IPO Market Analysis: What Recent Listings Reveal

Marqeta and Monday.com IPO Pricing Analysis

This report details the final initial public offering (IPO) prices established by two prominent fintech and enterprise productivity companies: Marqeta and Monday.com. Initial indications suggest positive outcomes for both listings.

Please note a brief scheduling update: The Exchange will be on hiatus next week. This pause is to allow for personal time dedicated to leisure activities. Regular publication will resume the following week.

IPO Market Overview

The Exchange focuses on startups, market trends, and financial matters. It is published daily on Extra Crunch and available via a weekly newsletter.

This week has been particularly active in the IPO market, with Marqeta, Monday.com, Zeta Global, and 1stDibs all making their public debuts. While all four are noteworthy, our analysis will primarily concentrate on Marqeta and Monday.com.

Final IPO Pricing and Valuation

We will examine the final pricing of each IPO, comparing it against the previously established valuation range. This comparison will allow us to draw inferences regarding the current state of the unicorn liquidity cycle.

The IPO landscape is constantly evolving, necessitating frequent reassessment of market perspectives. Given the rapid pace of activity, maintaining up-to-date knowledge is crucial.

Previous analyses may have been overly cautious, requiring a review and adjustment of our prior assessments. It’s important to remain flexible in our understanding of the market.

Key Takeaways

• Marqeta and Monday.com both achieved successful IPOs.
• The current IPO market requires continuous monitoring due to its dynamic nature.
• Prior market analyses are subject to revision based on recent developments.

The Significance of Initial Public Offering (IPO) Pricing

The importance of IPO pricing often prompts discussion. Recent IPOs from companies like DoorDash and Airbnb demonstrate that a company’s opening market value can significantly deviate from initial banker estimations.

It’s crucial to remember two key points. Firstly, the IPO price establishes the terms for the company’s capital raise; IPOs frequently function as a final private funding round, making the price a critical factor in dilution. Secondly, many recent high-profile IPOs have experienced a retraction of their initial gains, thus highlighting the relevance of the original IPO price.

For instance, DoorDash initially priced at $102 per share, subsequently peaking at $256. Currently, the company’s value stands at $135.50 in pre-market trading. This figure is considerably closer to the IPO price than many observed during the stock’s early trading days.

Consequently, these details are indeed important, and the data presented below will assist private companies in determining pricing for future funding rounds. Moreover, robust public market pricing could sustain the current trend of investment from affluent private entities, such as Tiger Global, targeting early-stage startups with promising growth potential.

Let's examine the Marqeta data:

• Marqeta’s final IPO price range was set between $20 and $24 per share.
• The actual Marqeta IPO price reached $27 per share.
• Marqeta’s fully diluted IPO valuation amounted to $15.4 billion.
• The company’s final private valuation was approximately $4.3 billion.

Since commencing trade, Marqeta’s share price has risen to $30.52. This IPO is notably bullish, as the company priced above its projected range, experienced initial trading gains, and significantly increased its final private valuation. The fintech sector appears strong, and the overall exit market is demonstrating positive momentum.

Now, let’s turn to Monday.com:

• Monday.com’s final IPO price range was $125 to $140 per share.
• The Monday.com IPO price settled at $155 per share.
• Monday.com’s fully diluted IPO valuation is $7.9 billion.
• The company’s final private valuation was around $1.9 billion.

As trading has not yet begun, predicting future performance is difficult. However, Monday.com’s IPO pricing is also highly encouraging. The new valuation represents a substantial multiple of the company’s previous private valuation, and the company secured more capital than initially anticipated. Furthermore, investments totaling $150 million from Salesforce and Zoom, made at the above-range IPO price, have significantly bolstered the Israeli company’s financial position.

The situation becomes somewhat less clear from this point forward.

Zeta Global priced its IPO at $10 per share, the lower end of its projected range. Additionally, the company offered fewer shares than originally planned. This resulted in a $1.9 billion valuation, which was lower than expected. Is this a bearish indicator? Not necessarily, as Zeta’s year-over-year growth was moderate. Therefore, we are not observing the valuation of a rapidly expanding unicorn entering the public market, but rather a more steadily growing company that has generated increasing adjusted profits. It represents a different type of business.

The news regarding Zeta Global is neutral.

Finally, 1stDibs, the e-commerce marketplace company whose impending IPO may have been overlooked, priced its shares at $20, within its $19 to $21 range. At this price, the company is valued at just under $800 million. This valuation is slightly less than 2x its Q1 2021 annualized GMV run rate. This doesn’t appear particularly remarkable in either direction. The 1stDibs debut also appears neutral.

While Zeta and 1stDibs could see their share prices increase upon commencement of trading, potentially altering the current assessment, our evaluation of this active IPO week indicates that the larger debuts were decidedly positive, and the smaller ones were largely as anticipated. This translates to a positive week for both the IPO market and venture capital returns.

We can anticipate an increasing number of companies and Special Purpose Acquisition Companies (SPACs) pursuing public market listings in the near future.