From eToro’s blockbuster debut to the return of SPACs and the flood of micro IPOs from China, Anthony and Stephen break down what’s really happening in the 2025 IPO market.
They also dive into the data behind Japan’s surprise IPO boom, why London continues to lag, and which investment banks are topping the ECM league tables, with one unexpected name climbing fast.
Essential insight for anyone tracking deals, equity markets, and the big stories behind this year’s public listings.
(00:00) Intro & Key Themes
(02:47) IPO Market Overview: Year-to-Date Performance
(05:14) Micro Listings: A New Trend in IPOs
(13:01) Understanding SPACs and Their Role
(17:41) Global IPO Activity: A Broader Perspective
(20:21) Sector Analysis: What Companies Are Going Public?
(24:01) eToro IPO & Notable Companies to Watch
(33:44) UK IPO Landscape: Challenges and Opportunities
(36:52) Investment Banks: League Tables and Revenue Breakdown
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hello and welcome back to the Deal Room.
And today we are doing the stateof the IPO market in 2025 and
you're going to hear about big names.
One of the biggest in fact in last week has been E Toro.
And I've got to give a quick shout out to Sam NI know you
listen Sam. Sam is a former member of the
Amplified team. He is the lead face nowadays of
(00:22):
E Toro in terms of their training Academy.
And Sam, you know, I hope you'regetting your little slice of
that IPO action because you deserve it, brother.
So well done to to Sam and the teammate E Toro.
But yeah, really interested to hear Stephen, your thoughts on
that one. Then there's there's a few
others, there's Hinge, Health Figma, there's the update on Cor
Weave. There's lots to go over, but
(00:43):
more so really want to put this into context of the year to date
performance because we talk about M&A in the last few
episodes quite a lot. We haven't talked about IP OS in
a while, but I know we start talking then about cross-border
listings, specs, PVCIPO LED typeof activities.
And then because of a lot of people who listen are thinking
(01:04):
about careers and finance want to tie this back to the
investment bank league tables. Who are the winners, losers,
Who's really performing well? Who's which banks are really on
the pulse of some of these biggest listings?
And then what does that look like in the composition of
revenue within an equity capitalmarkets division within a bank?
So perhaps best place to start, Steven?
(01:26):
Well, first of all, where are you?
You have you got a new office? Is this your new work office or
what's going on? Yeah, I mean, so not not unlike
etoro who just had a very successful IPO, Amplify is doing
very well as well. So I'm in a hotel.
You might have heard of the Mandarin Oriental.
I don't know if you. So it's a little bit like the
(01:48):
Mandarin Oriental, but it's a Premier Inn.
We actually, I'll tell you why. I'll tell you why I'm in a
Premier Inn. It was because we were at an
event last night. The girls are investors network.
It was a summary of the internship preparation course
that we do. So shout out to everyone who
(02:09):
listens that has been part of the kind of game Network.
It's a fantastic charity, fantastic organization.
So I was there last night chatting about all sorts of
different things, getting peopleonto the podcast.
I think I must have shared your face on the on the podcast tile
about five times That basically what I do these days.
(02:31):
So yeah, it was good fun. Well, thanks mate.
So, so let's, let's talk about, I guess let's set the scene and
let's talk about the IPO market overview year to date because
you know, we're, we're five months in now.
Yeah, this is a, this is a really, really good one.
And I think it's a, it's a fantastic representation of the
(02:52):
need to go a couple of layers deeper to understand the driving
forces of high level statistics.So I can give you the
performance metrics of the global IPO market and I can say
that in Q 12025, there were 291 IP OS raising $29.3 billion
(03:15):
globally. That was the third highest on
record after 2021 and 2015. And in particular, let's focus
in on the US because that's obviously the area that we we
speak about quite a lot. So Q 1/20/25, third strongest IQ
one IPO performance in history. I'm just looking at the data
(03:36):
here and there were 61, sorry, there were 62 IP OS in the US in
Q 12025 compared to 41 IP OS in Q 1/20/24.
So that is an increase of 51%. And from a superficial
perspective, you're thinking to yourself, wow, the IPO market is
(04:00):
back gangbusters, here we go. Now I'm looking at the same
chart on the right hand side of the chart.
It's it's the same, but it's talking about year on year
change in IPO proceeds. Remember the volume of IP OS was
51% up. The change in proceeds is only
2% up. Now this is where it gets
(04:22):
interesting and important. So lots more IP OS, but the size
of the IP OS are a lot smaller. So what's going on?
You probably haven't had too many headlines about, you know,
multi billion dollar IP OS and that's because the vast majority
of these IPOs in the US have been based on either micro
(04:48):
listings from predominantly Chinese companies.
And I'm going to talk about thatin a second and special purpose
acquisition companies, SPAC IPOs.
So which one do you want me to talk about first?
Do you want me to talk about SPAC IPOs or do you want me to
talk about micro listings? Come on.
Come on up. Yeah.
Well, the these, these are greattopics because I think not
(05:08):
everyone's going to be familiar with these.
So perhaps look, we'll we'll go to SPAC second.
So let's go micro first, becauseI've never really heard of that.
This is super interesting. So if you go, I'm just with
another one of my tabs, I'm juston the NASDAQ IPO calendar
website and I'm looking at the, all of the IP OS that happened
(05:30):
in April 2025 and the and, and I've and I've ranked it from
offer amounts. That's how much they raised in
their IPO, right? So at the top is a company
called Smart Stop self storage real estate investment trust.
(05:51):
So that's a, that's a REIT, that's a not a spat, that's not
a, not a, not a micro raise. Then Shaggy Holdings at 411.
Below those two IPOs, there are a raft of SPAC listings, Berto
Acquisition Corp, New ProvidenceAcquisition Corp, Titan
Acquisition Corp, Citi Acquisition Corp, Inflection
(06:14):
Point Acquisition Corp, all raising a good amount of money.
But then you go to the next kindof run down below the
acquisition corps and then you've got I'd say at least half
of the April listings under $15 million raised on the NASDAQ.
So this is Kaprina Holdings, Cayman Limited, Top Win
(06:35):
International Energies Group, TMD Energy, Bell Life Holdings,
IO3 Limited, Master Beef Group, which I'm sure you've heard of
Ether Holdings, Pinnacle Food Group, etcetera.
So what the heck is going on? What are all of these micro?
What are all of these micro IP OS?
(06:55):
So I looked into a few of these micro IP OS, because this is,
this is an area that wasn't immediately familiar to me.
And these are big companies, butthey're IPO ING, just a slither,
a really, really tiny slither. So Pinnacle Food Group, for
example, it's a 5 billion revenue company, but only weighs
(07:16):
$7,000,000 on its NASDAQ IPO. This is not a kind of ringing
the bell Mecca IPO situation. What transpired.
And This is why I would always encourage people to to look
below the surface level information.
What basically happened is at the end of April, NASDAQ changed
(07:38):
its rules on micro listings saying that you need to raise a
minimum of $15 million and thereneeds to be a number of
different number of different elements to getting you listed.
It needs to be a certain percentage of your overall share
capital. So basically blocking this route
(07:59):
to companies, in particular Chinese companies and
cross-border companies, basically getting into the
NASDAQ almost through the back door with a micro rays.
And remember, once you've once you've IPO D, that opens up the
US public markets investment to all of these companies.
So it's, it's super, super interesting that you would never
(08:21):
hear about all of these companies that I've mentioned,
but they formed a very, very long tail.
And because the rules have been changing, they've you'll see it
in January, April, January, February, March and April,
you'll see these micro sub $10 million listings getting in
before the rules change. So let's take a look at Q2 when
(08:44):
it comes out and I can, well, I can't guarantee you, but I
reckon that the number will be pretty flat quarter on quarter
or year on year. So how, how much of that money
then do we know is like Chinese money in terms of how, how, you
know, looking cloak and dagger? Is it China?
Is it the bankers in China having some sort of dialogue and
(09:06):
there's some sort of flow that'scoming and they want access.
And so the bankers are going outdrumming up business, knowing
that they've got this demand. They're like just trying to
piece together like, where is this demand coming from?
Is it companies wanting to raisemoney or is it companies that
there's just the bankers lookingto make deals?
Yeah, companies looking to raisemoney.
(09:28):
It's so interesting and and I think you're right with your
kind of your cross-border analysis.
