The IPO train continues to gain momentum with two more venture-backed companies going public and shares of all eight new issues increasing in value. According to Ben Lerer, a managing director at early-stage investor Lerer Hippeau, the market’s resilience despite recent challenges has led him to feel optimistic.
As of May, US IPO volume was double that of the previous two years, with 141 IPOs completed on US exchanges in the first five months of this year. This week’s new offerings came from Voyager Technologies and Chime Financial, both VC-backed companies.
Voyager priced at $31 above its range and closed at $56.48 on its first day of trading. Chime priced at $27 above its expected price and began trading on Thursday, ending the day at $37.11. The two companies join the total number of VC-backed IPOs this year to eight, with all eight trading above their IPO prices as of Thursday.
The surge in VC-backed IPOs is attributed to a strong public market appetite for these types of companies. Circle Internet Group and Coreweave have performed exceptionally well, gaining 272% and 305%, respectively, since their debut. The other six VC-backed companies that made it out this year include eToro Group, Hinge Health, MNTN, Omada Health, Airtable, Cerebras Systems, Discord, Figma, Harry’s, Neo4j, and Netskope.
Lawyer Michael Blankenship describes himself as “bullish on the IPO market,” citing a high number of confidentially submitted filings for exchanges. He expects to see more companies register this year, with valuations, management, and team readiness preparing them for an IPO. Last year’s stock issuance through IPOs in the US was around $30 billion, and if this year’s issuance is flat or better, it could reach $25 billion to $40 billion on a year-over-year basis.
Source: https://www.venturecapitaljournal.com/all-aboard