The fees that investment banks charge for going public can gobble up several points off a public company’s gross proceeds, but the new competition is giving some companies a chance to keep more of that sweet debut money.
This week, Nubank paid just 1.6% of the $ 2.6 billion it raised to its syndicate banks. Bloomberg reported that “of 490 IPOs in the US this year, only three paid a lower percentage”.
In this morning’s issue of The Exchange, Anna Heim and Alex Wilhelm compared Nubank’s savings to DoorDash, which were not set aside any Shares for syndicate banks when going public in November 2020.
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They found several factors contributing to this, including increased global competition, the desire to attract more retail investors and, yes, SPACs.
This is hands down “good news for startups” as exchanges in different time zones offer more places for startups to list (or double-list) their stocks, write Alex and Anna.
“Could this be a sign of some of the changes we want to see in 2022?”
I have Tuesday December 21st off, but we’ll be back on Friday December 24th with a very comprehensive newsletter. Thank you for reading and have a great week.
Walter Thompson
Senior Editor, TechCrunch +
@yourprotagonist
Dear Sophie: How to maneuver the latest travel bans, H-1B alternatives
Credit: Bryce Durbin / TechCrunch
Dear Sophie,
The 2021 H-1B lottery process was a roller coaster ride!
We sponsored several people for this year’s lottery. One of our registrants was selected in the first round in March, but none was selected in the second round in July.
We have just learned that another of our registrants was selected in November; However, he is from South Africa and is not allowed to travel to the USA due to Omicron.
What should we do? Any suggestions on what to do with our other potential hires that weren’t selected?
– Avid employer
A couple of questions about the upcoming Reddit IPO
Credit: Nigel Sussman (opens in a new window)
Founded 16 years ago, Reddit raised $ 1.3 billion, raising the company to a valuation of $ 10 billion. This week the user-generated community announced that it had filed a confidential request to go public.
“You know what that means,” wrote Alex Wilhelm. “It’s time to ask questions.”
While waiting for his S-1 with a sharpened scalpel, Alex shared initial questions about the operation of the social hub, in particular:
“We’re curious about the cost of content moderation, product expansion, the company’s revenue mix, the frequency of government filings, and what the unicorn has to say about crypto.”
How to Build a Better Missile Company [Video]
Credit: Netsawai Chair (opens in a new window) / Getty Images
In New Kids on the Launch Block, a panel at TC Sessions: Space 2021, Darrell Etherington spoke to three rocket manufacturers to learn more about the factors that make commercial space launches cheaper and more competitive:
- Lauren Lyons, COO, Firefly Aerospace
- Benjamin Lyon, Chief Engineer & EVP Engineering, Astra
- Max Haot, Founder and CEO, Launcher
“A common topic that quickly emerged was that vertical integration is a key success factor in the missile business and reduces costs, especially for lower capacity launchers,” writes Darrell.
It’s time for investors to redefine how we value digital health startups
Credit: Viaframe (opens in a new window) / Getty Images
A report from RockHealth.org found that 2021 was the best fundraising year yet for digital health startups.
Driven in large part by the explosive demand for psychiatric services and the expansion of telemedicine during the pandemic, more and more investors are looking for founders who can credibly reduce costs and increase efficiency in a notoriously ailing industry.
Regardless, “Providing evidence of a financially justified ROI case requires a combination of time and data, and digital health is no exception,” writes Alyssa Jaffee, partner at digital health-focused VC company 7wireVentures.
Bold visions and solid fundamentals are fueling investors’ interest in space [Video]
Credit: Roscosmos press office (opens in a new window) / Getty Images
The space industry has seen unprecedented levels of private investment – and exit – as several companies expand.
In a TC Sessions: Space 2021 panel entitled “Backing the Brightest”, Darrell Etherington reviewed last year’s activities and looked ahead to 2022 with three investors:
- Tess Hatch, Partner, Bessemer Venture Partners
- Shaun Maguire, partner, Sequoia
- Lisa Rich, Managing Partner, Hemisphere Ventures
John de Souza from Ample on the benefits of B2B, corporate culture and investors who understand it
Credit: Bryce Durbin
Starting a startup is inherently risky, but scaling a company to thrive where others have spectacularly failed is a very bold move.
San Francisco-based Ample works with companies that manage EV fleets to swap its modular battery packs in and out of their vehicles.
“Fourteen years ago, Better Place raised nearly a billion dollars to do what Ample does and eventually filed for bankruptcy,” says Rebecca Bellan.
In an in-depth interview with co-founder John de Souza, she asked about the company’s go-to-market strategy, its culture and why he is certain that Ample will be successful where others have not.
“The economy and operation work very well because you don’t need many at a single station to break even. With a small fleet, you have a maximum of 20 cars and it makes up for it. That is what makes it so attractive. You don’t have to provide the stations until you have a customer. “
