- Unrest in the global markets cast a shadow over the IPO market in the previous week.
- Australian biotech company, Benitec dropped 15% on IPO and closed at a discount to its ASX stock price.
- Samsung biotech arm is reportedly expected to go public this year.
- NBC Universal continues its new media investment with Buzzfeed following its earlier investment in Vox Media.
The IPO Recap
Welcome back to our Tech IPO News Weekly. Global economic turbulence lead by the Chinese meltdown and commodities crash sent the U.S. equity markets on another week of sharp corrections, pushing Dow Jones and S&P 500 down more than 6%. When markets are on the verge of entering a bear market, most companies prefer not to go public and to wait for a better time to go for an IPO. In the week of August 17, only one small IPO took place when Australian biotech company, Benitec Biopharma (NASDAQ:BNTC) raised $14M in a very disappointing IPO which saw its stock price drop by 15% and close at a 20% discount to the company’s stock price on the Australian Stock Exchange. In addition to Benitec’s securities listed on the Australian Stock Exchange, the company had a couple of ADRs traded in the US OTC markets under the symbols BNIKF and BTEBY. One of the IPOs targets was to replace the OTC ADRs (BTEBY is sponsored by the company, and BNIKF is unsponsored) with a newly listed ADR that will be traded in the primary Nasdaq market.
The Week Ahead: August 28
As the unrest in the global markets continues, there is no IPO due to hit the markets this week. In case there are any developments regarding this week’s IPO calendar, I will update it in the comments section below.
IPO Market Events
While markets plunge and tech stocks get the heat, two tech giants, Samsung Electronics (OTC:SSNLF) and Uber, consider IPO-ing one of their subsidiaries and igniting investors imagination. Samsung is reportedly planning to IPO its Biotech subsidiary, Samsung Bioepis Co., on the NASDAQ and allow U.S. investors first exposure to the South Korean giant not through an OTC-traded security but a primary market security. Even though the biotech firm is only partially owned by Samsung Electronics, going public in the U.S. is a significant step towards direct competition with the American biotech and pharmaceutical giants.
Uber, which recently completed a $1B funding round at a whopping $51B valuation, is rumored to consider listing its Chinese subsidiary on the Chinese stock exchange. Uber’s spokeswoman responded to a Bloomberg query on that: “Of course there is the possibility that Uber China, which is a separate entity, could at some point in the future list on the Chinese stock market, but as Travis [Kalanick, CEO] has always made clear, there are many advantages for investors to Uber being a private company, in particular having the freedom to take long-term bets.” Even though a chance for an Uber China IPO seems very low in the current economic situation in China, private and public equity investors fantasize about getting a glimpse into the company’s financials.
Private Market Developments
Unlike the public equity markets, the private equity markets had a very active week with a large number of higher than usual funding rounds. These are the exceptional and worth mentioning transactions:
- GrabTaxi – Uber’s rival in Southeast Asia, GrabTaxi raised $350M from leading Asian investment firms Softbank (OTC:SFTBY) and China Investment Corporation, as well as from two other leading giant firms, Tiger Global Management and Coatue Management. China Investment Corporation recently invested $2B in GrabTaxi’s competitor Didi Kuaidi, which led rumors of a possible merger between the two rivals.
- Buzzfeed – The social news company, Buzzfeed, raised $200M from Comcast’s (NASDAQ:CMCSA) NBC Universal. This is the second large investment from NBC Universal after the company invested another $200M in the digital media company, Vox Media. Buzzfeed was evaluated at $1.5B which is a 75% increase from the company’s $850M valuation in the previous series E round. A further analysis of NBC Universal’s investment will be available on Amigobulls, later this week.
- ZocDoc – The medical cloud service company, ZocDoc raised $130M from investment firms Atomico, Baillie Gifford, and Peter Thiel’s Founders Fund, with a $1.8B valuation. A further analysis of ZocDoc will be available on Amigobulls, later this week.