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It’s direct listing day!
Palantir and Asana are set to test public markets today with the first set of direct listings since the start of the pandemic.
In a typical initial public offering process, companies have bankers supporting the share price through the first day of trading by strategically selling additional shares (or covering short positons) as needed. In the case of a direct listing, bankers still help price the listing, but don’t act as stabilisers and are paid lower fees.
Palantir and Asana are also, like their direct-listing predecessors Spotify and Slack, only selling shares held by existing shareholders.
With only two other companies that have gone public through a direct listing, data is scant on how businesses fare following the process—so Asana and Palantir will be heavily watched.
The New York Stock Exchange has pegged Palantir at $7.25 a share and Asana at $21 apiece. Those numbers are not the opening prices of the stock, but rather placeholders based on private-market trading, and act as jumping-off points. Both Spotify and Slack ended their first days of trading above their reference prices.
Asana and Palantir differ from their predecessors in key ways: Asana is the smallest of companies that have sought to go public via direct listing, and the least recognizable by name so far. At its reference price, Asana would be valued at $4 billion, while other direct-listing initiates were valued as decacorns prior to their debuts—testing the old adage that companies that go public via direct listing need to be a well-known brand. As for Palantir, its name is known but prone to controversy: Civil-rights groups have protested in the past against Palantir’s work with U.S. government agencies.
THE STATE OF DEALMAKING IN 2020: As September comes to a close, data analysis company Refinitiv has pulled together the stats on how dealmaking has fared through the third quarter of 2020. It’s a fascinating look:
- Globally, merger-and-acquisition activity surged up 80% in the third quarter from the quarter before, though that hasn’t been enough to make up for the dearth of deals in the first half of 2020. Activity year-to-date is down 21% to $2.2 trillion compared to the same three quarters a year earlier. In the U.S., dealmaking is up more than triple compared to the previous quarter, but down 43% for the year.
- That said, mega deals—those valued at over $5 billion—rebounded powerfully in the third quarter. Deals valued at over $5 billion jumped in those three months, valuing the deals at an aggregate of $455.7 billion, an all-time record.
- The industry with the most M&A? Technology, with deals around the world equaling $377.2 billion year-to-date. Dealmaking in the sector has risen 25% by aggregate value compared to the same period a year earlier. The planned $40 billion acquisition of chipmaker Arm by Nvidia leads the charge.
- Companies in the U.S. remain the most acquired and most acquisitive among their cohorts. Meanwhile, Chinese outbound acquisitions have accounted for just 3% of cross-border activity year-to-date.
All in all, even while direct listings seek to lower the overall fees paid to bankers, 2020 has been a bang-up year for the group as companies scurry not only to complete deals, but also raise funding through bond and equity sales.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Northvolt, a Sweden-based maker of lithium-ion batteries, raised $600 million in funding. Baillie Gifford, Goldman Sachs and Volkswagen led the round and were joined by Baron Capital Group, Bridfield Investments, and Daniel Ek (of Spotify). Read more.
- VTEX, a New York-based commerce-marketplace-OMS platform, raised $225 million in Series D funding, valuing it at $1.7 billion. Investors include Tiger Global, Lone Pine Capital, Constellation, Endeavour Catalyst, and SoftBank.
- Dewpoint Therapeutics, a Boston-based biomolecular condensates company, raised $77 million in a Series B funding. ARCH Venture Partners led the round and was joined by investors including Maverick Ventures, Bellco Capital, Leaps by Bayer, EcoR1 Capital, Polaris Partners, Samsara BioCapital, and Innovation Endeavors.
- KKday, a Taiwanese travel startup, raised $75 million in Series C funding. Cool Japan Fund and the National Development Fund led the round. Read more.
- BEGiN, a New York-based maker of early learning program HOMER, raised $50 million in Series C funding. Investors include LEGO Ventures, Sesame Workshop, 3One4 Capital, Trustbridge Partners and Interlock Partners.
- PayCargo, a Coral Gables, Fla.-based payments network for the supply chain industry, raised $35 million from Insight Partners.
- Axis Security, a San Mateo, Calif.-based company offering secure access to the cloud, raised $32 million in Series B funding. Canaan Partners led the round and was joined by investors including Ten Eleven Ventures and Cyberstarts.
- LogPoint, a Copenhagen-based cybersecurity company, raised $30 million in Series B funding. Digital+ Partners led the round and was joined by investors including Evolution Equity Partners.
- Sonoma Biotherapeutics, a company developing regulatory T-cell therapies for autoimmune and degenerative diseases,raised $30 million in Series A funding. Investors included Lyell Immunopharma, ARCH Venture Partners, 8VC, LifeForce Capital, Lilly Asia Ventures Biosciences, Octagon Capital, Alexandria Venture Investments, and the JDRF T1D Fund.
