Eargo, a US-headquartered hearing aid developer backed by real estate developer Nan Fung, floated on Friday in an initial public offering sized at approximately $141m.
The offering involved Eargo increasing the number of shares in the offering from approximately 6.67 million to more than 7.85 million and pricing them at $18.00 each, above the IPO’s $14 to $16 range.
The company’s shares opened on the Nasdaq Global Select Market at $36.00 on Friday morning and closed at $33.68 on their first day of trading, valuing it at more than $1.22bn.
Founded in 2010, Eargo has created a high-fidelity hearing aid that is designed to be comfortable and virtually invisible.
The company made an $18.3m net loss in the first six months of this year from $28.6m in revenue, and will spend at least $50m of the IPO proceeds on sales and marketing and $20m on research and development.
Eargo had raised approximately $164m prior to the offering, most recently taking $71m in a July 2020 round that included Nan Fung’s medical-focused investment vehicle, Nan Fung Life Sciences.
The round was co-led by Gilde Healthcare and Longitude Capital and also featured New Enterprise Associates (NEA) and the Charles and Helen Schwab Foundation.
Nan Fung Life Sciences, NEA, Charles and Helen Schwab Foundation, Maveron and Future Fund had supplied $52.1m in series D funding for Eargo in March 2019. The first four had already contributed to a series C round that closed at $54.5m in early 2018.
NEA is the company’s largest investor, with a 17% stake post-IPO, followed by Future Fund, Gilde Healthcare and Longitude Capital (10.1% each), Charles and Helen Schwab Living Trust (7%) and Maveron (4%).
Lead book-running managers JP Morgan and BofA Securities and co-managers Wells Fargo Securities and William Blair have 30 days to buy nearly 1.18 million more shares and lift the size of the offering to more than $162m.
