Blockbuster IPO Day Generates Big Profits for Uber, Delta Air Lines and Tech VC

  • SoftBank, Tencent and Uber are all big winners in the IPO for Chinese ride-hailing service Didi Chuxing, which is now valued at close to $70 billion.
  • Cybersecurity company SentinelOne also debuted, producing hefty gains for Insight Partners and other venture firms.
  • The IPOs of Clear, LegalZoom and Xometry benefited a variety of early investors.
  • On a day with more tech IPOs than available bell-ringing slots at U.S. exchanges, investors reaped billions of dollars in gains.

    But the winners extended far beyond Silicon Valley’s venture capital network.

  • Among venture firms, New York’s Insight Partners had the biggest day, thanks to its $1.45 billion stake in cybersecurity software company SentinelOne, while Highland Capital owns shares worth over $500 million in Xometry, a manufacturing marketplace.

    There’s plenty of money to go around for private equity firms as well. Francisco Partners owns over a quarter of LegalZoom, which celebrated by opening on the Nasdaq on Wednesday, and ad tech-company Integral Ad Science is majority owned by Vista. Integral rang the Nasdaq’s closing bell.

    While last week’s IPOs of software companies Confluent and Doximity primarily rewarded familiar venture names such as Benchmark, Index Ventures and Emergence Capital, this crop of deals underscores the thirst for tech across the investing universe. From buyout firms and mutual fund managers to large publicly traded companies, capital has poured into the tech industry, which is playing an outsized role in the broader economy.

    Didi was by far the biggest debut on Wednesday, after the company raised $4.4 billion in its IPO. Its largest investor is SoftBank, which started buying shares in 2015 at a $16.5 billion post-money valuation, according to PitchBook. The firm, principally through its Vision Fund, amassed a stake worth $13.7 billion as of the close of trading.

  • Uber owns an $8.1 billion stake in Didi after ceding China to its rival in 2016 and selling its Chinese business in exchange for Didi shares. At the end of March Uber valued its Didi stock at $5.9 billion.

    Emil Michael, Uber’s former chief business officer, tweeted earlier this week that Uber’s windfall all stemmed from a $2 billion investment.

    “Nearly every stakeholder was against our big investment in China and relentlessly negative about it,” Michael wrote, in one of several tweets about the deal.

  • Chinese internet giant Tencent owns a $4.4 billion stake in Didi after investing as early as 2013. Apple and Alibaba also invested in later years, but they each own less than 5% of the company, so their holdings aren’t disclosed in the prospectus.

    ‘Reduced hassle’ at the airport

    Clear, whose biometric devices help passengers zip through airport security lines, has a market cap of $5.9 billion after its stock rose 29% to $40 in its NYSE debut.

    T. Rowe Price is Clear’s biggest outside investor, with a stake worth $763 million at the close, followed by venture firm General Atlantic at $596 million.

    Delta’s shares are valued at $331 million because of an investment that was tied to a partnership between the two companies. At the airline’s hub in Atlanta, Delta uses facial recognition systems so passengers can quickly board some international flights without having to show a boarding pass or passport. In 2017, Clear began operations at New York’s John F. Kennedy and LaGuardia airports, and it pays a revenue share to Delta rather than paying the airport, according to the prospectus.

    “Our customers tell us their time is valuable, as is having a consistent, enjoyable airport experience with reduced hassle,” said Ed Bastian, Delta’s CEO, in a press statement at the time of the agreement in 2016. “We look forward to what this partnership will bring to our customers.”

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