The IPO market is coming off its best week in recent memory.
Nine companies went public during the week of July 22 raising nearly $6 billion, according to Renaissance Capital. (In the second quarter, there were just 39 IPOs, which raised a combined $8.9 billion.)
Stocks of five of the nine companies that went public last week increased by the end of the week, two were flat, and two were in the red.
Hedge funds and others with stakes in private companies need a healthy IPO market to monetize earlier investments. A thriving IPO market could also ramp up demand for new private investments.
By far the top performer last week was OneStream, which provides enterprise software for financial management and reporting. OneStream’s stock was up 40 percent in its first four days of trading.
“The company has posted substantial revenue growth lately, driven by higher margin subscription revenue,” Renaissance pointed out in a report on its website. “Despite this, it remains slightly unprofitable on an EBITDA basis.”
It was an unusual IPO since the company didn’t sell all of the shares in the offering. Rather, shareholders sold roughly one-quarter of the 24.5 million shares that were offered. The IPO was priced at $20 apiece, above the anticipated range of $17 to $19.
OneStream was also the only company among the group that previously attracted high profile hedge funds and other major investors.
The company is backed by private equity giant KKR, which has voting control even after the offering.
In 2021, D1 Capital Partners led a $200 million Series B financing round with participation from Tiger Global Management, according to a press release at the time.
It is not known whether D1 and Tiger Global are still in the stock.
The two Tiger-related hedge fund firms are not named in the regulatory filing detailing the IPO as holders of more than 5 percent of the shares or as a selling shareholder.
The second best performers among the companies that went public last week were OrangeKloud Technology, a Singapore-based provider of software development services, and Primega Group, which provides transportation services to the construction industry in Hong Kong. Each of their stocks was up a little more than 16 percent.
Cold storage giant Lineage was up more than 6 percent. Lineage’s offering last week was the largest so far this year raising $4.4 billion.
The only clunker in the group was BloomZ, the Japanese audio production company, which dropped about 31 percent by the end of the week.
This week Renaissance only expects two companies to go public.
One of them, Actuate Therapeutics, sharply cut the size of its offering.
The company plans to sell 2.95 million shares for between $8 and $10 per share, according to its most recent filing.
In June Institutional Investor reported that the clinical-stage biopharmaceuticals company, was planning to offer about 5.6 million shares of common stock for between $8 and $10 per share.
Two venture capital firms own a majority of the shares: Bios Partners is the largest shareholder, with 55 percent, and Kairos Ventures owns 17 percent.