Although it’s a truncated holiday week here in the United States, there’s been a bushel of IPO news. This morning, we’re going to sort through the updates and come up with a series of sentiment calls regarding these public offerings.
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Here’s what’s in our basket of news items this morning:
- Marqeta‘s first IPO price range (fintech).
- 1st Dibs‘ first IPO price range (e-commerce).
- Zeta Global‘s IPO pricing (martech).
- The start of SoFi trading post-SPAC (fintech).
- The latest from BarkBox (e-commerce).
A brief note on why we care to do all this work:
We care because it’s worth knowing what current demand is for venture-backed shares on the public markets. The third quarter is expected by many in the private markets to be an active period for exits. So, for founders, investors, and a host of technology startup employees, we’re gearing up for a busy period.
And today’s IPO climate could be the on-ramp to that rush of unicorn liquidity. So let’s understand where we’re starting through the prism of debut updates en masse.
Marqeta
- First IPO price range: $20 to $24 per share.
- Max IPO raise: $1,254,545,448.
- Implied simple valuation range: $10.6 billion to $12.7 billion.
The last known private-market value of Marqeta was set in May 2020, when the company raised $150 million at what PitchBook estimates was a $4.3 billion valuation. From that perspective, the company could up to triple its final private valuation in its public debut. There was some other money sloshing around the company since that May round, however, so its pricing could have shifted some in the intervening months.
Our read is that even if Marqeta does not raise its IPO range, its pricing is bullish, and if it does raise its range, it could become even more so. At a flat $12 billion price, the company’s Q1 2021 run rate puts it on a 27.8x revenue multiple. That’s rich.
1st Dibs
- First IPO price range: $18 to $21 per share.
- Max IPO raise: $138,862,500.
- Implied simple valuation range: $658.7 million to $768.5 million.
PitchBook data show that 1st Dibs last raised in February 2019 at a post-money valuation of $519.8 million. That makes the company’s possible valuation gain from its IPO somewhat modest, given how markets have performed since the company was last valued.
Our read is that if 1st Dibs does not raise its IPO range, its pricing is modestly bearish. The company was on just over a $100 million run rate in its most recent quarter. With gross margins north of 70% and 42% growth, it feels cheaply priced at around the $700 million mark. However, if 1st Dibs raises its range, things could look different, and quickly.
Zeta Global
- First IPO price range: $10 to $12.
- Max IPO raise: $313,636,356.
- Implied simple valuation range: $1.92 billion to $2.3 billion.
The last known valuation we have for Zeta Global is its 2017-era PE round, which valued the company at around $1.3 billion, per PitchBook data. The company did raise mezzanine capital since then and today.
Our read is that the Zeta Global IPO pricing is neutral. The company may raise its range, but by currently fetching a maximum simple valuation multiple of around 5.7x, Zeta is being valued like the slower-growing, increasingly unprofitable company that it is.
SoFi and BarkBox
Finally, shares of SPAC-led debut SoFi, an American consumer fintech company, rose during its first day of combined trading yesterday. The 12% gain on the day was strong. Of course, we have very, very little data to work with, but SoFi’s first day of trading was more than fine. It was bullish.
Then there’s BarkBox, which begins trading today after closing its SPAC-led flotation yesterday. As I write to you this morning, it has yet to begin trading.
Sum all that up for me
The Marqeta IPO pricing is hot because the underlying asset is hot. If it raises its range, 1st Dibs could indicate a generally warm IPO climate. As priced, it’s a bit of a soft launch. Zeta’s early pricing is neutral, and SoFi was bullish. That nets out to a generally positive picture of the IPO market for venture-backed companies today.
That’s good news for more than just SPAC combinations that are in the process of being digested — Latch and Hippo, for example — and companies that are in the process of going public (Robinhood is the canonical example at the moment) or those that are testing the waters ahead of taking the plunge.
All this means that we’ll be busy, you and I!
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