Biotech, Real Estate And Government Enterprises Could Lead 2015 IPOs
Initial public offerings (IPO) have been a big topic in the Australian economy this year, particularly because it’s been such a good year for companies looking to go public. With this strong performance in the 2014 financial year, 2015 looks poised to be just as successful, if not more so for companies who do IPOs right.
“Even geopolitical tensions and weaknesses in international markets have had little impact on the Australian market,” said Glyn Yates, the director and national head of corporate finance at RSM Bird Cameron. “Private companies considering listing on the ASX are well-positioned given the strong performance of the small capitalisation sector of the market over the last few years, creating a healthy environment for future listings as high prices encourage owners to consider an IPO.
“With debt still hard to source and high PE (Price / Earnings ratio) multiples at the smaller end of the market, many companies are likely to consider an IPO as an attractive prospect in 2015.”
Yates believes that IPOs will drive other businesses decisions, particularly mergers and acquisitions.
“The uptick in IPOs is likely to drive an increase in mergers and acquisitions, particularly for companies looking to leverage a multiple arbitrage strategy making smaller, bolt-on acquisitions. The market looks resilient, as entities are gearing up for IPOs. This means there is more budget available for companies to spend.”
Yates shared the three sectors investors should keep an eye on to be IPO heavy in financial year 2015.
1. Biotech- and technology-related IPOs. The competitive landscape for funding in research and development is proving to be more and more challenging so companies are more likely to look for funding through alternatives means such as an IPO.
2. REIT (Real Estate Investment Trust) IPOs. This trend is in line with the market and Australians’ inherent preference for real estate and current appetite for yield in the face of low interest rates.
3. Privatisation of government enterprises. In comparison to Labor governments, Coalition governments have historically been much more aggressive in privatising publicly-held investments to reduce government debt. The Coalition has begun reviewing assets that can be privatised via an IPO. Medibank Private is at the forefront, with other potential privatisations including: Australia Post; the ABC and SBS; Snowy Hydro; and Defence Housing Australia.
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the seventh largest network of independent accounting and consulting firms in the world.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.