Company / Analytics

Analytics, 10 December 2020

Airbnb, DoorDash and others going public this week

December is shaping up as a celebratory time for IPO investors. In addition to the highly anticipated Airbnb and DoorDash debuts, five other companies are expected to go public this week. Read more on these companies and what investors should expect.

Airbnb

Vacation rental company Airbnb is scheduled to go public on Thursday, December 10 under the Nasdaq ticker symbol ABNB.

Airbnb is selling 50 million shares at between $44 and $50 a share; at the midpoint, this would have raised $2.3 billion for the company and a market valuation upwards of $35 billion if its stock sells at the higher end of its range. That’s up from the $18 billion valuation earlier this year after the pandemic smashed its bookings, but only somewhat up from the $31 billion valuation it garnered in a funding round in 2017.

However, on Tuesday Airbnb raised the offering price of its IPO to a range of 56 to 60, giving the company a market valuation of about $42 billion. While its business has been hit hard by the pandemic, with sales dropping 72% year-over-year in Q2 2020, its year-over-year sales decline in Q3 2020 was just 18%, and it managed to turn a profit after major cost cuts.

In the fiscal year 2019, Gross booking revenue and company revenue were up 29% and 32% respectively year-over-year. The company saw gross booking revenue and company revenue fall 39% and 32% year-over-year respectively for the first nine months of 2020.

C3.ai Inc

Enterprise artificial intelligence company C3.ai Inc plans to sell 15.5 million shares at a price point of $31 to $34. It will use the NYSE symbol of AI. The IPO is expected for Wednesday, December 9.

The SaaS company says it has partnerships with Microsoft Corporation, Amazon, IBM, and Alphabet Inc. It projects a total addressable market of $271 billion by 2024.

C3.ai Inc saw revenue grow 71% year-over-year to $157 million for fiscal 2020. 86% of the company’s revenue came from subscriptions.

In the filing, C3.ai said its main competition is do-it-yourself platforms and that it is unaware of any end-to-end enterprise AI companies in direct competition.

Partner Baker Hughes Company BKH 1.35%, which helps C3.ai gain customers in the oil and gas industry, will own 12% of the company after the IPO.

Certara

Certara designs biosimulation software for the drug discovery and development market. With over 1,600 customers in 60 countries, the company saw revenue grow 27% year-over-year in 2019, to $208.5 million.

Certara is offering 24.4 million shares at a price point of $19 to $22 when it lists on the Nasdaq under the symbol CERT.

DoorDash

DoorDash is among the companies that have benefitted most from the shift to food delivery during the COVID-19 pandemic. DoorDash holds the number-one market share position in the food delivery market, with a share of 50% as of October 2020.

The company’s market share was 17% in January 2018. DoorDash competes with Uber Eats, owned by Uber Technologies, Grubhub Inc, and Postmates, which is merging with Uber Eats.

In 2019, DoorDash had a total transaction volume of $8 billion and 263 million orders placed. In the first nine months of 2020, 543 million orders were placed through DoorDash, including 236 million in the third quarter.

DoorDash had revenue of $1.9 billion for the first nine months of 2020, compared to $587 million in the same period the previous year. Fiscal 2019 revenue was $885 million.

The company initially planned to sell 33 million shares at a price point of $90 to $95, under the Nasdaq symbol DASH. However, like Airbnb DoorDash raised its IPO price to $102, raising $3.4 billion. That gives DoorDash a valuation of about $39 billion, based on the IPO price. Shares soared 77% to 180 as they started trading Wednesday.

Hydrofarm Holdings

Controlled environment agriculture company Hydrofarm Holdings plans to sell 8.7 million shares at a price point of $14 to $16, using the symbol HYFM on the Nasdaq.

The company sells products for hydroponic farming. Controlled environment agriculture refers to growing crops in places such as greenhouses, warehouses, rooftops, and vertical farms. It is popular with urban food entrepreneurs and cannabis growers because it requires less land and results in less runoff.

“Hydrofarm sits at the intersection of two of the most compelling market opportunities of our time,” the company said in its filing.

Hydrofarm had revenue of $308.5 million in the trailing twelve months ended Sept. 30. The company says it has grown revenue at a compounded annual growth rate of 16% from 2005 to 2019.

Hydrofarm said the U.S. cannabis segment is expected to grow at a 21% CAGR from $12.2 billion in 2019 to $31.1 billion in 2024.

Pubmatic

The cloud-based advertising company is set to go public this week with a 5.9 million offering at an expected price point of $16 to $18. It will list on the Nasdaq under the symbol PUBM.

Pubmatic competes in the global digital advertising market, which is expected to grow from $647 billion in 2019 to $841 billion by 2024.

According to filings, the company had revenue of $113.9 million in fiscal 2019 and $92.5 million in the first nine months of 2020. The company’s revenue over the last 12 months of $126.9 million was a 33% year-over-year improvement. Net income over the last 12 months was $11.9 million.

Pubmatic counts companies such as Verizon Communications, AMC Networks, News Corporation among its customers. Pubmatic serves both publishers and buyers and had over 1,100 customers in the third quarter.

Vivos Therapeutics

Vivos Therapeutics makes products to help people with sleep disorders, such as sleep apnea, and the company boasts two FDA approved medical devices. Vivos offers training and incentives to encourage dentists to become “ambassadors” for its products.

In 2019, the company had revenue of $11.4 million, up from $3.8 million in the prior year. Revenue came to $9.8 million for the first nine months of 2020.

The company is planning to offer 3.33 million ADS at a price point of $5 to $7. Vivos Therapeutics will list on the NYSE under the symbol VVOS.

Other companies

Other companies have not confirmed dates but could try to complete IPOs before the end of the year. These include fintech company Affirm which filed for an IPO that could occur before the end of 2020. Founded by Paypal co-founder Max Levchin, Affirm helps over 6,500 merchants and 6.2 million customers pay for goods online without a credit card.

The company had a gross merchandise volume of $4.6 billion in fiscal 2020, which was up 77% year-over-year. In the first quarter of the current fiscal year, Affirm had revenue of $174 million, which was up 98% year-over-year. The filing from Affirm did reveal that it receives 28% and 30% of its total revenue in fiscal 2020 and the first quarter of 2021, respectively, from its top merchant partner Peloton Interactive 5.46%.

In July, Affirm was rumored to be seeking a valuation of $10 billion and was considering the special purpose acquisition company route to market. The IPO terms have not yet been filed.

Mobile gaming company Roblox is planning n going public with an IPO that could occur before the end of 2020. China-based affordable goods company Wish, which competes with the likes of Amazon.com could also go public before the end of 2020.

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