Connect with us

Crunchbase

Airlines Tap Into The Public Markets As Travel Prepares To Rebound

After a brutal year for the travel and hospitality industry, things are looking up with the COVID-19 vaccine rollout.

Published

on

After a brutal year for the travel and hospitality industry, things are looking up with the COVID-19 vaccine rollout. And as the travel industry prepares for a rebound in the second half of 2021, some companies are tapping into the public markets to raise capital and prepare for a surge in demand.

Subscribe to the Crunchbase Daily

Most notably, Sun Country Airlines and Frontier Airlines, both ultra low-cost carriers, filed to go public in February and March, respectively. Sun Country Airlines, which was owned by Apollo Global Management, made its public debut earlier in March, and Frontier, which was acquired by Indigo Partners in 2013, is slated to begin trading this week.

These airlines are trying to capitalize on investor enthusiasm and pent-up travel demand as vaccine distribution ramps up, according to Patrick Healey, founder and president of financial advisory and wealth management firm Caliber Financial Partners.

“Investor sentiment is driving the appetite for companies to tap into the public markets through an IPO like Frontier or Sun Country,” Healey said. “A lot of the more established airlines like United or American or Delta have done secondary offerings…more as a means to survive the pandemic and sustain themselves into the future when they can start to see more demand from airline travel again. We’re starting to see that again.”

For context, Sun Country Airlines was the first U.S. passenger airline to go public in more than two years, according to CNBC. The public markets reacted enthusiastically to its debut, with its stock opening 51 percent above its IPO price on its first day of trading on March 17. The company raised $218 million through its IPO, pricing its shares at $24 apiece, above its stated price ranges.

Investor interest is shifting away from high-growth companies that benefited from a remote world during the COVID-19 pandemic to industries that suffered but are now due for a rebound, according to Louis Cordone, senior vice president of strategy at AST, a tech-enabled professional services firm. Simply put: investor interest is cyclical.

“As the economy gets back on its feet, as it gets stronger, there are going to be companies that did not perform well during the COVID era, but now they’re poised to do well,” Cordone said. “Restaurants, hospitality, airlines. Everyone who I know who has been cooped up in their house wants to go somewhere badly.”

Additionally, airlines and manufacturing companies have the benefit of using new technologies, tools, and manufacturing methods that have been developed during the pandemic, since that’s where investors were putting their money, according to Cordone. So not only are airlines undervalued, but they’re poised to operate well with the new technologies that have been developed over the past year.

Airlines took a beating during the pandemic, though ultra low-cost carriers like Frontier and Spirit fared better than more expensive, larger airlines. Frontier noted this in its S-1 filing, writing that it incurred about $1 per passenger of debt-related costs, compared to the average of $16 per passenger for “other U.S. airlines of significant size” for debt that was issued between March and the end of 2020.

“Furthermore, we believe that low-cost airlines have historically recovered more quickly than the airline industry overall following past crises, including the 1991 Gulf War, the 2001 Terrorist Attacks and the late-2000s Financial Crisis,” the company wrote. “ In the wake of these crises, low-cost airlines further expanded the magnitude of their superior margin profile and profitability relative to the airline industry as a whole.”

In terms of travel in general, this year is going to be a “tale of two halves,” according to James Hardiman, an analyst at Wedbush Securities who covers the leisure industry. Many people likely won’t be comfortable traveling during the first half of the year, he said.

“Travel bookings—I think we’re seeing this across airlines, I know we’re seeing this across hotel bookings and cruise lines bookings—really do suggest people think they’ll be more comfortable traveling by summertime,” Hardiman said.

The online travel companies and theme parks Hardiman follows are anticipating increased demand this summer, and cruise lines are preparing for the worst, but hoping for the best by lobbying the government to reopen and raising more capital.

“I think it’s safe to say that 2021 as a whole, and even in the summertime, is going to be substantially better than 2020 in terms of the travel industry, but still meaningfully short of where we were in 2019,” Hardiman said.

Of course, the risk remains that a continuation of the pandemic could derail travel companies’ plans for a travel rebound. Frontier noted the COVID-19 vaccine rollout as a risk factor in its S-1 filing.