So I've just got a little snippet from the FT 53 of the
past two quarters listings were from China and Hong Kong.
And these were all pretty much all I think 51 of the 50, three
were micro micro listings. So who and this is, and again,
(09:49):
it's, it's about circumventing the rules, but it's also about
getting into getting a foothold in the in the US market in a
very, very tariff heavy environment or very uncertain
and volatile environment. And what's really interesting
about this, I think you've also mentioned, you know, it's just
that you know, the bank is getting their payday.
When you look at the banks on these tickets, these are not the
(10:12):
big investment banks, right? I would say the minimum clip for
Goldman's to represent a companyas lead book runner on an IPO,
it's probably 8 to $10 million. These companies are only raising
$7,000,000, so they're tiny little banks that are helping
them get this listing away. And that's in part because you
(10:33):
don't need to do the book building process to the same
extent, right? If you're raising $7,000,000,
you don't need too many IPO investors to come in.
It's also partly because the listings rules up until April
11th of this year were a lot looser on micro IPOs, so the
full S1 prospectus didn't need to get written in the same way.
(10:55):
So you don't need the big investment banks.
So, yeah, it's a really, really interesting dynamic and one that
probably we will see in Q1 of 2025, but we'll maybe never see
again in the way that in the waythat it's represented in the
numbers. Just in terms of actual names
then as these names people wouldstill be familiar with in terms
(11:16):
of who does take these deals at this micro level.
Well, I tell you what, I'd neverheard of some of these
organizations. I'm trying to fight them now in
my, in my notes. I yeah, really, really small
boutiques I would say, and maybebit and maybe specialist
boutiques that are geared towards this kind of
(11:38):
cross-border small IPO market and will probably take a kind of
10% fee, you know, 5 to 500 K to$1,000,000.
So it's not probably an area to go hunting with regards to your
graduate job. Let's just let's just be honest.
It feels like these guys are more like, you know, like a a
(11:58):
visa specialist where like they,they understand the process
really well and the regulatory environment and they're just
like, yeah, we've got, we just write, rinse, repeat, bang,
bang, bang, high volume. Whereas Goldman's is much more
stuck in right, doing these massive complicated deals.
Yeah, it's interesting. I think I think you're
absolutely right. And I'm just looking again at
(12:18):
the volume of these sub $10 million deals again mainly,
mainly Chinese companies. And yeah, it must be a rinse and
repeat because they were, you know, again, as I said, I think
it was 53 companies in the last two quarters.
If you if you IPO 53 proper, proper IP OS, full fat IP OS in
(12:39):
two quarters, that is, you know,that will be a world
record-breaking couple of quarters, right, You know, in
terms of in terms of fees for the banks and things like that.
So, so yeah, I think, I think the Visa sponsorship model
probably it's closer to the truth than the full fat IPO
process that we've spoken about.Cool.
All right. Well, look, you did mention the
word SPAC, just conscious of some may not know what SPAC is
(13:03):
first. So maybe it's just a quick
definition of what that is and then how that plays into this
IPO situation? Yeah.
So special purpose acquisition companies, it's super
interesting that we've covered them on the podcast before, but
they have they had this SPAC IP OS had this absolute breakout
year in 2021. And in my note, you will see a
(13:24):
chart that looks at the IPO Market Volume of IP OS year on
year for the last 10 years. And 2021 is about is a
skyscraper on the bar chart about 10 times higher than any
other year, Thanks, thanks largely to this breakout year
for special purpose acquisition companies.
And very, very quickly special purpose acquisition companies
(13:47):
are acquisition vehicles. They raise money through an IPO
and have that capital, that equity capital, and they are
given two years to go out and find a normal company to merge
with and then take that company into the public markets through
(14:08):
that publicly listed acquisitionvehicle.
That process is called a SPAC merger or AD SPAC when it starts
becoming a special purpose acquisition company and actually
ends up trading as the name of the company that it's acquired.
And there's been lots of D specsover the last few years.
I just wanted to mention, I think we mentioned this on the
(14:29):
podcast a few months ago. Oclo which is the nuclear energy
start up backed by our best friend Sam Altman closed it's
SPAC merger and therefore despacin May 2024 and it's now trading
at around $32 a share, more thantriple it's SPAC IPO price of
(14:50):
$10 a share. So, you know, love them or hate
them, special purpose acquisition companies are not
going away. And they are a alternative way
of private companies getting AUSpublic listing.
And obviously the benefit for the private company is that it
don't have to go through the really, really messy S1
(15:14):
prospectus filing, underwriting,book building, IPO launch.
Is it successful? Is it unsuccessful?
They're kind of sneaking throughthe back door, right?
And it's, it's so interesting tosee this market rebound because
again, going back to 2021, we know that this was a bit of a
wild, Wild West for SPAC's. All sorts of rubbish, quite
(15:38):
frankly, was being, was being acquired through the back door,
was being IPO through this back door mechanism.
And SPAC's took a bit of a, a bit of a reputation blow because
you know, you might have invested in one of these SPAC
acquisition vehicles. They, you know, that SPAC
company, that SPAC acquisition vehicle would have bought a
(16:00):
pretty rubbish company and then your $10 a share would have
dropped to $0.50 a share. And you're thinking, well, this
is a bit of a bit of a racket. But they bounced back and they
accounted for 43% of all USIPOS in, in, in Q1, which is, which
is quite, quite meaningful. And the reasons why this spec
(16:23):
market has SLUT has started to mature a bit.
Gone are the heady days of just putting anything into a SPAC,
putting anything into a SPAC merger.
There are actually some really quite good companies that are
being sought after by the SPAC IPO acquisition vehicles.
So again, it's, it's one of these things you get that, what
(16:43):
is it? Is it the hype cycle, the
Gartner hype cycle? You get the, the, the hype and
then you get the through of disillusionment and then you get
the industry maturity. And I think that's probably what
we've seen over the last three years.
You've had the mega high, you'vehad this horrible through of
disillusionment. And now we're just starting to
see a slightly more rational market where more credible
(17:06):
investors or more credible acquisition vehicles are getting
set up by really, really credible organizations and
investors and actually finding some quite interesting targets.
And I think hope close not a badexample.
It's, it's, it's a, it's a pretty legitimate company to
take into the public markets. OK.
(17:27):
So, so far it's all been quite US centric.
I just wondered in terms of IPO activity, what's it looking like
elsewhere geography wise? Yeah, absolutely.
So let's let's cover some other markets.
Asia Pacific has had an interesting Q1.
So 118, sorry 116 IPOs across Asia PAC relative to 118 at this
(17:55):
time last year. But the IPO proceeds, unlike the
US, the IPO proceeds are up 87 percent, 10.9 billion IPO
proceeds relative to 5.8 billionin Q 1/20/24 bearing in mind
that 10.8 billion in Asia PAC is2 billion more than in the
Americas. So again, we have our US centric
(18:18):
view because that's what people find quite interesting.
But Asia pack has been flying and Asia pack has been flying in
part due to Japan. And I've me and you used this
used deal logic quite a lot as asource of information.
They have this lovely map and that illustrates represents all
(18:39):
of the investment banking and deal data.
And I'm just having a look at itat the moment.
We've got Asia X Japan. This is year to date IPO
proceeds, Asia X Japan up 12%, not bad.
Australasia up 14%, but less than $100 million of IPO
(19:00):
proceeds. So don't worry too much about
that. Japan up 404%.
So this is really interesting. Japan, as we've spoken about
before in the context of privateequity deals and the, the
opening up and the, the renewed interest in Japan has an economy
(19:22):
as it moves out of its deflationary cycle.
And you know, it's, it's an economy that's really, really
worth paying attention to. And there's a lot of activity
going on and $3.4 billion of IPOproceeds in Japan alone.
It's pretty interesting. It's definitely one to watch and
(19:43):
it and it and it kind of makes up for a pretty limp performance
across the rest of Asia. Just a question then.
Is there any useful information when you start to peel off a few
layers and start looking at, well, what actual types of
companies can we categorize intosectors?
So within these geographies, there's different stuff from a
(20:06):
macro perspective going on. What's going on in, like you
said, Australasia or Japan or Europe are all yes, impacted to
a large part by the ongoing US China conflict, but they all
have their own unique situations.
Happening economically. So I just wondered is there any
like any like signals in the tealeaves of like when?
