Stock trading app Robinhood went public on Thursday, and it was not a good start for the company.
Shares of the company priced at $38 apiece, but now trade at around $34 amid concerns from investors around its regulatory risks and unconventional initial public offering.
And while early investors in the now $29 billion company did quite well—the company was last valued at $12 billion or so in October—retail traders on the platform that were promised up to 35% of the offering are now underwater, as are the excited investors that bought shares priced at around $55 in June via secondaries trading dealer, Rainmaker Securities. That valued the company at about $45 billion, says Rainmaker’s Greg Martin.
If you are a bull in the company, you might argue that the first-day IPO pop does not correlate with the long-term success of the company. And you’re right. The debuts of tech giants Facebook and Google (now known as Alphabet) after all were disasters. Now look where they are now. Still for Robinhood, there’s an added layer of “this is not very good”—its IPO also doubled as marketing for its mission to “democratize finance.” And unfortunately on its debut, it lost wealth for the retail traders instead of adding to it.
Regardless, it remains true that the first day is not the entirety of the company’s future. And at least in the near-term, there are a few dates to watch as this stock, which many are expecting to be highly volatile, continues in public markets. Typically, in a bid to steady trading for a nascent, public company, an IPO bars investors from selling shares for six months after the debut. Following in the footsteps of companies like Airbnb and data-warehousing business Snowflake, Robinhood shook up its lock-up period: Employees were able to sell 15% of their shares immediately after the IPO, and can sell another 15% three months later. That October 28 expiration could give some indication about how insiders and employees feel about the company’s future.
While it’s unclear how many shares exactly went to retail traders on Robinhood’s platform, the company also discourages users from selling the stock immediately. Traders are by no means barred from selling the stock, but they do risk losing the ability to invest in other IPOs for 60 days if they sell shares within a 30 day period. Which effectively sets up a soft lock-up on those shares, to end in late June.
And finally, IPOs are subject to a quiet period during which insiders are limited in what they can say to the public. When it ends however, the banks that underwrote the IPO—and the company’s greatest cheerleaders—typically come out with analyst notes promoting the stock. While the event is largely predictable, there are extreme examples of banks diverging from the fold: Under heavy scrutiny from the government, Chinese ride-hailing giant, DiDi, saw none of its underwriters come to bat when its lockup period expired earlier this month. For Robinhood, its quiet period is expected to end on Sept. 7.
DEFI-ING GRAVITY: Fortune’s most recent magazine issue is exploring all things crypto—including how this burst of interest in the space can outlast the hype. Read it here.
Jessica Mathews compiled the IPO and SPAC sections of this newsletter.
– Trendyol, a Turkish e-commerce company backed by Alibaba, is reportedly in talks to raise $1.5 billion at a $16.5 billion valuation with General Atlantic, per Bloomberg.
– Gopuff, a Philadelphia-based delivery company, confirmed it raised $1 billion in Series H funding valuing it at $15 billion. Investors included Blackstone’s Horizons platform, Guggenheim Investments, Hedosophia, and Adage Capital.
– Oyo, the Indian hotel chain, is in talks with Microsoft to raise at a $9 billion valuation, per TechCrunch.
– Ramp, a New York City-based corporate card startup, is in talks to raise at a $3.8 billion valuation, per the Information. Founders Fund is set to lead.
– VNLIFE Corporation Joint Stock Company, a Vietnamese banking tech business, raised over $250 million in Series B funding. Dragoneer Investment Group and General Atlantic led the round and were joined by investors including PayPal Ventures and EDBI.
– Bota Bio, a San Francisco-based biomanufacturing company, raised $100 million in Series B funding. Sequoia Capital China led the round and was joined by investors including Matrix Partners China, Source Code Capital, Sherpa Healthcare Partners, and 5Y Capital.
– La Haus, a Mexico City-based home buying marketplace, raised $50 million in Series B funding. Acrew Capital and Renegade Partners led the round.
– Merqueo, a Latin American delivery business, raised $50 million in Series C funding. IDC Ventures, Digital Bridge, and IDB Invest led the round.
– Varda Space Industries, a California-based space startup, raised $42 million in Series A funding. Khosla Ventures and Caffeinated Capital led the round and were joined by investors including Lux Capital, General Catalyst, and Founders Fund.
– Vauld, a Singapore-based crypto trading and borrowing platform, raised $25 million in Series A funding. Valar Ventures led the round and was joined by investors including Pantera Capital, Coinbase Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, and Cadenza Capital.
– Talkiatry, a New York City-based psychiatry service, raised $20 million in Series A funding. Left Lane Capital led the round and was joined by investors including Sikwoo Capital Partners and Relevance Ventures.
– Everactive, a Santa Clara, Calif.-based maker of battery-free, industrial monitoring solutions, raised $16 million from 3M.
– Tenderly, a Serbian Ethereum developer platform, raised $15.3 million in Series A funding. Accel led the round and was joined by investors including Point Nine Capital and Version One Ventures.
– ConverseNow, an Austin-based voice technology maker for restaurants, raised $15 million in Series A funding. Craft Ventures led the round and was joined by investors including LiveOak Venture Partners, Tensility Venture Partners, Knoll Ventures, Bala Investments, 2048 Ventures, and Bridge Investments.