“We are depending upon a successful COVID-19 vaccine, including an efficient distribution and sufficient supply, and significant uptake by the general public in order to normalize economic conditions, the airline industry and our business operations and to realize our growth plans and business strategy,” the company wrote.

So far, 137 million doses have been given in the United States, according to Bloomberg’s vaccine tracker. President Joe Biden set a goal of administering 200 million doses of the COVID-19 vaccine shots in his first 100 days in office.

One thing to watch, Healey noted, is how business travel will return. It seems clear that there’s plenty of pent-up demand for leisure travel—we could all use a vacation after a difficult, isolating year. But it’s unclear how business travel will rebound now that companies have adjusted to working remotely and conducting meetings over Zoom. If business travel doesn’t bounce back, that could be bad for airlines, as business travel is a more high-margin business than leisure travel.

Healey thinks hospitality companies could piggyback off the airlines’ strategy to turn to the public markets to raise capital, even on a secondary basis.

“There is pent up demand for travel, probably more on the leisure side, and I suspect that some of the hotel operators may want to raise capital now that the worst of it, knock on wood, is behind us,” he said.

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/travel-rebound-airline-ipos/

airlines-tap-into-the-public-markets-as-travel-prepares-to-rebound

Crunchbase

Card Issuer Marqeta Valued At More Than $17B in Nasdaq Debut

Chief Marketing Officer Vidya Peters tells Crunchbase News that the IPO “has been a wonderful validation of the modern card issuing industry.”

Published

on

Shares of Marqeta, an Oakland-based modern card issuing platform, popped on the first day of trading Wednesday, closing at $30.52 per share, up 13 percent from opening price of $27. Marqeta is listed on the Nasdaq Global Select Market under the symbol MQ.

Subscribe to the Crunchbase Daily

Marqeta now has a market value of $17.3 billion, according to Yahoo, which is based on 586 million of outstanding shares.

The company filed in May to go public via an initial public offering. Since its inception in 2010 by Jason Gardner, Marqeta has raised a total of $528 million in known venture capital, according to Crunchbase data. Its last disclosed round in May 2020 valued the company at $4.3 billion.

Vidya Peters, chief marketing officer for Marqeta, told Crunchbase News that the IPO “has been a wonderful validation of the modern card issuing industry and what we have done over the last decade.”

She went on to say that there is a “massive $74 trillion market opportunity ahead of us, which provides an endless runway.”

And, as a payments infrastructure company, being publicly traded enables Marqeta to be transparent on its financial health to stakeholders and customers.

“It also provides a massive arsenal to accelerate our product roadmap and fuel our global expansion,” Peters added. “We are already in 36 countries and now we can accelerate even faster.”

To complement prepaid and debit card offerings, in the past year Marqeta added credit, which Peters touted as being the first company to offer all three.

She also believes this is just the start for what Marqeta can enable with innovative offerings, such as open APIs so that developers can build their own card-issuing products.

“Marqeta is just scratching the surface with cards,” Peters added. “Imagine being able to have your check deposited onto your card, buy now, pay later, peer-to-peer payments and even monetize your cryptocurrency. The possibilities are endless, and in our next chapter we are in a position to unlock all of that with our card types.”

Among the S-1 statement disclosures, Marqeta touts customers, such as Affirm, DoorDash, Instacart, Klarna and Square, which it reported was its largest customer, accounting for 70 percent of its net revenue in 2020.

It reported $350 million in fourth-quarter 2020 annualized net revenue, operates in 36 countries, and has issued more than 320 million debit, credit and prepaid cards to date.

The company reported $107.9 million in revenue for the first quarter ended March 30, 2021, more than double from the same three-month period in 2020. It narrowed its net loss to $12.8 million during the quarter from $14.5 million last year.

Prominent backers include 83North II, Coatue, ICONIQ Capital, Granite Ventures and Discover Financial Services, according to its filings. With the exception of Discover, all of the remaining entities led investments into the company, according to Crunchbase data.

Illustration: Li-Anne Dias

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

The company filed in May to go public via an initial public offering. Since its inception in 2010 by Jason Gardner, Marqeta has raised a total of $528 million in known venture capital, according to Crunchbase data. Its last disclosed round in May 2020 valued the company at $4.3 billion.