(20:26):
What are these companies? Do they all fit within one
sector? Is it very spread?
Is it quite diversified? Is there anything we can get a
read from from the sector bases?Yeah, it's a, it's a really
interesting one. I'm, I'm just going to go back
to the US because that's unfortunately where I've got
most of most of my data. But, but if you look at the US,
(20:47):
the majority of IPOs so far thisyear have been in technology,
TMT technology, media, telecommunications and health
and life sciences. So health and life sciences
obviously is a very enduring sector in the US and it's always
been a pretty fertile ground forIPOs because quite capital
(21:10):
intensive the the IPO market understands or public market
investors understand health and life sciences especially
interesting breakthrough, you know, biotechnology, biopharma,
pharmaceuticals, etcetera. There were also 8 energy IP OS
again, are we reading the tea leaves?
(21:33):
But this is again, these these are pretty core US focused
industries that may be trying tokind of gin up US focused
investments and maybe a try to protect themselves against the
volatility by raising a bunch ofmoney now instead of into the
(21:54):
future. Who knows?
I would have to do a little bit of digging to see whether that
proportional split across TNT, health and life sciences,
energy, etcetera is has been different throughout the last
few years. But yeah, I mean, if this is
something that students are interested in, the data's there,
the tea leaves could be could beinteresting.
(22:17):
I think maybe what would be moreinteresting or at least of equal
interest is the timing, right? So you have this, I don't know
what the best analogy is, but you have this kind of this, this
traffic jam or this production line of IP OS that are ready to
(22:39):
go or almost ready to go. And you can see, you know, if
you look at any report, you can see IP OS that are mooted to
happen, slated to happen in 2025, then IP OS that have
actually been priced, then IP OSthat have actually been
launched. So it's kind of this production
line And so interesting the timing of some of these big IP
(23:02):
OS. So for example, etoro, we'll
talk about etoro in a second. Etoro was about to go on April
the 4th, I think it was. And then obviously there was
Liberation Day. And then they were like, no, no,
no, no, I'm not going. I am pausing.
And that was exactly the same Figma.
It was exactly the same for a number of other IPOs.
They were like, all right, we'requite interested and we actually
(23:25):
need to IPO this year. But as soon as April the second
came along, you had four or fivebig IPOs coming off and saying
no, we're just going to wait a little bit.
We're just going to see what happens.
The likes of StubHub, Klarner, they were all going to go in Q1
or Q2 and they've decided probably just going to wait.
(23:46):
And this is actually why to an extent you see this very very
unbalanced IPO picture where youknow there are only a few proper
IP OS and the rest are SPAC's and micro listings.
Yeah, there's probably a good segue thing talking of SPAC's,
because I was, I was just havinga quick look.
I do remember the the valuation I think of E Toro was north of
(24:07):
10 billion and they were going to go public virus back.
I think that was during the bootthe peak of the the tower as you
said when that 20/21/22 it must have been.
But yeah, talk, talk to me aboutit feels like those currents
definitely E Toro, as you said, they they couldn't have timed it
better with this current market rebound and crypto move.
(24:29):
Yeah. And and you know, the current
market rebound in terms of crypto Coinbase going, going
great guns, which I think it's probably it's its closest
competitor. I think it's up cord best is up
50% in the last month. Slapped myself on the risk for
selling all of my core based shares about 8 months ago.
But anyway, that's, that's by the pie.
(24:50):
So etoro, you're absolutely right.
In 2022, Etaro was going to go public through a SPAC merger at
a $10 billion valuation. Now that was scrapped due to
market uncertainty, 2022 interest rate hiking cycle
wheels slightly coming off the SPAC market.
And I think owner and and etoro who IPO last week priced at $52
(25:16):
a share, which exceeded its slated 46 to $50 range raised
about $620 million at a market cap of about $5.5 billion.
So that's a pretty significant haircut based on what was going
to be a $10 billion valuation in2022.
(25:37):
And you might be thinking to yourself, oh, these guys are
suckers. You know, the the founders and
the early investors, they could have cashed in at $10 billion
and all they've waited another three years and they're only
pricing it at $5.4 billion. But this is a really, really
important point when it comes tovaluation negotiation in in any
(26:01):
startup or any company that's looking to raise money, it's not
always prudent to raise at the very, very, very highest top of
the market, most frothy valuation.
You know, yes, you might be ableto sell some of your shares at
that frothy 10 billion valuation, but we know that
momentum is very, very important.
(26:23):
And if that SPAC had gone out at$10 billion and it started to
drop, started to plummet, started to plummet, these, these
kind of these momentum plays have a bit of a mind of their
own. And you could easily see this
dropping well below $5 billion even before the lock up period
of the initial investors in etoro and the founders of etoro
(26:47):
even before that lock up period ended.
So you know, you have to, it's sometimes prudent to go, hey,
look, we'll take, we'll take 5.4billion, right?
We'll price it conservatively, we'll raise a decent amount of
money and then we'll see what happens with the stock over the
(27:08):
next three months, six months, year, 2 years.
And you know, let's just take a look at etoro stock, $52 a
share. That's what it was priced.
It ended the day up about 34%. I don't know what it is at the
moment. I think it's probably around 70
bucks. So this is just a story of, you
(27:28):
know, having a little bit of patience, having a little bit of
prudence, not just going for thebig, you know, shiny $10 billion
number through a slightly volatile spec.
And actually look, you know, as your your ex colleague will
probably attest, I think the mood music in the Torres
probably quite good. Oh yeah, he's dropped me a few
texts, but yeah, well, one otherthing, I was just looking at
(27:52):
Coinbase, just to your point, that behavioural kind of finance
element. I remember, I think it was 21.
So when it was all like, you know, where's the next stop for
Bitcoin with 1,000,000 type talk?
And, you know, and the listing of Coinbase was coming.
This was when Deliveroo was coming.
So this was like peak COVID and everyone was like, right, stimmy
(28:12):
checks are coming, let's do this.
And I remember that was an absolute, to your point,
catastrophe listing. I think they, I think they sunk
like was it 8090% something likethat shortly after listing?
Oh yeah, that was a tough. Yeah, it was those ones.
I think the other another not not comparable company, but
another very well hyped company was Rivian.
(28:34):
They were IPO did about $100 billion valuation writing off
the coattails of Tesla and yes, sank about 95% and you started
to realize that this thing is this thing, it's more than just
a little bit frothy. So IPO markets, they haven't
bounced back and they're not, they're not at the level that
they have been if you look at a kind of historical last 2025,
(28:56):
thirty years, but they are certainly more normalized than
they were in 2021. A lot of private equity firms
and and other investors would prefer them to be a little bit
more attractive, a little bit more buoyant, but they're not.
They're not closed and they're not dead.
OK, cool. Well, look, there's, I know
(29:17):
there's some other companies. Why don't you give me the top
headlines from some of these other big names?
Yeah. I just want to give you, yeah, a
few. I'm actually going to start by
an update. I'm going to kind of go through
four or five companies from companies that have already
listed through to companies thathaven't even priced yet just to
give you that kind of productionline.
So we mentioned Core Weave. So Core Weave IPO D back in
(29:39):
March to the $40 IPO price, share prices hovering around $64
at the time of recording. So it's had a pretty nice pop.
Remember that cool Weave IPO? They had to decrease their price
range and they had to decrease the amount that they wanted to
raise due to the fact that investors just didn't like the
(30:01):
dynamics of the company as much as maybe the IPO bankers were
thinking. But you know what?
It's had a pretty decent run. I still, as I said on previous
podcasts, I still wouldn't touchit because of the amount of debt
the company has in in its in itscapital structure.
So that's a company that IPO owed in March, a company that
(30:22):
IPO owed in April company calledAspen Insurance.
This is an the reason why I wanted to bring this up is it's
a private equity Apollo owned company that raised 300 and
$97.5 million at $30 apiece, right in the middle of its
target range. This was on the 8th of May
actually it valued the insurer at $2.76 billion.
(30:46):
That was its market cap. This is interesting because
Apollo took Aspen private in 2019, six years ago and paid
$2.6 billion. So when you're doing your money
on money, your multiple of invested capital, your IRR, I'm
sure they would have had very, very good ways of structuring
(31:06):
the deal etcetera. But that's not a great, that's
not a great win for Apollo unfortunately.
