Cerebras is looking like one of the hottest IPOs in the US this autumn. Because it competes with Nvidia, investors have been increasingly interested in its prospects. There are persistent concerns surrounding the IPO however.
Cerebas has a single very large Middle East customer and currently does not have any of the big banks which have previously assisted on solid Wall Street tech IPOs involved in the deal. The numbers are looking punchy however, with an IPO valued at$4 billion.
The company reckons its flagship chip technology is faster and more efficient than the Nvidia GPUs. Sales more than tripled in 2023 ($78.7m) and revenue has made it to $136m. It also claims to have signed agreements to sell some $1.43bn in terms of systems and services. But the vast majority of future revenue is being booked from G42, a tech company based in the United Arab Emirates.
G42 is looking to expand its investment in Cerebras, which has forced Cerebras to consult the Committee on Foreign Investment, a US government body that has been known to block major investments in US ‘critical infrastructure’ from the UAE in the past. G42 also has historic ties to China, which does not go down well in Washington DC at the moment.
There have been a lot of surprisingly suppressed valuations of Wall Street tech companies since the end of the pandemic, especially given the stellar performance of the Mag 7 stocks. The deal is being led by Citigroup and Barclays, but absent from it are the likes of JPMorgan and Morgan Stanley, both of which have a good track record in the tech IPO space.
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Upstream Bio upsizes IPO at $17 offer price
Upstream Bio priced its IPO at $255m last week, one of three healthcare stocks to IPO in the US in early October. Analysts reckon that the strong performance of IPOs like BioAge Labs and Bicara Therapeutics are encouraging other companies to test the market.
Upstream’s lead product is called verekitug, which is currently in mid-stage studies for treatment of severe asthma and chronic rhinosinusitis that is provoked by benign polyps. The company had previously raised $400m from investors, despite having only been founded in 2021. Big backers of Upstream Bio have included Enavate Sciences and Venrock Healthcare Partners.
Upstream Bio upsized the IPO prior to the listing on Friday 11 October on NASDAQ, with a 30 day option to purchase an additional 2.25m shares of common stock at the IPO price ($17). The gross proceeds are expected to be in the region of $255m, before deducting underwriting discounts and commissions. The offering is expected to close Tuesday, 15 October.
Applied Nutrition to IPO in London this month
Likely to be one of the most prominent IPOs on the London market this year, Applied Nutrition is planning to list this month. Brokers are already canvassing early interest in the shares from retail clients. The company was founded 10 years ago and has established itself as a leading player in the UK health and nutrition industry.
Applied Nutrition offers performance supplements and hydration products targeted at professional athletes and fitness-conscious consumers. It sells its products across 60 countries and has tie-ups with numerous sports personalities. Among its brands are All Black Everything and BodyFuel.
The company reported pre-tax profits of £24m for the year ending in July. This was up from £18m the previous year. Sales have surged by 42% to £86.2m with underlying earnings growth of 42%. It is aiming to provide investors with a free float of at least 25% of its shares post-IPO.
“The financials for the firm are incredibly appealing with group revenues growing strongly as well as generating significant free cash flow,” said UK broker Atlantic Capital Markets in a recent investor briefing.
A part of the IPO, founder and CEO Thomas Ryder plans to reduce his ownership stake from 55% to 30%. Andy Bell, founder of UK Broker AJ Bell, has recently joined the company as chairman.
