The New York Stock Exchange welcomes Clear Secure, Inc. (NYSE: YOU) executives and guests to celebrate its IPO on June 30, 2021.
On a day with more tech IPOs than available bell-ringing slots on US exchanges, investors made billions in profits.
But the winners went well beyond Silicon Valley’s venture capital network.
Uber and Tencent came to SoftBank as the biggest stakeholders in Chinese driving service Didi Chuxing, which debuted on the New York Stock Exchange on Wednesday and closed with a market cap of $ 67.8 billion. Delta Air Lines is one of the top investors in airport security provider Clear, which rang the opening bell on the NYSE.
Among venture firms, New York’s Insight Partners had the biggest day thanks to their $ 1.45 billion stake in cybersecurity software company SentinelOne, while Highland Capital owns over $ 500 million in shares in Xometry, a manufacturing marketplace .
There is also a lot of money for private equity firms. Francisco Partners owns over a quarter of LegalZoom, which opened Wednesday on the Nasdaq, and advertising technology company Integral Ad Science is majority-owned by Vista. The final bell of the Nasdaq rang integral.
While software companies Confluent and Doximity’s IPOs last week primarily rewarded well-known venture names such as Benchmark, Index Ventures and Emergence Capital, this series of deals underscores the thirst for technology across the investment universe. From buyouts and mutual fund managers to large publicly traded companies, capital has poured into the tech industry, which plays an outsized role in the wider economy.
Didi was by far its biggest debut on Wednesday after raising $ 4.4 billion on its IPO. Its largest investor is SoftBank, which, according to PitchBook, began buying stocks valued at $ 16.5 billion after receipt in 2015, according to PitchBook. At close of trading, the company raised $ 13.7 billion, primarily through its Vision Fund.
Traders work during the IPO of the Chinese ride-hailing company Didi Global Inc on the floor of the New York Stock Exchange (NYSE) in New York City, the United States, June 30, 2021.
Brendan McDermid | Reuters
Uber has a $ 8.1 billion stake in Didi after it ceded China to its rival in 2016 and sold its Chinese business in exchange for Didi shares. At the end of March, Uber valued its Didi share at $ 5.9 billion.
Emil Michael, the former chief business officer of Uber, tweeted earlier this week that Uber’s windfall was all down to a $ 2 billion investment.
“Almost every stakeholder was against our large investment in China and ruthlessly negative,” Michael wrote in one of several tweets about the deal.
Chinese internet giant Tencent owns a $ 4.4 billion stake in Didi after investing in 2013. Apple and Alibaba also invested in later years, but they each own less than 5% of the company, so their holdings are not disclosed in the prospectus.
‘Reduced stress’ at the airport
Clear, whose biometric devices help passengers pass airport security lines, has a market cap of $ 5.9 billion after its stock rose 29% to $ 40 on its NYSE debut.
T. Rowe Price is Clear’s largest outside investor with $ 763 million in the end, followed by venture company General Atlantic with $ 596 million.
Delta’s stock is valued at $ 331 million on an investment tied in partnership between the two companies. At the airline’s hub in Atlanta, Delta uses facial recognition systems to allow passengers to quickly board some international flights without showing a boarding pass or passport. In 2017, Clear began operations at New York’s John F. Kennedy and LaGuardia airports and, according to the prospectus, pays a revenue share to Delta instead of paying the airport.
“Our customers tell us that their time is valuable, as well as a consistent, pleasant airport experience with reduced effort,” said Ed Bastian, Delta CEO, in a press release at the time of the agreement in 2016. “We look forward to, what this partnership will bring to our customers. “
SentinelOne rose 21% on Wednesday after raising $ 1.2 billion on its IPO. Insight Partners, which is in the middle of a winning streak in Israel’s Monday.com and WalkMe IPOs, is the largest shareholder. Tiger Global, the investment firm best known for late-stage tech deals, holds a $ 1.1 billion stake.
Xometry, which provides technology for on-demand manufacturing, had the biggest pop among IPOs on Wednesday, nearly doubling from its offering price of $ 44 to $ 87.39.
The company closed the day with a market cap of $ 3.7 billion. Highland Capital, which operates in the Bay Area and Boston, led a 2015 investment of $ 8.8 million on a valuation of $ 40 million. T. Rowe Price led the final private round last year with a valuation of approximately $ 550 million.
Randy Altschuler, CEO of Xometry, told CNBC’s “The Exchange” that an IPO is the best option for the company, even if there are more options for an IPO, such as an IPO.
“We had a lot of enthusiasm on our debut today and we thought, hey, let’s build a book of long-term investors and build a great company,” he said.
Great returns for buyout firms
Two private equity deals from 2018 also paid off well on Wednesday.
Francisco Partners nearly quadrupled its money in LegalZoom, less than three years after the company invested $ 300 million in a deal that valued the legal services side at $ 2 billion. After the stock rose 35% to $ 37.85 on Wednesday, LegalZoom’s market cap rose to $ 7.3 billion and Francisco’s stake hit $ 1.1 billion.
Vista’s return on investment for Integral Ad Science isn’t quite as dramatic in percentage terms, but the total in dollars is even higher. In June 2018, Vista bought a majority of the ad tech company in a transaction valued at $ 835 million, according to PitchBook.
Integral Ad’s shares rose 14% to $ 20.58, giving the company a market cap of $ 3.1 billion. Vista’s 70 percent stake is now worth over $ 1.94 billion.
CLOCK: Xometry CEO on his IPO debut