Nubank, HashiCorp Provide Startup Market with End-Of-Year IPO Wins

Nubank, HashiCorp Provide Startup Market with End-Of-Year IPO Wins

Nubank’s stock began trading on the New York Stock Exchange yesterday. Nubank became Latin America’s largest publicly traded bank when its shares began trading at a price of $9. Nubank raised $2.6 billion in its first public offering. As global coordinators, Morgan Stanley, Goldman Sachs, Citigroup, and NuInvest lead the offering.

Nubank’s CEO David Velez, together with co-founders Cristina Junqueira and Edward Wible, rang the bell at the New York Stock Exchange. Nubank, which began as a startup that gave a free credit card eight years ago, has grown to become the region’s most valued publicly traded bank.

The IPO season for 2021 is winding down this week, with HashiCorp and Nubank pricing and listing their initial public offerings. Both IPOs went successfully, which is great news for startup enthusiasts and venture capitalists. 

If current calendars hold true, Samsara’s IPO will take place next week, but that will be it for the year. We made it all the way to the end! However, this does not negate the fact that we have work to do. Yes, we do.

This morning, we are analyzing HashiCorp and Nubank’s final IPO pricing, as well as their final pre-debut valuations and revenue multiples, to see what we can learn from their early trading. The purpose is to determine how robust the U.S. technology IPO market will be by the end of 2021.

If there are no severe shocks, the IPO cycle in 2022 should be lively. Our reasoning is that public company technology values remain significantly above historical averages, and the backlog of yet-to-be-public unicorns is at an all-time high. The combination appears to be a prescription for a large number of flotations in the next year.

However, in order to comprehend where 2022 begins, we must first comprehend how 2021 concluded. HashiCorp planned to price its first public offering at $68 and $72 per share. It ended up selling the stock at $80 per share in its first public offering, a huge victory for the open-source software business.

HashiCorp was valued at $14.2 billion by Renaissance Capital at $70 per share. With an $80 per-share price, the company’s fully diluted valuation comes to $16.2 billion. Given that the firm was last valued by private-market investors at the $5 billion level in early 2020, its IPO price was nothing short of revolutionary, however, one might argue that it was merely underpriced in 2020, minimizing how astonishing its IPO price was.