So you know, bear that in mind when we talk about private
equity and the exit opportunities in the valuation
environment that we do a lot of teaching on.
Couple more Hinge Health. So Hinge Health has been priced
so Hinge Health target 3 billionvaluation as IPO market signal
(31:31):
comeback. That was the headline.
So it's targeting a valuation ofabout 2.6 billion, raising over
437,000,000. That's a decent valuation.
But again, it's Series E fundraising round.
So startup fundraising, seed series, ABCDEF, depending on how
(31:51):
much you have to, you have to raise that value the company at
$6.2 billion. So this is so interesting, these
hypey, hypey, frothy valuations in the venture capital space and
in the private equity space, these VCs, the likes of Tiger
Global and Cotu, who invested inthe Series E of Hinge Health at
(32:13):
6.2 billion, they're now saying,look, we just have to take the
hit, right? We just have to get something
out of this. We valued this thing all wrong.
We valued it at 6.2. We just got to get this thing
off our books and we need to recycle some of the cash, right?
And we're just going to IPO at 2.6 and hope, you know, they'll,
they'll keep a stake in the company through IPO and into the
(32:36):
public market and hope that thisthing really, really pops when
it, when it launches. And then the last one, which
hasn't been priced yet is Figma.And if you remember, Figma was
about to be acquired, if you remember, this was about to be
acquired for $20 billion by Adobe, but then it got blocked
by antitrust. I think we covered it maybe this
(32:58):
time last year. And again, expectation is that
this IP OS going to go out well below $15 billion.
It's still going to be a big IPO.
But again, I'm just trying to kind of paint that picture that
yes, IP, OS are happening, but there's a real, there's a real
dislocation between valuation parameters in the private
markets, especially during that 2122 or 2020-2021 frothy space
(33:25):
and now the cold hard reality ofsophisticated long only equity
investors in public markets going your 6.2 value at a
billion dollar valuation, what was that all about?
What were you smoking? We're going to slap a $2.6
billion number on it. Perhaps we could talk about the
(33:45):
UK just for a moment before we talk about league tables because
I know Revolute is 1. I keep reading about a lot and
that's, that's going to be a bigone, right?
It's going to be a big one if ithappens.
And I worry with all of these upcoming UKIPOSI just worry that
something will happen which means that the likes of
(34:08):
Revolutes and the likes of Xian will find a really good excuse
or will be lured into another market.
And I just, I want to give you some very, very sorry context.
The London Stock market, you know, we've spoken about Japan,
we've spoken about Asia, we've spoken about the US.
The London Stock market saw justfive new listings in the first
(34:28):
quarter of 2025, raising $74,000,000 in prices 74,000,000
lbs. Sorry, I do it.
I do the marketed disservice. I mean, that's pathetic.
That is a good good compared to the American, compared to the US
which raised not 8.9 billion, compared to Japan which raised
(34:50):
3.4 billion. We have raised on the London
Stock Exchange, previously the most fertile, largest Stock
Exchange in the world. We've raised £75 million.
Quick question. Then you get appointed your
phone, your mobile's ringing right now and the PM goes,
right. Stephen, I've heard the podcast
(35:11):
You're the Man, Fix this for me.What's the first things that you
think to go to to fix this problem?
To fix the problem of a well, I tell you what, and this is very,
very live and in the news at themoment, there is a big push for
UK pension funds, the biggest pool of capital available in the
UK, all of our pension assets, pension money, investable
(35:35):
pension money. There is a big call that a
minimum percentage of these pension funds assets should be
dedicated to UK listed companies.
Now classic supply and demand piece.
If you're suddenly saying, all right, you're going to have to,
(35:55):
you know, at least 15% or at least 10% of the assets under
management or the asset ownership of these pension funds
have to go into UKPLC. That is going to change the
game. Like not necessarily overnight,
but almost overnight because youhave liquidity and you have
demands and that is going to push valuations up.
(36:15):
Why do people, why would a company choose the US over the
UK? Liquidity and valuation, right?
Yes, there's a little bit of regulation and you can, you
know, you can maybe soften some of the listing requirements in
the UK as we've discussed on previous episodes.
But the one that will really move the needle is just cash
(36:36):
flowing in mandated so that you're like, all right, here we
go, the UK is back. That's what I'm making thought.
You heard that, Kia. Come on, give Stephen the the
call up your side hustle here next to the UK.
All right. So just to wrap then, let's talk
about the league tables and perhaps not just the names, but
the division of revenue at some of these banks would be great.
(37:00):
Yeah. So this is the equity capital
markets teams with sitting within the investment banks of
the large kind of investment banks and the names that you
that are mentioned you probably and definitely would have heard
of. So taking a look at the
Financial Times investment banking league tables is a very
good place to go. And I'm looking at fees from
(37:21):
equity capital markets transactions.
So, so far, year to date, Goldman Sachs is in the lead
bringing in $295 million of feesacross equity capital markets.
Now very helpfully, the Financial Times also split those
fees out into the different types of products that or the
(37:44):
different types of originations that happened within equity
capital markets. And 55% of the fees for Goldman
Sachs came from follow ONS. Now follow ONS aren't nearly as
sexy. They're not as hard to do, but
they are additional equity raises from an existing publicly
listed company, right? You don't just IPO and then
(38:05):
that's it. 55% of their fees were from follow ONS, 19% of
their fees were from convertibles.
So convertible bonds get like debt, but converts into equity
at a certain strike price. So that's 19%.
And then the other 26 were IPO proceeds.
What's quite interesting is 26% of Goldman Sachs's fee revenue
(38:31):
was IPO proceeds. But then if you actually look at
the deal values, only 14% of Goldman Sachs overall deal value
was IPOs. So what's this?
Tell me that the fees per dollarof deal value for IPOs are much
higher than the fees per dollar value for convertibles and for
(38:53):
follow ones because it's more complex, because it's harder,
you have to go through the book building process, the roadshow,
etcetera, etcetera. So just take a look at those
tables if you're interested. You've obviously got the likes
of Goldman Sachs, JP Morgan, Goldman Sachs is 45% up in terms
of deal values year on year. JP Morgan, Morgan Stanley, Bank
(39:15):
of America, Barclays, Citigroup,UBS and BNP closing out the top
8 and very, very similar story if you looked at this time last
year as well. So those are the banks that are
the main movers and shakers in terms of the league tables for
equity capital markets. And just just to add 1 layer of
context then. So I think people would probably
(39:38):
assume that Goldman's JP would top these types of things just
given their presence and magnitude in terms of size.
What does that league table looklike in terms of this from this
time last year? Like, who are the movers and
shakers? Like who's actually making hay
when? Who's actually falling behind?
Yeah, it's a good point. I mean, Goldman, this time last
year, actually, I'm going to take it for the whole of 2024.
(40:01):
Goldman's, they were third. Goldman's are now first.
JP Morgan were first, JP are nowsecond, Morgan Stanley were
second, they're now third. So there's been a little bit
again, it's kind of like the Premier League, right?
You get the same. Few players.
I'm a Nottingham Forest fan, so I don't know what the equivalent
of Nottingham Forest breakout season barging into the top six
(40:25):
or seven in the table. It's TD Securities.
It's TD Securities. I've had an absolute flyer and I
haven't, it really is TD Securities.
I have no idea why they're there.
They're 143% up change in fees versus previous period.
I'm going to go away and have a little investigate.
But batting with the likes of Bank of America and City, so
(40:47):
although you know they might, you would naturally assume that
that percentage is from a low base, which I'm assuming it is.
But they're now at a level within just, what, 12 month span
of up there with the Bank of America of the world.
Yeah, absolutely. They brought in $184 million of
fees so far this year, which is above City and Barclays and just
(41:07):
below Bank of America. So yeah, obviously a few big
deals. I can't, you know, I'm going to
have to have a look into TD Securities, the Nottingham
Forest of the equity capital markets league tables.
There you go, there you go. You never thought you'd hear
that on this episode. So all right, well, look, I know
if you've listened to the end, thank you.
I hope that was really insightful.
(41:28):
And what I'll try my best to do,time and skills permitting, is
try and bring in some of the charts.
I know there's been quite a few comments on if you watch this on
YouTube to bring up the charts when Steve is discussing some of
this stuff. I'll give it a go, but a lot of
this editing I'd love to say is done by my my podcast team.
