Unicorn IPO Parade Continues: The RealReal and Adaptive Biotechnologies File To Go Public
June 10, 2019 | Blog

Unicorn IPO Parade Continues: The RealReal and Adaptive Biotechnologies File To Go Public

Two more unicorns have joined the 2019 IPO bonanza: The RealReal and Adaptive Biotechnologies have both filed an S-1, giving public investors a first view into the financial condition of the companies. These companies exhibit financial characteristics similar to that of other unicorns—revenue growth over 30 percent, with growing expenses. These companies operate in perhaps the most divergent of verticals, but comparing them in the context of unicorn exits may be useful. While the scheduled IPOs come at a time of heightened volatility in public markets and an announced probe into mega-cap tech companies, investors have shown salubrious demand for innovative companies to date.

The RealReal

The RealReal, founded in 2011 and recently valued at just over $1 billion, operates a consignment marketplace platform geared toward luxury goods. While matching a buyer and seller for a given good is a proven business model, those involving the resale of luxury goods have limited historical benchmarks. The tailwinds generated from the perceived allure of luxury coupled with the millennial modus operandi to use internet-based platforms may benefit The RealReal going forward. The company grew revenue 55 percent from 2017 to 2018, reaching over $200 million in fiscal year 2018. That said, total operating expenses grew at a similar pace over the same period; this trend may result in headwinds for the company as public investors look to mitigate risk in periods of increasing volatility.

The RealReal Financials
Adaptive Biotechnologies

Adaptive Biotechnologies takes a novel approach to medicine development. That is, the company seeks to leverage the human “adaptive immune system” to pursue solving our most daunting medical challenges. Their gene-first stature chases treatment of illnesses ranging from cancer to infectious diseases. They peg their potential market at over $48 billion. Revenue grew at a healthy 45 percent from 2017 to 2018, while total operating expenses rose 27 percent, to just over $105 million. Although drug development is an inherently expensive endeavor, current finances hint that the company has competency in controlling costs. Recently, the company received an investment from Microsoft and stated in its S-1 that it will leverage the tech giant’s machine learning capabilities. The company also has a partnership with Genentech to collaborate on cellular therapies to treat cancer.

Adaptive Biotechnologies Financials

These unicorns will likely enter public markets by mid-July and, if they are as well received as the majority of unicorn IPOs this year then, private investors may have something to cheer. Of course, the state of public markets could influence the eventual outcome. As they approach their public debuts, we will continue to monitor these firms, as well as how the private growth asset class as a whole is received by Wall Street.

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This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

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Alejandro Ortiz

Alejandro Ortiz

Alejandro is a Research Analyst, Private Investment Research for SharesPost Research LLC. Prior to joining SharesPost, he was a Valuation Analyst at Duff & Phelps with a focus on TMT industries.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

CONFLICTS

This report is distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation, and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.

This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about the subject matter therein, including all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be during their employ directly or indirectly related to their specific views contained in this report.

Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.