- Shiok Meats, a Singapore-based maker of cell-based shrimp, raised 12.6 million in Series A funding. Aqua-Spark led the round and was joined by investors including SEEDS Capital, Real Tech Fund, Irongrey, Yellowdog Empowers Fund, Ilshin Holdings, and Toyo Seikan Group Holdings.
- LARQ, a San Francisco-based maker of water purifiers, raised $10 million in Series A funding. Seventure led the round and was joined by investors including DCM, Capricorn Investment Group, NBA champion Draymond Green, Capricorn Investment Group, and Heuristic Capital.
- Siren, a San Francisco-based maker of smart textiles with remote patient monitoring, raised $9 million in additional Series B funding. Anathem Ventures led the round and was joined by investors including DCM, Khosla Ventures, 500 Startups and Founders Fund.
- Cube Dev, a San Francisco-based data platform, raised $6.2 million in seed funding. Bain Capital Ventures led the round and was joined by investors including Eniac Ventures, Betaworks, Innovation Endeavors, and Slack Fund.
- SISU, an Ireland and U.K.-based aesthetics clinic and e-commerce platform, raised $5.5 million in Series A funding. Greycroft and Bullpen Capital co-led the round and were joined by Mana Ventures, the Gaingels syndicate, Liam Casey (Founder & CEO of PCH), and Dan and Linda Kiely (co-founders of Voxpro).
- Buzzer, a New York-based mobile platform for live sports, raised $4 million in seed funding. Lerer Hippeau and Sapphire Sport led the round and were joined by investors including R&R Venture Partners and Imagination Capital.
- Intelage, a Seattle-based cloud-based global trade management and logistics platform, raised $3.5 million dollars in seed funding. Blumberg Capital led the round and was joined by investors including Vulcan Capital.
- Emjoy, a Barcelona-based audio-based sexual wellness startup, raised $3 million in a seed round led by JME Ventures, with existing investor Nauta Capital.
- Capitalize, a New York-based platform to transfer retirement assets, raised $2 million in seed funding. Bling Capital led the round and was joined by investors including Greycroft, RRE Ventures and Walkabout Ventures.
PRIVATE EQUITY
- Accel-KKR invested in Blue Mountain Quality Resources, a provider of asset management products for the life sciences industry. Financial terms weren't disclosed.
- Paycor backed by Apax Partners, acquired 7Geese, a Vancouver-based platform for employee performance management. Financial terms weren't disclosed.
- J-STAR acquired Dainichi, a Japanese aquaculture firm. Financial terms weren't disclosed.
OTHERS
- India is considering a sale of a 25% stake in Life Insurance Corp., the state’s largest life insurer. Read more.
- Caesars Entertainment won the £2.9 billion (about $3.7 billion) bid for William Hill, a U.K. gambling operator, beating Apollo.
- Mubadala Investment Co. is in advanced talks to invest up to $1 billion in the retail division of India's Reliance Industries Ltd RELI.NS, two sources told Reuters, as investor interest in the Indian company surges. Read more.
- Tencent plans to take Sogou Inc (NYSE: SOGO), a Chinese web search firm, private in a $3.5 billion deal. Read more.
EXITS
- MacAndrews & Forbes plans to sell RetainMeNot, an online coupon company, to J2 Global for around $420 million. Read more.
- Providence Service Corp (PRSC) acquired Simplura Health Group, a provider of non-medical personal care, for about $575 million from One Equity Partners.
- Snow Phipps acquired Prototek, a Boston-based maker of fabricated parts across both metal and plastic, from CORE Industrial Partners. Financial terms weren't disclosed.
IPOs
- Chindata Group Holdings, a Beijing-based data center operator, raised $540 million by offering 40 million ADSs at $13.50,. Bain Capital backs the firm. It posted revenue of $120.7 million 2019 and a loss of $24 million. It plans to list on the Nasdaq as “CD.” Read more.
- Yalla Group, a Dubai-based provider of a voice-centric social networking platform focused on the Middle East and North Africa, raised $140 million in an IPO. It posted revenue of $63.5 million and income of $28.9 million. SIG backs the firm. It plans to list on the NYSE as “YALA.” Read more.
SPACS
- AppHarvest, a Morehead, Ky.-based developer of indoor farms, agreed to go public via merger with Novus Capital Corp., a SPAC. Investors including Fidelity, Inclusive Capital, and Novus Capital Corp. have committed $375 via a PIPE transaction. The deal values the firm at $1 billion.
- Qell Acquisition, a blank check company targeting a sustainable tech business, raised $330 million. PIMCO is backing the SPAC.
- Climate Change Crisis Real Impact I Acquisition, a SPAC focused on climate technology, raised $200 million. David Crane, ex-CEO of NRG, leads the firm.
F+FS
- Silversmith Capital Partners closed Silversmith Capital Partners III with $880 million in commitments.
PEOPLE
- Forgepoint named Connie Qian as a senior associate and Leo Casusol as a venture partner.
