Three Things (6/29)
Jun 29, 2022
1) IPO volume grinds to a standstill: U.S. IPO volume is down 95% from this point last year. As of June 2022, only two IPOs on U.S. exchanges have raised more than $500 million: alternative asset manager TPG Inc. and eye-care spinoff Bausch + Lomb Co. The backlog of companies that have filed with the SEC to go public in the past year has grown to 185.
Titan’s Takeaway: Companies that are raising capital through public offerings must have mission-critical needs for financing, a shift from the way in which companies were able to opportunistically access equity capital markets just last year. Companies may be faced with a decision: go public at a lower valuation, or avoid an IPO for the foreseeable future.
2) FrontApp Inc. valued at $1.7 billion: Customer communications platform FrontApp raised a new round of financing which values the company at $1.7 billion. The fundraising round was led by Salesforce Ventures and roughly doubles the valuation for the company. FrontApp provides customer support software used by Lyft, Shopify, and Airbnb, among others.
Titan’s Takeaway: The message is clear – despite a bear market, fundraising in the private markets is still available for high quality companies that prioritize product, price, and service. FrontApp’s customer relationships and world class management provided an ideal setup for a successful financing round, a trend we expect to continue in the second half of 2022.
3) Electrify America charges forward: On Tuesday, Volkswagen subsidiary, Electrify America, announced plans to expand its charging station footprint in partnership with Siemens. The charging company will double its capacity to 10,000 ultra-fast electric vehicle chargers across 1,800 unique stations. Bets on charging networks are supported by a doubling of EV auto sales in the U.S. last year.
Titan’s Takeaway: The lack of charging stations represents a major bottleneck to the mass adoption of electric vehicles. Expanded charging infrastructure has the potential to pull forward EV demand and lower costs, making the shift to electric more attractive and realistic for consumers.
Cash Management
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