– Talview, a San Mateo, Calif.-based hiring tech company, raised $15 million in Series B funding. Eileses Capital led the round and was joined by investors including Storm Ventures, Inventus Capital, and Emergent Ventures.
– The New Primal, a Charleston, S.C.-based maker of meat snacks, raised $15 million in Series B funding. Manna Tree led the round.
– Diginex, a Singapore-based blockchain company focused on ESG, raised $6 million in Series A funding. Fitch Ventures led the round.
– HiHello, a Palo Alto, Calif.-based business card platform for individuals and businesses, raised $7.5 million in Series A funding. Foundry Group led the round and was joined by investors including Lux Capital and August Capital.
– Prepaid2Cash, a Birmingham, Ala.-based gift and prepaid card redemption company, raised $5.1 million in Series A funding. Benson Capital Partners led the round and was joined by investors including Relevance Ventures and Alabama Futures Fund.
– Oova, a New York City-based fertility company, raised $4.4 million. Investors included BBG Ventures, Company Ventures, David Sable from Special Situations Life Sciences Fund, Thorne Healthtech, and Amplifyher Ventures.
– Hello Divorce, an Oakland, Calif.-based divorce tech startup, raised $2 million in seed funding. CEAS led the round and was joined by investors including Lightbank, Northwestern Mutual Future Ventures, and Gaingels.
Paxos, a New York City-based blockchain company, added Bank of America, FTX, Coinbase Ventures, and Founders Fund to its previously announced $300 million Series D round.
– Iress, an Australian software provider, rejected a bid from EQT valuing it at A$3 billion ($2.2 billion).
– Apollo Global Management agreed to invest $200 million in FirstDigital Telecom, a Salt Lake City-headquartered, fiber-based carrier.
– Oaktree Capital Management acquired a minority stake in Galway Sustainable Capital, a Washington D.C.-based firm investing in environmental sustainability-focused companies.
– BDT Capital Partners agreed to invest in Universal Engineering Services, an engineering and consulting company. Financial terms weren’t disclosed.
– Great Hill Partners recapitalized Labor First, a Mount Laurel Township, N.J.-based provider of group retiree Medicare benefit management solutions. Financial terms weren’t disclosed.
– Prelude Growth Partners invested in Fly By Jing, a Los Angeles-based Asian food brand. Financial terms weren’t disclosed.
– Serent Capital invested in First Due, a New York-based provider of records and operations management software for emergency response agencies. Financial terms weren’t disclosed.
– WM Partners acquired Vega, a Canadian plant-based protein powder maker. Financial terms weren’t disclosed.
– WellSky, backed by TPG, agreed to acquire Healthify, a Overland, Ks.-based company connecting healthcare organizations with social service organizations. Financial terms weren’t disclosed.
– Summit Partners invested €180 million in Odoo, a Belgium-based business software company. Sofinnova Partners and XAnge exited.
– Hill-Rom Holdings, a medical equipment maker, rejected a $9.6 billion takeover offer from Baxter International, per Bloomberg.
– SoftBank Group is selling $2.1 billion of its stake in Uber Technologies, the U.S.-based ride-hailing company, per CNBC. The deal comes as SoftBank’s stake in Chinese ride-hailing company Didi falls in value.
– Fosun will make a minority investment in Evil Geniuses, a Seattle-based esports organizations, valuing it at $255 million post-investment.
– Krafton, a South Korean game developer, priced its IPO to raise 4.3 trillion won ($3.8 billion).
– Dole Plc, an Ireland-based fruit production company, raised $400 million in an offering of 20 million shares priced at $16 per share—it had previously planned to offer 30.3 million shares. The company posted $9 billion in revenue in 2020 and reported net income of $100 million.
– RxSight, an Aliso Viejo, Calif.-based intraocular lens company, raised 117.6 million in an offering of 7.4 million shares priced at $16 per share—at the low end of its price range. The company reported $14.7 million in sales in 2020 and a gross profit of $1.7 million. Longitude Capital and H.I.G. BioHealth Partners back the firm.
– Omega Therapeutics, a Cambridge, Mass.-based development-stage biotechnology company, raised $125.8 million in an offering of 7.4 million shares priced at $17 per share—in the middle of its price range. The company reported a loss of $29.4 million in 2020 and has yet to post revenue. Flagship Pioneering and Fidelity Investments back the firm.
– Immuneering Corporation, a Cambridge, Mass.-based drug discovery company, raised $112.5 in an offering of 7.5 million shares priced at $15 per share—it had previously planned to raise up to $112 million. The company generated $2.3 million in revenue in 2020 and reported a loss of $17.1 million. Cormorant Asset Management, Surveyor Capital, Rock Springs Capital, and T. Rowe Price back the firm.
– Tenaya Therapeutics, a South San Francisco-based heart disease treatment company, raised $180 million in an offering of 12 million shares priced at $15 per share—it had previously planned to offer 10 million shares. The company reported a $38.9 million loss in 2020 and has yet to post revenue. The Column Group, Casdin Capital and Fidelity Investments back the firm.
– Manscaped, a San Diego-based men’s groin grooming company, is in talks to go public via a merger with Bright Lights Acquisition Corp., a SPAC, per Bloomberg.