will pay $1.37 billion in stock and cash to buy the brand. The deal comes three years after Unilever acquired Harry’s competitor Dollar Shave Club for $1 billion.
• GoBear, a Singapore-based banking and insurance startup, raised $80 million in funding. Investors include Walvis Participaties and Aegon N.V.
• Health IQ, a Mountain View, Calif.-based quiz-based life insurance company, raised $55 million in Series D funding. Investors include Greenspring Associates, Aquiline Technology Growth, Hanwha Asset Management and Andreessen Horowitz.
• ArchiveSocial, a Durham, N.C.-based provider of social media archiving software for government agencies, law enforcement officials and K-12 school districts, raised $53 million in funding, from Level Equity.
• Coalition, a San Francisco-based cybersecurity insurance company, raised $40 million in funding. Ribbit Capital led the round, and was joined by investors including Greenoaks Capital and Hillhouse Capital.
• Heetch, a Paris-based ride-sharing platform, raised $38 million in Series B funding. Investors include Cathay Innovation, Total Ventures, Idinvest Partners, Innov’Allianz, Alven, Felix Capital, and Via-ID.
• Evident ID, an Atlanta-based online identity verification platform, raised $20 million in Series B funding. Aspect Ventures led the round, and was joined by investors including New Enterprise Associates, Blue Cloud Ventures and Internet Security Systems founder Tom Noonan.
• NUG, a California-based cannabis company, raised $15 million in Series A funding. The investors were not named.
• HeyJobs, a Germany-based talent acquisition platform, raised $12 million in Series A funding. Notion Capital led the round, and was joined by investors including Creathor Ventures, GFC and Heartcore Capital.
• Reali, a real estate technology company, raised $9 million in Series B2 funding. Group 11 (f.k.a SGVC) led the round, and was joined by investors including Zeev Ventures and Signia Ventures.
• Data Gumbo Corp, a Houston, Texas-based blockchain-as-a-service platform provider, raised $6 million in Series A funding. Saudi Aramco Energy Ventures led the round.
• LunaPBC, a La Jolla, Calif.-based provider of a genomic and health data platform, has raised $4.6 million in funding. Investors include ARCH Venture Partners, Bain Capital Ventures, F-Prime Capital, Illumina Ventures and Osage University Partners.
• Safeguard Global, an Austin, Texas-based provider of employment outsourcing services, raised funding of an undisclosed amount, from Accel-KKR.
HEALTH AND LIFE SCIENCES DEALS
• Confo Therapeutics, a Belgium-based emerging drug discovery company, raised $33.4 million in Series A funding. Investors include BioGeneration Ventures, Wellington Partners, Fund+, Perceptive Advisors, Capricorn Health-Tech Fund, Qbic, Participatie Maatschappij Vlaanderen NV and V-Bio Ventures.
PRIVATE EQUITY DEALS
• Fort Point Capital recapitalized AMS Fulfillment Holdings, a Valencia, Calif.-based provider of omnichannel fulfillment services. Financial terms weren't disclosed.
• The Hilb Group LLC, a portfolio company of Abry Partners, acquired Summit Insurance Services, a Moorefield, W.V.-based provider of employee benefits solutions. Financial terms weren't disclosed.
• Kahoot acquired DragonBox, a Norway-based startup that builds math apps, for $18 million in a combination of cash and shares.
• HeadHunter Group, a Russian online job recruitment platform, raised $220 million in an IPO of 16.3 million ADSs (100% insider) priced at $13.50. The firm posted revenue of $94.6 million and loss of $15.9 million in 2018. Elbrus Capital and Goldman Sachs are the sellers. Morgan Stanley, Goldman Sachs, Credit Suisse, VTB Capital, BofA Merrill Lynch, and Sberbank are the underwriters. It plans to list on the Nasdaq as “HHR.” Read more.
• GSX Techedu, a Beijing, China-based K-12 online tutoring platform, filed for a $220 million IPO. It posted revenue of $59.2 million in 2018 and loss of $2.9 million. Credit Suisse, Deutsche Bank, Barclays, and CLSA are underwriters. It plans to list on the NYSE as “GSX.” Read more.
• Mayville Engineering, a Mayville, Wi-based manufacturing services firm, raised $106 million in an IPO of 6.3 million shares priced at $17 apiece. GreatBanc Trust Company backs the firm. It plans to list on the NYSE as “MEC.” Read more.
• Milestone Pharmaceuticals, a Montreal-based biotech focused on heart rate conditions, raised $83 million in an IPO of 5.5 million shares priced at $15. RTW Investments (15.7%) and Novo Holdings (12.9%) backs the firm. It plans to list on the Nasdaq as “MIST.” Read more.
• Cortexyme, a South San Francisco, Calif.-based biotech creating Alzheimer’s disease therapies, raised $75 million in an IPO of 4.4 million shares priced at $17 apiece. Pfizer (14.7% pre-offering) backs the firm. It plans to list on the Nasdaq as “CRTX.” Read more.
• Axcella Health, a Cambridge, Mass.-based biotech firm focused in dysregulated metabolism, raised $71 million in an IPO of 3.6 million shares priced at $20 apiece. The firm has yet to post revenue, and reported a loss of $36 million in 2018. Flagship General Partners, Fidelity, and Nestlé Health Sciences back the firm. Goldman Sachs, J.P. Morgan, and SVB Leerink are underwriters. It plans to list on the Nasdaq as “AXLA.” Read more.
• Audax Private Equity acquired Chartis, a Chicago-based advisory firm for academic medical centers, integrated healthcare delivery networks, and hospitals. The seller was Riordan, Lewis & Haden | Equity Partners. Financial terms weren't disclosed.
FIRMS + FUNDS
• Commonfund Capital, a Wilton, Conn.-based global private capital solutions provider, raised $450 million for its second secondaries fund, Commonfund Capital Secondary Partners II.
• 2048 Ventures, an early-stage firm, raised $27 million for its first fund.
• Taylor Chapman joined SEI Ventures as a principal.