(41:50):
But yeah, I don't have 1, so it's just me.
And if I can work it out, I willadd it.
If not, I'll find some other ways to do it.
So yeah, bear with me, but we'llhave this episode out there and
we'll try and do that in future because I know a lot of people
have asked for it. But thank you for watching.
Remember to subscribe to the channel if you don't already do
so and share this with a friend.Really love to get this out as
(42:10):
many people as possible. And yeah, have a great week
ahead. Thank you, Stephen.
Thank you, Anne.
Hello and welcome back to the Deal Room.
And today we are doing the stateof the IPO market in 2025 and
you're going to hear about big names.
One of the biggest in fact in last week has been E Toro.
And I've got to give a quick shout out to Sam NI know you
listen Sam. Sam is a former member of the
Amplified team. He is the lead face nowadays of
(00:22):
E Toro in terms of their training Academy.
And Sam, you know, I hope you'regetting your little slice of
that IPO action because you deserve it, brother.
So well done to to Sam and the teammate E Toro.
But yeah, really interested to hear Stephen, your thoughts on
that one. Then there's there's a few
others, there's Hinge, Health Figma, there's the update on Cor
Weave. There's lots to go over, but
(00:43):
more so really want to put this into context of the year to date
performance because we talk about M&A in the last few
episodes quite a lot. We haven't talked about IP OS in
a while, but I know we start talking then about cross-border
listings, specs, PVCIPO LED typeof activities.
And then because of a lot of people who listen are thinking
(01:04):
about careers and finance want to tie this back to the
investment bank league tables. Who are the winners, losers,
Who's really performing well? Who's which banks are really on
the pulse of some of these biggest listings?
And then what does that look like in the composition of
revenue within an equity capitalmarkets division within a bank?
So perhaps best place to start, Steven?
(01:26):
Well, first of all, where are you?
You have you got a new office? Is this your new work office or
what's going on? Yeah, I mean, so not not unlike
etoro who just had a very successful IPO, Amplify is doing
very well as well. So I'm in a hotel.
You might have heard of the Mandarin Oriental.
I don't know if you. So it's a little bit like the
(01:48):
Mandarin Oriental, but it's a Premier Inn.
We actually, I'll tell you why. I'll tell you why I'm in a
Premier Inn. It was because we were at an
event last night. The girls are investors network.
It was a summary of the internship preparation course
that we do. So shout out to everyone who
(02:09):
listens that has been part of the kind of game Network.
It's a fantastic charity, fantastic organization.
So I was there last night chatting about all sorts of
different things, getting peopleonto the podcast.
I think I must have shared your face on the on the podcast tile
about five times That basically what I do these days.
(02:31):
So yeah, it was good fun. Well, thanks mate.
So, so let's, let's talk about, I guess let's set the scene and
let's talk about the IPO market overview year to date because
you know, we're, we're five months in now.
Yeah, this is a, this is a really, really good one.
And I think it's a, it's a fantastic representation of the
(02:52):
need to go a couple of layers deeper to understand the driving
forces of high level statistics.So I can give you the
performance metrics of the global IPO market and I can say
that in Q 12025, there were 291 IP OS raising $29.3 billion
(03:15):
globally. That was the third highest on
record after 2021 and 2015. And in particular, let's focus
in on the US because that's obviously the area that we we
speak about quite a lot. So Q 1/20/25, third strongest IQ
one IPO performance in history. I'm just looking at the data
(03:36):
here and there were 61, sorry, there were 62 IP OS in the US in
Q 12025 compared to 41 IP OS in Q 1/20/24.
So that is an increase of 51%. And from a superficial
perspective, you're thinking to yourself, wow, the IPO market is
(04:00):
back gangbusters, here we go. Now I'm looking at the same
chart on the right hand side of the chart.
It's it's the same, but it's talking about year on year
change in IPO proceeds. Remember the volume of IP OS was
51% up. The change in proceeds is only
2% up. Now this is where it gets
(04:22):
interesting and important. So lots more IP OS, but the size
of the IP OS are a lot smaller. So what's going on?
You probably haven't had too many headlines about, you know,
multi billion dollar IP OS and that's because the vast majority
of these IPOs in the US have been based on either micro
(04:48):
listings from predominantly Chinese companies.
And I'm going to talk about thatin a second and special purpose
acquisition companies, SPAC IPOs.
So which one do you want me to talk about first?
Do you want me to talk about SPAC IPOs or do you want me to
talk about micro listings? Come on.
Come on up. Yeah.
Well, the these, these are greattopics because I think not
(05:08):
everyone's going to be familiar with these.
So perhaps look, we'll we'll go to SPAC second.
So let's go micro first, becauseI've never really heard of that.
This is super interesting. So if you go, I'm just with
another one of my tabs, I'm juston the NASDAQ IPO calendar
website and I'm looking at the, all of the IP OS that happened
(05:30):
in April 2025 and the and, and I've and I've ranked it from
offer amounts. That's how much they raised in
their IPO, right? So at the top is a company
called Smart Stop self storage real estate investment trust.
(05:51):
So that's a, that's a REIT, that's a not a spat, that's not
a, not a, not a micro raise. Then Shaggy Holdings at 411.
Below those two IPOs, there are a raft of SPAC listings, Berto
Acquisition Corp, New ProvidenceAcquisition Corp, Titan
Acquisition Corp, Citi Acquisition Corp, Inflection
(06:14):
Point Acquisition Corp, all raising a good amount of money.
But then you go to the next kindof run down below the
acquisition corps and then you've got I'd say at least half
of the April listings under $15 million raised on the NASDAQ.
So this is Kaprina Holdings, Cayman Limited, Top Win
(06:35):
International Energies Group, TMD Energy, Bell Life Holdings,
IO3 Limited, Master Beef Group, which I'm sure you've heard of
Ether Holdings, Pinnacle Food Group, etcetera.
So what the heck is going on? What are all of these micro?
What are all of these micro IP OS?
(06:55):
So I looked into a few of these micro IP OS, because this is,
this is an area that wasn't immediately familiar to me.
And these are big companies, butthey're IPO ING, just a slither,
a really, really tiny slither. So Pinnacle Food Group, for
example, it's a 5 billion revenue company, but only weighs
(07:16):
$7,000,000 on its NASDAQ IPO. This is not a kind of ringing
the bell Mecca IPO situation. What transpired.
And This is why I would always encourage people to to look
below the surface level information.
What basically happened is at the end of April, NASDAQ changed
(07:38):
its rules on micro listings saying that you need to raise a
minimum of $15 million and thereneeds to be a number of
different number of different elements to getting you listed.
It needs to be a certain percentage of your overall share
capital. So basically blocking this route
(07:59):
to companies, in particular Chinese companies and
cross-border companies, basically getting into the
NASDAQ almost through the back door with a micro rays.
And remember, once you've once you've IPO D, that opens up the
US public markets investment to all of these companies.
So it's, it's super, super interesting that you would never
(08:21):
hear about all of these companies that I've mentioned,
but they formed a very, very long tail.
And because the rules have been changing, they've you'll see it
in January, April, January, February, March and April,
you'll see these micro sub $10 million listings getting in
before the rules change. So let's take a look at Q2 when
(08:44):
it comes out and I can, well, I can't guarantee you, but I
reckon that the number will be pretty flat quarter on quarter
or year on year. So how, how much of that money
then do we know is like Chinese money in terms of how, how, you
know, looking cloak and dagger? Is it China?
Is it the bankers in China having some sort of dialogue and
(09:06):
there's some sort of flow that'scoming and they want access.
And so the bankers are going outdrumming up business, knowing
that they've got this demand. They're like just trying to
piece together like, where is this demand coming from?
Is it companies wanting to raisemoney or is it companies that
there's just the bankers lookingto make deals?
Yeah, companies looking to raisemoney.
(09:28):
It's so interesting and and I think you're right with your
kind of your cross-border analysis.
So I've just got a little snippet from the FT 53 of the
past two quarters listings were from China and Hong Kong.
And these were all pretty much all I think 51 of the 50, three
were micro micro listings. So who and this is, and again,
(09:49):
it's, it's about circumventing the rules, but it's also about
getting into getting a foothold in the in the US market in a
very, very tariff heavy environment or very uncertain
and volatile environment. And what's really interesting
about this, I think you've also mentioned, you know, it's just
that you know, the bank is getting their payday.
