Oura, the smart ring maker, has decided to postpone its initial public offering, citing current market uncertainty. This decision comes after the company had initially aimed for a significant $3 billion raise and a valuation exceeding $16 billion. The IPO was highly anticipated as a key indicator for the tech IPO market, which has seen a slow September and unsettled buyers due to Fed rate increases and climbing yields.
The company had revised its IPO target, launching the offering with a more modest goal of raising up to $2.2 billion at a valuation of $14.1 billion. This represented a 27% reduction from its initial ambitious targets. Despite this adjustment, the IPO was still poised to be a substantial event, with 50 million shares offered at a price range of $40 to $44. Oura was set to list on the Nasdaq under the ticker symbol OURA, with J.P. Morgan, Morgan Stanley, and Goldman Sachs leading the book.
While Oura had demonstrated strong financial performance, reporting revenue of $1.21 billion for the nine months ended June 30, up approximately 74% year over year, the company's decision to postpone highlights broader market anxieties. The IPO structure also drew attention, as a significant portion of the proceeds, approximately $1.53 billion at the midpoint of the price range, was slated for existing shareholders, with only $567 million going to the company before fees. Forerunner Ventures, a key investor, planned to sell its entire 9.3% stake, accounting for nearly 80% of the shares offered by existing shareholders.
The postponement signifies a cautious approach by Oura, despite strong growth in its subscription-based membership revenue, which more than doubled to $240.5 million and boasted an 89% gross margin. The company had grown to 5.7 million paid members, a 96% year-over-year increase. The decision underscores the challenging environment for new public listings and the sensitivity of the market to factors beyond individual company performance, such as macro-economic conditions and investor sentiment. This move raises questions about the immediate future of other tech companies eyeing public debuts.
