US-based banking software producer nCino went public in a $250m initial public offering (IPO) on the Nasdaq Global Select Market, providing an exit for enterprise software provider Salesforce’s corporate venturing unit, Salesforce Ventures. The offering comprised 8.06 million shares, priced at $31.00 each, above the $22 to $24 range the company had set. On the first day of trading, the price per share almost tripled to $91.59, valuing the business at more than $8.2bn.
Founded in 2012, nCino has developed an operating system used by more than 1,100 financial institutions. The system streamlines banking practices and provides banks with detailed analytics on their data. The company had increased revenue more than 50% to $138m for the year ending January 31, 2020, while registering a $27.7m loss.
US-based online insurance provider Lemonade, which counts a host of corporate investors, went public in a $319m IPO on the New York Stock Exchange. The corporate backers include internet conglomerate Alphabet, telecoms conglomerate SoftBank and insurance firms Allianz and XL Catlin. The offering consisted of 11 million shares priced at $29.00 each, significantly higher than the range of $23 to $26 it had first set before subsequently upping it to a range between $26 and $28. The IPO price valued the company at over $1.9bn.
Launched in 2015, Lemonade sells property and casualty insurance via an online platform that uses bots instead of human brokers. Lemonade relies on artificial intelligence and behavioural economics to combat fraud. Lemonade takes a fixed percentage as a fee and donates a portion of any unclaimed premiums to non-profit organisations. The company operates in the US, UK and Germany.
Both Lemonade and nCino are part of the broader fintech space, which has received much attention from corporate venturing investors.
The number of exits from such businesses appears to have been somewhat flat in numbers over recent years. However, this year we have already reported 20 exits – considerably higher than in previous years – worth an estimated $15.33bn. This may indicate that fintech is entering a different phase of development and yielding profitable exits. These two IPOs may just back that up.