When you look at the banks on these tickets, these are not the
(10:12):
big investment banks, right? I would say the minimum clip for
Goldman's to represent a companyas lead book runner on an IPO,
it's probably 8 to $10 million. These companies are only raising
$7,000,000, so they're tiny little banks that are helping
them get this listing away. And that's in part because you
(10:33):
don't need to do the book building process to the same
extent, right? If you're raising $7,000,000,
you don't need too many IPO investors to come in.
It's also partly because the listings rules up until April
11th of this year were a lot looser on micro IPOs, so the
full S1 prospectus didn't need to get written in the same way.
(10:55):
So you don't need the big investment banks.
So, yeah, it's a really, really interesting dynamic and one that
probably we will see in Q1 of 2025, but we'll maybe never see
again in the way that in the waythat it's represented in the
numbers. Just in terms of actual names
then as these names people wouldstill be familiar with in terms
(11:16):
of who does take these deals at this micro level.
Well, I tell you what, I'd neverheard of some of these
organizations. I'm trying to fight them now in
my, in my notes. I yeah, really, really small
boutiques I would say, and maybebit and maybe specialist
boutiques that are geared towards this kind of
(11:38):
cross-border small IPO market and will probably take a kind of
10% fee, you know, 5 to 500 K to$1,000,000.
So it's not probably an area to go hunting with regards to your
graduate job. Let's just let's just be honest.
It feels like these guys are more like, you know, like a a
(11:58):
visa specialist where like they,they understand the process
really well and the regulatory environment and they're just
like, yeah, we've got, we just write, rinse, repeat, bang,
bang, bang, high volume. Whereas Goldman's is much more
stuck in right, doing these massive complicated deals.
Yeah, it's interesting. I think I think you're
absolutely right. And I'm just looking again at
(12:18):
the volume of these sub $10 million deals again mainly,
mainly Chinese companies. And yeah, it must be a rinse and
repeat because they were, you know, again, as I said, I think
it was 53 companies in the last two quarters.
If you if you IPO 53 proper, proper IP OS, full fat IP OS in
(12:39):
two quarters, that is, you know,that will be a world
record-breaking couple of quarters, right, You know, in
terms of in terms of fees for the banks and things like that.
So, so yeah, I think, I think the Visa sponsorship model
probably it's closer to the truth than the full fat IPO
process that we've spoken about.Cool.
All right. Well, look, you did mention the
word SPAC, just conscious of some may not know what SPAC is
(13:03):
first. So maybe it's just a quick
definition of what that is and then how that plays into this
IPO situation? Yeah.
So special purpose acquisition companies, it's super
interesting that we've covered them on the podcast before, but
they have they had this SPAC IP OS had this absolute breakout
year in 2021. And in my note, you will see a
(13:24):
chart that looks at the IPO Market Volume of IP OS year on
year for the last 10 years. And 2021 is about is a
skyscraper on the bar chart about 10 times higher than any
other year, Thanks, thanks largely to this breakout year
for special purpose acquisition companies.
And very, very quickly special purpose acquisition companies
(13:47):
are acquisition vehicles. They raise money through an IPO
and have that capital, that equity capital, and they are
given two years to go out and find a normal company to merge
with and then take that company into the public markets through
(14:08):
that publicly listed acquisitionvehicle.
That process is called a SPAC merger or AD SPAC when it starts
becoming a special purpose acquisition company and actually
ends up trading as the name of the company that it's acquired.
And there's been lots of D specsover the last few years.
I just wanted to mention, I think we mentioned this on the
(14:29):
podcast a few months ago. Oclo which is the nuclear energy
start up backed by our best friend Sam Altman closed it's
SPAC merger and therefore despacin May 2024 and it's now trading
at around $32 a share, more thantriple it's SPAC IPO price of
(14:50):
$10 a share. So, you know, love them or hate
them, special purpose acquisition companies are not
going away. And they are a alternative way
of private companies getting AUSpublic listing.
And obviously the benefit for the private company is that it
don't have to go through the really, really messy S1
(15:14):
prospectus filing, underwriting,book building, IPO launch.
Is it successful? Is it unsuccessful?
They're kind of sneaking throughthe back door, right?
And it's, it's so interesting tosee this market rebound because
again, going back to 2021, we know that this was a bit of a
wild, Wild West for SPAC's. All sorts of rubbish, quite
(15:38):
frankly, was being, was being acquired through the back door,
was being IPO through this back door mechanism.
And SPAC's took a bit of a, a bit of a reputation blow because
you know, you might have invested in one of these SPAC
acquisition vehicles. They, you know, that SPAC
company, that SPAC acquisition vehicle would have bought a
(16:00):
pretty rubbish company and then your $10 a share would have
dropped to $0.50 a share. And you're thinking, well, this
is a bit of a bit of a racket. But they bounced back and they
accounted for 43% of all USIPOS in, in, in Q1, which is, which
is quite, quite meaningful. And the reasons why this spec
(16:23):
market has SLUT has started to mature a bit.
Gone are the heady days of just putting anything into a SPAC,
putting anything into a SPAC merger.
There are actually some really quite good companies that are
being sought after by the SPAC IPO acquisition vehicles.
So again, it's, it's one of these things you get that, what
(16:43):
is it? Is it the hype cycle, the
Gartner hype cycle? You get the, the, the hype and
then you get the through of disillusionment and then you get
the industry maturity. And I think that's probably what
we've seen over the last three years.
You've had the mega high, you'vehad this horrible through of
disillusionment. And now we're just starting to
see a slightly more rational market where more credible
(17:06):
investors or more credible acquisition vehicles are getting
set up by really, really credible organizations and
investors and actually finding some quite interesting targets.
And I think hope close not a badexample.
It's, it's, it's a, it's a pretty legitimate company to
take into the public markets. OK.
(17:27):
So, so far it's all been quite US centric.
I just wondered in terms of IPO activity, what's it looking like
elsewhere geography wise? Yeah, absolutely.
So let's let's cover some other markets.
Asia Pacific has had an interesting Q1.
So 118, sorry 116 IPOs across Asia PAC relative to 118 at this
(17:55):
time last year. But the IPO proceeds, unlike the
US, the IPO proceeds are up 87 percent, 10.9 billion IPO
proceeds relative to 5.8 billionin Q 1/20/24 bearing in mind
that 10.8 billion in Asia PAC is2 billion more than in the
Americas. So again, we have our US centric
(18:18):
view because that's what people find quite interesting.
But Asia pack has been flying and Asia pack has been flying in
part due to Japan. And I've me and you used this
used deal logic quite a lot as asource of information.
They have this lovely map and that illustrates represents all
(18:39):
of the investment banking and deal data.
And I'm just having a look at itat the moment.
We've got Asia X Japan. This is year to date IPO
proceeds, Asia X Japan up 12%, not bad.
Australasia up 14%, but less than $100 million of IPO
(19:00):
proceeds. So don't worry too much about
that. Japan up 404%.
So this is really interesting. Japan, as we've spoken about
before in the context of privateequity deals and the, the
opening up and the, the renewed interest in Japan has an economy
(19:22):
as it moves out of its deflationary cycle.
And you know, it's, it's an economy that's really, really
worth paying attention to. And there's a lot of activity
going on and $3.4 billion of IPOproceeds in Japan alone.
It's pretty interesting. It's definitely one to watch and
(19:43):
it and it and it kind of makes up for a pretty limp performance
across the rest of Asia. Just a question then.
Is there any useful information when you start to peel off a few
layers and start looking at, well, what actual types of
companies can we categorize intosectors?
So within these geographies, there's different stuff from a
(20:06):
macro perspective going on. What's going on in, like you
said, Australasia or Japan or Europe are all yes, impacted to
a large part by the ongoing US China conflict, but they all
have their own unique situations.
Happening economically. So I just wondered is there any
like any like signals in the tealeaves of like when?
(20:26):
What are these companies? Do they all fit within one
sector? Is it very spread?
Is it quite diversified? Is there anything we can get a
read from from the sector bases?Yeah, it's a, it's a really
interesting one. I'm, I'm just going to go back
to the US because that's unfortunately where I've got
most of most of my data. But, but if you look at the US,
(20:47):
the majority of IPOs so far thisyear have been in technology,
TMT technology, media, telecommunications and health
and life sciences. So health and life sciences
obviously is a very enduring sector in the US and it's always
been a pretty fertile ground forIPOs because quite capital
(21:10):
intensive the the IPO market understands or public market
investors understand health and life sciences especially
interesting breakthrough, you know, biotechnology, biopharma,
pharmaceuticals, etcetera. There were also 8 energy IP OS
again, are we reading the tea leaves?
