The fees that investment banks charge to secure IPOs can eat up several points of a publicly traded company’s gross revenue, but new competition is giving some companies a chance to hold onto more of that sweet debut cash.
This week, Nubank paid just 1.6% of the $2.6 billion it raised to its insurers. As Bloomberg reported, “of the 490 IPOs in the US so far this year, only three paid a smaller percentage.”
In this morning’s edition of The Exchange, Anna Heim and Alex Wilhelm compared Nubank’s savings to DoorDash, which was not set aside. each shares for insurers at the IPO of November 2020.
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They found several contributing factors, including increased global competition, the desire to attract more retail investors and, yes, SPACs.
This is undoubtedly “good news for startups”, as exchanges in different time zones offer more places for startups to list (or double-list) their shares, write Alex and Anna.
“Could it also be a sign of some of the changes we plan to follow in 2022?”
Tuesday 21 December I am free, but Friday 24 December we will come back with a very extensive newsletter. Thank you very much for reading and have a nice week.
Senior Editor, BestFitnessBands+
Dear Sophie: How to maneuver the latest travel bans, H-1B alternatives
The 2021 H-1B lottery process was quite the roller coaster!
We sponsored several people in the lottery this year. One of our registrants was selected in the first round in March, but none were selected in the second round in July.
We just found out that another of our registrants was selected in November; however, he is from South Africa and is not allowed to travel to the US due to ommicron.
What must we do? Any suggestions on what to do with our other potential contributors who were not selected?
— Enthusiastic employer
A few questions about the upcoming Reddit IPO
Founded 16 years ago, Reddit has raised $1.3 billion, giving the company a $10 billion valuation. This week, the user-generated community revealed that it had submitted confidentially to go public.
“You know what that means,” wrote Alex Wilhelm. “It’s time to ask questions.”
While awaiting his S-1 with a sharpened scalpel, Alex shared initial questions about the social hub’s activities, most notably:
“We’re curious about content moderation costs, product expansion, the company’s revenue mix, how often governments come forward in the filing, and what the unicorn has to say about crypto.”
How do you build a better rocket company? [Video]
In “New Kids on the Launch Block,” a panel at TC Sessions: Space 2021, Darrell Etherington spoke with three rocket makers to learn about the factors that make commercial space launches cheaper and more competitive:
- Lauren Lyons, COO, Firefly Aerospace
- Benjamin Lyon, Chief Engineer and EVP Engineering, Astra
- Max Haot, Founder and CEO, Launcher
“A common theme that quickly emerged was that vertical integration is a key driver of success in the rocket business and reduces costs, especially in smaller-capacity launch vehicles,” Darrell writes.
It’s time for investors to redefine how we evaluate digital health startups
A report from RockHealth.org found that 2021 was the best fundraising year yet for digital healthcare startups.
Fueled in large part by an explosion in mental health demand and the expansion of telecare during the pandemic, more investors are hunting founders who can significantly cut costs and create efficiencies in a notoriously dilapidated industry.
Regardless, “proving a financially backed ROI case requires a combination of time and data, and digital health is no exception,” writes Alyssa Jaffee, a partner at digital health-focused VC firm 7wireVentures.
Bold visions and solid fundamentals fuel investor interest in the space [Video]
The space industry is seeing unprecedented levels of private investment — and exits — as various companies scale their operations.
In a panel of TC Sessions: Space 2021 titled “Backing the Brightest,” Darrell Etherington looked at last year’s business and looked ahead to 2022 with three investors:
- Tess Hatch, partner, Bessemer Venture Partners
- Shaun Maguire, partner, Sequoia
- Lisa Rich, Managing Partner, Hemisphere Ventures
John de Souza from Ample on the merits of B2B, corporate culture and investors who understand
Launching a startup is inherently risky, but scaling a business to succeed where others have failed spectacularly is a very bold move.
San Francisco-based Ample partners with companies that manage EV fleets to swap its modular battery packs in and out of their vehicles.
“Fourteen years ago, Better Place raised nearly $1 billion to do what Ample does, and it was eventually declared bankrupt,” Rebecca Bellan reported.
In an in-depth interview with co-founder John de Souza, she asked about the company’s go-to-market strategy, culture, and why he’s confident Ample will succeed where others don’t.
“The economy and operations work very well because you don’t need a large number on a single station to break even. With a small fleet you would have it at a maximum of 20 cars and it will be break even. That’s what makes it so attractive. You don’t have to deploy the stations until you have a customer.”