Banking

Technology Fueling A Hot, Record-Setting IPO Market

As the traditional summer break ends, initial public offerings are stampeding ahead, making 2021 one of the biggest years ever in terms of proceeds raised, led by tech IPOs.




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Thus far this year, IPOs on U.S. markets have raised $100.5 billion, and total proceeds this year could shatter the previous record set in 2000 by about 30%, according to Renaissance Capital, which manages tech-focused ETFs.

“The U.S. IPO market has already posted its busiest year since the internet bubble in 2000, and we expect issuance to stay active in the fall,” Renaissance Capital said in a posting on its website.

Next week, two large tech IPOs are scheduled to begin trading. Freshworks (FRSH) looks to raise $855 million, offering 28.5 million shares at a range of $28 to $32. That would give it a fully diluted market valuation near $9.6 billion.

Cloud-Based Customer Service IPO

Freshworks provides a cloud-based customer service and support platform, used by some 52,500 businesses, according to the Freshworks IPO filing.

Freshworks is scheduled to price Tuesday and trade Wednesday under the ticker FRSH. The lead underwriters are Morgan Stanley and JPMorgan.

Another tech IPO coming next week is restaurant payments processor Toast (TOST). It plans to raise $685 million by offering 21.7 million shares at a price range of $30 to $33. That would give Toast a fully diluted market value of about $18 billion.

Toast offers a cloud-based software platform for a broad range of payment services, serving 48,000 restaurants, according to the Toast IPO filing.

It is scheduled to price Tuesday and Trade Wednesday under the ticker TOST. The lead underwriters are Goldman Sachs and JPMorgan.

Performance Of Tech IPOs This Week

Among top-performing IPOs this past week, ForgeRock (FORG) raised $275 million. It priced 11 million shares at $25. ForgeRock stock jumped 46%, closing at 36.50, on the stock market today. ForgeRock provides security identity management software.

Definitive Healthcare (DH) raised $420 million. Shares priced at $27 as trading began Wednesday. On Thursday, shares climbed 9.1%, closing at 47.22. It provides a health care intelligence platform.

Another tech IPO this week was Thoughtworks Holding (TWKS). It raised $774 million. Shares priced at $21 and began trading Wednesday. On Thursday, the stock climbed 7%, closing at 31.46. Thoughtworks stock has gained more than 43% from its IPO price.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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