(21:33):
But this is again, these these are pretty core US focused
industries that may be trying tokind of gin up US focused
investments and maybe a try to protect themselves against the
volatility by raising a bunch ofmoney now instead of into the
(21:54):
future. Who knows?
I would have to do a little bit of digging to see whether that
proportional split across TNT, health and life sciences,
energy, etcetera is has been different throughout the last
few years. But yeah, I mean, if this is
something that students are interested in, the data's there,
the tea leaves could be could beinteresting.
(22:17):
I think maybe what would be moreinteresting or at least of equal
interest is the timing, right? So you have this, I don't know
what the best analogy is, but you have this kind of this, this
traffic jam or this production line of IP OS that are ready to
(22:39):
go or almost ready to go. And you can see, you know, if
you look at any report, you can see IP OS that are mooted to
happen, slated to happen in 2025, then IP OS that have
actually been priced, then IP OSthat have actually been
launched. So it's kind of this production
line And so interesting the timing of some of these big IP
(23:02):
OS. So for example, etoro, we'll
talk about etoro in a second. Etoro was about to go on April
the 4th, I think it was. And then obviously there was
Liberation Day. And then they were like, no, no,
no, no, I'm not going. I am pausing.
And that was exactly the same Figma.
It was exactly the same for a number of other IPOs.
They were like, all right, we'requite interested and we actually
(23:25):
need to IPO this year. But as soon as April the second
came along, you had four or fivebig IPOs coming off and saying
no, we're just going to wait a little bit.
We're just going to see what happens.
The likes of StubHub, Klarner, they were all going to go in Q1
or Q2 and they've decided probably just going to wait.
(23:46):
And this is actually why to an extent you see this very very
unbalanced IPO picture where youknow there are only a few proper
IP OS and the rest are SPAC's and micro listings.
Yeah, there's probably a good segue thing talking of SPAC's,
because I was, I was just havinga quick look.
I do remember the the valuation I think of E Toro was north of
(24:07):
10 billion and they were going to go public virus back.
I think that was during the bootthe peak of the the tower as you
said when that 20/21/22 it must have been.
But yeah, talk, talk to me aboutit feels like those currents
definitely E Toro, as you said, they they couldn't have timed it
better with this current market rebound and crypto move.
(24:29):
Yeah. And and you know, the current
market rebound in terms of crypto Coinbase going, going
great guns, which I think it's probably it's its closest
competitor. I think it's up cord best is up
50% in the last month. Slapped myself on the risk for
selling all of my core based shares about 8 months ago.
But anyway, that's, that's by the pie.
(24:50):
So etoro, you're absolutely right.
In 2022, Etaro was going to go public through a SPAC merger at
a $10 billion valuation. Now that was scrapped due to
market uncertainty, 2022 interest rate hiking cycle
wheels slightly coming off the SPAC market.
And I think owner and and etoro who IPO last week priced at $52
(25:16):
a share, which exceeded its slated 46 to $50 range raised
about $620 million at a market cap of about $5.5 billion.
So that's a pretty significant haircut based on what was going
to be a $10 billion valuation in2022.
(25:37):
And you might be thinking to yourself, oh, these guys are
suckers. You know, the the founders and
the early investors, they could have cashed in at $10 billion
and all they've waited another three years and they're only
pricing it at $5.4 billion. But this is a really, really
important point when it comes tovaluation negotiation in in any
(26:01):
startup or any company that's looking to raise money, it's not
always prudent to raise at the very, very, very highest top of
the market, most frothy valuation.
You know, yes, you might be ableto sell some of your shares at
that frothy 10 billion valuation, but we know that
momentum is very, very important.
(26:23):
And if that SPAC had gone out at$10 billion and it started to
drop, started to plummet, started to plummet, these, these
kind of these momentum plays have a bit of a mind of their
own. And you could easily see this
dropping well below $5 billion even before the lock up period
of the initial investors in etoro and the founders of etoro
(26:47):
even before that lock up period ended.
So you know, you have to, it's sometimes prudent to go, hey,
look, we'll take, we'll take 5.4billion, right?
We'll price it conservatively, we'll raise a decent amount of
money and then we'll see what happens with the stock over the
(27:08):
next three months, six months, year, 2 years.
And you know, let's just take a look at etoro stock, $52 a
share. That's what it was priced.
It ended the day up about 34%. I don't know what it is at the
moment. I think it's probably around 70
bucks. So this is just a story of, you
(27:28):
know, having a little bit of patience, having a little bit of
prudence, not just going for thebig, you know, shiny $10 billion
number through a slightly volatile spec.
And actually look, you know, as your your ex colleague will
probably attest, I think the mood music in the Torres
probably quite good. Oh yeah, he's dropped me a few
texts, but yeah, well, one otherthing, I was just looking at
(27:52):
Coinbase, just to your point, that behavioural kind of finance
element. I remember, I think it was 21.
So when it was all like, you know, where's the next stop for
Bitcoin with 1,000,000 type talk?
And, you know, and the listing of Coinbase was coming.
This was when Deliveroo was coming.
So this was like peak COVID and everyone was like, right, stimmy
(28:12):
checks are coming, let's do this.
And I remember that was an absolute, to your point,
catastrophe listing. I think they, I think they sunk
like was it 8090% something likethat shortly after listing?
Oh yeah, that was a tough. Yeah, it was those ones.
I think the other another not not comparable company, but
another very well hyped company was Rivian.
(28:34):
They were IPO did about $100 billion valuation writing off
the coattails of Tesla and yes, sank about 95% and you started
to realize that this thing is this thing, it's more than just
a little bit frothy. So IPO markets, they haven't
bounced back and they're not, they're not at the level that
they have been if you look at a kind of historical last 2025,
(28:56):
thirty years, but they are certainly more normalized than
they were in 2021. A lot of private equity firms
and and other investors would prefer them to be a little bit
more attractive, a little bit more buoyant, but they're not.
They're not closed and they're not dead.
OK, cool. Well, look, there's, I know
(29:17):
there's some other companies. Why don't you give me the top
headlines from some of these other big names?
Yeah. I just want to give you, yeah, a
few. I'm actually going to start by
an update. I'm going to kind of go through
four or five companies from companies that have already
listed through to companies thathaven't even priced yet just to
give you that kind of productionline.
So we mentioned Core Weave. So Core Weave IPO D back in
(29:39):
March to the $40 IPO price, share prices hovering around $64
at the time of recording. So it's had a pretty nice pop.
Remember that cool Weave IPO? They had to decrease their price
range and they had to decrease the amount that they wanted to
raise due to the fact that investors just didn't like the
(30:01):
dynamics of the company as much as maybe the IPO bankers were
thinking. But you know what?
It's had a pretty decent run. I still, as I said on previous
podcasts, I still wouldn't touchit because of the amount of debt
the company has in in its in itscapital structure.
So that's a company that IPO owed in March, a company that
(30:22):
IPO owed in April company calledAspen Insurance.
This is an the reason why I wanted to bring this up is it's
a private equity Apollo owned company that raised 300 and
$97.5 million at $30 apiece, right in the middle of its
target range. This was on the 8th of May
actually it valued the insurer at $2.76 billion.
(30:46):
That was its market cap. This is interesting because
Apollo took Aspen private in 2019, six years ago and paid
$2.6 billion. So when you're doing your money
on money, your multiple of invested capital, your IRR, I'm
sure they would have had very, very good ways of structuring
(31:06):
the deal etcetera. But that's not a great, that's
not a great win for Apollo unfortunately.
So you know, bear that in mind when we talk about private
equity and the exit opportunities in the valuation
environment that we do a lot of teaching on.
Couple more Hinge Health. So Hinge Health has been priced
so Hinge Health target 3 billionvaluation as IPO market signal
(31:31):
comeback. That was the headline.
So it's targeting a valuation ofabout 2.6 billion, raising over
437,000,000. That's a decent valuation.
But again, it's Series E fundraising round.
