Previewing This Week's IPOs

The December IPO finale is finally here. This week's repertoire includes six IPOs and two SPACs altogether expecting to raise $7.2 billion. Airbnb, Inc. ABNB and DoorDash Inc DASH will be leading the way, with Airbnb planning to raise $2.44 billion from the sale of its Class A stock, and Doordash going for $3.1 billion.

Airbnb

By being responsible for over 327 million bookings in 2019, this home-sharing start-up company is the market leader when it comes to short-term rentals. Even with many canceled bookings and much lower interest than before the pandemic, Airbnb managed to rebound from COVID-19 and show positive free cash flow. Airbnb's investors include Sequoia Capital, Silver Lake, Founders Fund, Greystar Real Estate, Sixth Street, DST Global, and Accel. The company has raised a total of $5.8 billion.

DoorDash

DoorDash already raised $2.26 billion from SVF Fast, Sequoia Capital, and Greenview Investment. This delivery service giant counts over 390,000 merchants, over 18 million users, and 1 million ‘Dasher' delivery persons. New users are acquired through online marketing and word of mouth recommendations. The company's strategy to have high expenses in sales and marketing departments finally resulted in generating a sharp increase in revenues. This efficiency rate is calculated as the amount of additional revenue is generated from one dollar of expenses in sales and marketing. This ratio has doubled to 2.2x in the latest reporting period. Even before the pandemic, restaurant digital orders have been steadily growing 23% annually (on average) since 2013. The COVID-19 pandemic has just accelerated this trend.

C3.ai

C3.ai AI, an AI software provider for accelerating digital transformation, plans to raise $504 million in its IPO, at a $4.3 billion market cap. The company's focus is on predictive maintenance, inventory optimization, energy management, customer relationship management, precision health, and anti-money laundering, which all result in a learning software that aims to help businesses make better decisions. The company's latest financials can be summarized as a growing revenue with a decelerated growth rate, high levels of gross profit with uneven gross margin, reduced operating losses, and a glimpse of positive cash flow seen in operations.

Certara

Certara CERT is a leader in biosimulation helping to reduce cycle times, lower costs, and improve outcomes for patients, during the drug discovery and development processes. The company has 1,600 clients across 60 countries, including global biopharmaceutical companies, academic institutions, and regulatory agencies. Certara plans to raise $500 million in its IPO at a $3.1 billion market cap.

Hydrofarm Holdings Group

Hydrofarm Holdings Group, Inc. HYFM, a supplier of hydroponics products like lighting equipment, climate control devices, garden accessories, and other related products, plans to raise $130 million in its IPO, at a $520 million market cap. The company manufactures and distributes stated products through its subsidiaries, and it serves customers in the U.S. and Canada, with a focus on the cannabis industry. The company reported both profit and accelerated growth during the first nine months of the year.

PubMatic

Last but not least, an AdTech platform PubMatic, Inc. PUBM is also joining the public market as it plans to raise $100 million. The market cap is $953 million. The company specializes in the development and implementation of online advertising software and strategies. The company's platform provides real-time programmatic transactions for the advertising and digital publishing industry.

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