For the second week in a row, the would-be first IPO of 2016 delayed its offering.
This time around, it was Elevate Credit (NYSE:ELVT) that postponed, citing market conditions.
Public-private disconnect in online lending
Elevate postponed its planned $76 million IPO this week, a reflection of poor broader market sentiment and especially poor trading in public peers OnDeck (NYSE:ONDK), LendingClub (NYSE:LC) and OneMain Holdings (NYSE:OMF), all down more than 20% YTD. Elevate was coming to market similarly valued to loanDepot (NYSE:LDI), whose IPO was postponed in November with the CEO citing valuation pressure as a key driver. While Elevate could still price next week, it seems they will need to rein in valuation.
Meanwhile in the private markets, online lenders raised over $300 million this week, representing over 4x Elevate's proposed offering. Beijing, China-based WeLab raised $160 million and San Francisco, CA-based LendUp raised $150 million. Also, Chinese lender Lufax, a competitor to December 2015 IPO Yirendai ((NYSE:YRD); -26%), confirmed its latest financing round that raised $1.2 billion at an $18.5 billion valuation, up from $10 billion just nine months ago.
Three biotechs set terms, two submit fillings
Large-cap Chinese immuno-therapy developer Beigene (NASDAQ:BGNE) set terms to raise $127 million, delayed-release aspirin developer PLx Pharma (Pending:PLXP) set terms to raise $68 million and enhanced generics developer Mapi-Pharma (NASDAQ:MAPI) set terms to raise $50 million. Special purpose acquisition company KLR Energy Acquisition (NASDAQ:KLREU) filed to raise $130 million to acquire US oil and gas E&Ps and Phoenix, AZ-based water and wastewater utility operator Global Water Resources (NASDAQ:GWRS) filed to raise $6 million.
With no successful pricings this year, and only two IPOs on the calendar next week, this could be the first January since 2009 that does not see an IPO if the postponements continue.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 13% year-to-date, compared to -7% for the S&P 500. Renaissance Capital's US IPO ETF (NYSEARCA:IPO) tracks the index, and top ETF holdings include Synchrony Financial (NYSE:SYF), Alibaba (NYSE:BABA) and Citizens Financial Group (NYSE:CFG). The Renaissance International IPO Index is down 4.1% year-to-date, compared to -8% for ACWX. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include NN Group and Recruit Holdings.