U.S. IPO Week Ahead: Vroom Takes The Lead In A 3-IPO Week
Summary
- Following the busiest week yet for the 2020 IPO market, three IPOs plan to raise $431 million in the week ahead, led by online auto marketplace Vroom.
- Chinese mobile data marketplace uCloudlink plans to raise $50 million at a $581 million market cap.
- Oncology biotech Lantern Pharma plans to raise $25 million at a $108 million market cap as it repurposes old therapies.
Following the busiest week yet for the 2020 IPO market, three IPOs plan to raise $431 million in the week ahead, led by online auto marketplace Vroom (VRM).
After increasing its range on Friday, Vroom plans to raise $356 million at a $2.3 billion market cap. With $1.3 billion in annual sales, the fast-growing but unprofitable company has gained traction in the used car space, getting more than 947,000 average monthly visitors in the 1Q20 (+130% y/y). While Vroom has had to slash prices in the second quarter, its IPO comes as consumers increasingly look online to buy used cars. Close competitor and 2017 IPO Carvana (CVNA) is up roughly 12% year-to-date, rallying 270% from its March low.
Chinese mobile data marketplace uCloudlink (UCL) plans to raise $50 million at a $581 million market cap. The company's platforms allow users to access mobile data traffic shared by multiple network operators (MNOs). uCloudlink grew 36% in the 1Q20 with positive net income, but its gross margin declined 14 points to 35%.
Oncology biotech Lantern Pharma (LTRN) plans to raise $25 million at a $108 million market cap as it repurposes old therapies. Its in-licensed lead candidate previously failed five Phase 3 trials for non-small cell lung cancer (NSCLC) and breast cancer, and Lantern is focusing on an NSCLC subgroup it believes is promising.
U.S. IPO Calendar | |||
|---|---|---|---|
Issuer | Deal Size | Price Range | Top |
uCloudlink | $50M | $18 - $20.50 | I-Bankers |
Mobile data traffic sharing marketplace in China. | |||
Lantern Pharma | $25M | $15 - $17 | ThinkEquity |
Biotech redeveloping abandoned drugs for non-small cell lung cancer. | |||
Vroom | $300M | $15 - $17 | Goldman |
Online used car dealer operating throughout the US. | |||
A number of health care deals can launch in the week ahead, including pharmaceutical royalty acquirer Royalty Pharma (RPHA), which is on file for an estimated $2 billion IPO, and preclinical biotechs Generation Bio (GBIO), Avidity Biosciences (RNA), and Vaxcyte (PCVX). We're still waiting on launches from grocer Albertsons (ACI) and building products manufacturer AZEK (AZEK).
Street research is expected for and lock-up periods will be expiring for six companies.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. As of 6/4/20, the Renaissance IPO Index was up 22.0% year-to-date, while the S&P 500 was down 3.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Uber (UBER) and DocuSign (DOCU). The Renaissance International IPO Index was up 15.2% year-to-date, while the ACWX was down 10.2%. Renaissance Capital's International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Meituan-Dianping and Adyen.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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