So startup fundraising, seed series, ABCDEF, depending on how
(31:51):
much you have to, you have to raise that value the company at
$6.2 billion. So this is so interesting, these
hypey, hypey, frothy valuations in the venture capital space and
in the private equity space, these VCs, the likes of Tiger
Global and Cotu, who invested inthe Series E of Hinge Health at
(32:13):
6.2 billion, they're now saying,look, we just have to take the
hit, right? We just have to get something
out of this. We valued this thing all wrong.
We valued it at 6.2. We just got to get this thing
off our books and we need to recycle some of the cash, right?
And we're just going to IPO at 2.6 and hope, you know, they'll,
they'll keep a stake in the company through IPO and into the
(32:36):
public market and hope that thisthing really, really pops when
it, when it launches. And then the last one, which
hasn't been priced yet is Figma.And if you remember, Figma was
about to be acquired, if you remember, this was about to be
acquired for $20 billion by Adobe, but then it got blocked
by antitrust. I think we covered it maybe this
(32:58):
time last year. And again, expectation is that
this IP OS going to go out well below $15 billion.
It's still going to be a big IPO.
But again, I'm just trying to kind of paint that picture that
yes, IP, OS are happening, but there's a real, there's a real
dislocation between valuation parameters in the private
markets, especially during that 2122 or 2020-2021 frothy space
(33:25):
and now the cold hard reality ofsophisticated long only equity
investors in public markets going your 6.2 value at a
billion dollar valuation, what was that all about?
What were you smoking? We're going to slap a $2.6
billion number on it. Perhaps we could talk about the
(33:45):
UK just for a moment before we talk about league tables because
I know Revolute is 1. I keep reading about a lot and
that's, that's going to be a bigone, right?
It's going to be a big one if ithappens.
And I worry with all of these upcoming UKIPOSI just worry that
something will happen which means that the likes of
(34:08):
Revolutes and the likes of Xian will find a really good excuse
or will be lured into another market.
And I just, I want to give you some very, very sorry context.
The London Stock market, you know, we've spoken about Japan,
we've spoken about Asia, we've spoken about the US.
The London Stock market saw justfive new listings in the first
(34:28):
quarter of 2025, raising $74,000,000 in prices 74,000,000
lbs. Sorry, I do it.
I do the marketed disservice. I mean, that's pathetic.
That is a good good compared to the American, compared to the US
which raised not 8.9 billion, compared to Japan which raised
(34:50):
3.4 billion. We have raised on the London
Stock Exchange, previously the most fertile, largest Stock
Exchange in the world. We've raised £75 million.
Quick question. Then you get appointed your
phone, your mobile's ringing right now and the PM goes,
right. Stephen, I've heard the podcast
(35:11):
You're the Man, Fix this for me.What's the first things that you
think to go to to fix this problem?
To fix the problem of a well, I tell you what, and this is very,
very live and in the news at themoment, there is a big push for
UK pension funds, the biggest pool of capital available in the
UK, all of our pension assets, pension money, investable
(35:35):
pension money. There is a big call that a
minimum percentage of these pension funds assets should be
dedicated to UK listed companies.
Now classic supply and demand piece.
If you're suddenly saying, all right, you're going to have to,
(35:55):
you know, at least 15% or at least 10% of the assets under
management or the asset ownership of these pension funds
have to go into UKPLC. That is going to change the
game. Like not necessarily overnight,
but almost overnight because youhave liquidity and you have
demands and that is going to push valuations up.
(36:15):
Why do people, why would a company choose the US over the
UK? Liquidity and valuation, right?
Yes, there's a little bit of regulation and you can, you
know, you can maybe soften some of the listing requirements in
the UK as we've discussed on previous episodes.
But the one that will really move the needle is just cash
(36:36):
flowing in mandated so that you're like, all right, here we
go, the UK is back. That's what I'm making thought.
You heard that, Kia. Come on, give Stephen the the
call up your side hustle here next to the UK.
All right. So just to wrap then, let's talk
about the league tables and perhaps not just the names, but
the division of revenue at some of these banks would be great.
(37:00):
Yeah. So this is the equity capital
markets teams with sitting within the investment banks of
the large kind of investment banks and the names that you
that are mentioned you probably and definitely would have heard
of. So taking a look at the
Financial Times investment banking league tables is a very
good place to go. And I'm looking at fees from
(37:21):
equity capital markets transactions.
So, so far, year to date, Goldman Sachs is in the lead
bringing in $295 million of feesacross equity capital markets.
Now very helpfully, the Financial Times also split those
fees out into the different types of products that or the
(37:44):
different types of originations that happened within equity
capital markets. And 55% of the fees for Goldman
Sachs came from follow ONS. Now follow ONS aren't nearly as
sexy. They're not as hard to do, but
they are additional equity raises from an existing publicly
listed company, right? You don't just IPO and then
(38:05):
that's it. 55% of their fees were from follow ONS, 19% of
their fees were from convertibles.
So convertible bonds get like debt, but converts into equity
at a certain strike price. So that's 19%.
And then the other 26 were IPO proceeds.
What's quite interesting is 26% of Goldman Sachs's fee revenue
(38:31):
was IPO proceeds. But then if you actually look at
the deal values, only 14% of Goldman Sachs overall deal value
was IPOs. So what's this?
Tell me that the fees per dollarof deal value for IPOs are much
higher than the fees per dollar value for convertibles and for
(38:53):
follow ones because it's more complex, because it's harder,
you have to go through the book building process, the roadshow,
etcetera, etcetera. So just take a look at those
tables if you're interested. You've obviously got the likes
of Goldman Sachs, JP Morgan, Goldman Sachs is 45% up in terms
of deal values year on year. JP Morgan, Morgan Stanley, Bank
(39:15):
of America, Barclays, Citigroup,UBS and BNP closing out the top
8 and very, very similar story if you looked at this time last
year as well. So those are the banks that are
the main movers and shakers in terms of the league tables for
equity capital markets. And just just to add 1 layer of
context then. So I think people would probably
(39:38):
assume that Goldman's JP would top these types of things just
given their presence and magnitude in terms of size.
What does that league table looklike in terms of this from this
time last year? Like, who are the movers and
shakers? Like who's actually making hay
when? Who's actually falling behind?
Yeah, it's a good point. I mean, Goldman, this time last
year, actually, I'm going to take it for the whole of 2024.
(40:01):
Goldman's, they were third. Goldman's are now first.
JP Morgan were first, JP are nowsecond, Morgan Stanley were
second, they're now third. So there's been a little bit
again, it's kind of like the Premier League, right?
You get the same. Few players.
I'm a Nottingham Forest fan, so I don't know what the equivalent
of Nottingham Forest breakout season barging into the top six
(40:25):
or seven in the table. It's TD Securities.
It's TD Securities. I've had an absolute flyer and I
haven't, it really is TD Securities.
I have no idea why they're there.
They're 143% up change in fees versus previous period.
I'm going to go away and have a little investigate.
But batting with the likes of Bank of America and City, so
(40:47):
although you know they might, you would naturally assume that
that percentage is from a low base, which I'm assuming it is.
But they're now at a level within just, what, 12 month span
of up there with the Bank of America of the world.
Yeah, absolutely. They brought in $184 million of
fees so far this year, which is above City and Barclays and just
(41:07):
below Bank of America. So yeah, obviously a few big
deals. I can't, you know, I'm going to
have to have a look into TD Securities, the Nottingham
Forest of the equity capital markets league tables.
There you go, there you go. You never thought you'd hear
that on this episode. So all right, well, look, I know
if you've listened to the end, thank you.
I hope that was really insightful.
(41:28):
And what I'll try my best to do,time and skills permitting, is
try and bring in some of the charts.
I know there's been quite a few comments on if you watch this on
YouTube to bring up the charts when Steve is discussing some of
this stuff. I'll give it a go, but a lot of
this editing I'd love to say is done by my my podcast team.
(41:50):
But yeah, I don't have 1, so it's just me.
And if I can work it out, I willadd it.
If not, I'll find some other ways to do it.
So yeah, bear with me, but we'llhave this episode out there and
we'll try and do that in future because I know a lot of people
have asked for it. But thank you for watching.
Remember to subscribe to the channel if you don't already do
so and share this with a friend.Really love to get this out as
(42:10):
many people as possible. And yeah, have a great week
ahead. Thank you, Stephen.
Thank you, Anne.
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