San José, CA, September 15 2020 (Bizjournals) — Shares of portable dialysis business Outset Medical Inc. jumped by 125% Tuesday after it raised $242 million in an IPO that handily beat expectations.
It opens one of the Bay Area’s busiest periods in years for new stocks being introduced from the region, with five IPOs on the calendar this week, three more in the wings and several others coming by way of direct listings and “blank check” mergers.
San Jose-based Outset Medical sold nearly 9 million shares at $27 each. It was expected to sell 7.6 million shares for between $22 and $24 a share.
It then opened trading at $52 a share after CEO Leslie Trigg rang the opening bell on the Nasdaq exchange, where it traded with the ticker symbol of “OM.” It then rose as high as $61.60 before closing at $60.68. Outset finished the day with a market cap of nearly $2.5 billion.
It was previously valued at around $750 million, according to PitchBook Data, after raising $125 million in late-stage funding in February. Outset’s biggest stakeholders are Warburg Pincus (28% stake), Fidelity (14.8%), D1 Capital Partners (12%), T. Rowe Price (9%), Aurora Investment Co. (9.1%), Partner Fund Management (7.5%) and Perceptive Investors (6%).
Outset Medical sells portable dialysis systems that are used in ICUs and hospital bedsides. Its net loss grew by 37% last year to $68.3 million, despite a more than sixfold increase in revenue to $15.1 million. In the first six months of this year, its net loss grew 41% to $47.2 million while its revenue grew 253% to $18.9 million.
Other IPOs expected this week are from San Mateo-based Snowflake Inc. and Sunnyvale-based JFrog Ltd. on Wednesday, Redwood City-based Sumo Logic Inc. on Thursday and San Francisco-based Unity Software Inc. on Friday.
Tomorrow’s offerings from Snowflake and JFrog are the first by Bay Area-based tech companies since Bill.com’s IPO in mid-December.
Outset Medical’s is the 11th life science IPO of the year from the region.