Source: https://news.crunchbase.com/news/card-issuer-marqeta-begins-trading/

card-issuer-marqeta-valued-at-more-than-$17b-in-nasdaq-debut

Continue Reading

Crunchbase

ID Verification Company Clear Files To Go Public As Travel Picks Up

If you’ve walked through security at a major airport in the United States, you’ve likely seen signage for Clear, which allows enrolled members to pass through a security checkpoint quickly by scanning their eyes and face.

Published

on

Clear, the company known for using biometric data to verify identities, has filed to go public.

Subscribe to the Crunchbase Daily

If you’ve walked through security at a major airport in the United States, you’ve likely seen signage for Clear, which allows enrolled members to pass through a security checkpoint quickly by scanning their eyes and face.

While it’s perhaps best known for its airport usage (investors in the company include United Airlines and Delta Air Lines), Clear is also used for identity verification and security at live events. The New York-based company reported having 5.6 million cumulative enrollments. Clear is available in 38 airport locations and works with 26 sports and entertainment partners, according to the company.

Among the largest stockholders in the company are Delta Air Lines, General Atlantic, and T. Rowe Price.

Clear is heavily reliant on travel and live events, both of which were essentially put on pause during the COVID-19 pandemic. But even though travel and live events took a hit, Clear still grew its memberships and revenue, and brought down its losses, according to its S-1.

The company reported nearly $230.8 million in revenue last year, up 20 percent from $192.3 million in 2019. Though the company’s total bookings declined 10.6 percent from 2019 to 2020, its net losses shrunk down from $54.2 million in 2019 to $9.3 million in 2020.

The company acknowledged in the “Risk Factors” section that the pandemic limited its growth in airports, the entertainment industry, and events.

“We experienced a decrease in enrollments for our airport service and a decrease in membership renewals,” the company wrote. “In fiscal year 2020, our Annual CLEAR Plus Net Member Retention declined to 78.8% (compared to 86.2% in fiscal year 2019). We expect that COVID-19 will continue to adversely impact our airport enrollments and business in 2021 and possibly beyond.”

Clear also acknowledged that its performance is dependent on the strength of the travel industry, since it “derived substantially all of our historical revenue from members who enroll in CLEAR Plus, which includes our Registered Traveler Program service at U.S. airports, and one of our growth strategies is to continue expanding in our domestic aviation network.”

Goldman Sachs and JP Morgan are among the underwriters for the IPO. The company intends to list on the New York Stock Exchange under the ticker YOU.

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/id-verification-company-clear-files-to-go-public-as-travel-picks-up/

id-verification-company-clear-files-to-go-public-as-travel-picks-up

Continue Reading

Crunchbase

Exclusive: Women’s Supplement Startup Rae Wellness Closes $9.5M Series A

Rae develops supplements targeting women’s well-being in sexual, hormonal and mental health.

Published

on

Minneapolis-based Rae Wellness got a cash infusion of $9.5 million in Series A funding to continue developing its supplements targeting women’s well-being in sexual, hormonal and mental health.

Subscribe to the Crunchbase Daily

PowerPlant Partners led the round and was joined by M13, Able Partners and Victress Capital. Co-founder and CEO Angie Tebbe founded the company in 2019. She did not disclose the company’s total funding to date.

Three years ago, Tebbe was a Target executive with two toddlers when she noticed that her own well-being was not a priority.

“I thought about what wellness meant to me,” she told Crunchbase News. “I grew up in a holistic household and wanted an opportunity to honor that. I left my career to pursue my own well-being and take better care of myself.”

A believer in the power of supplements, she went in search of the right ones for her. During that diligence, she found that either quality products did not exist — many were sugary and gummy — or they were very expensive. That’s where Tebbe said she saw whitespace to create products.

Rae Wellness started out as direct-to-consumer in 2019, but by 2020 was on shelves in Target stores and selling on Amazon. It is also available in Anthropologie and will be in Thrive Market and other retailers later this year, she said.

“We’ve been ramping up fast — it’s a crazy dream come true,” Tebbe added. “We needed a big infusion to get to the scale we want, which includes creating an omnichannel brand.”

The company is going after the global dietary supplement market, which was valued at $140.3 billion in 2020, and is expected to grow at an 8.6 percent compound annual rate from 2021 to 2028, according to market research firm Grand View Research.

In the first year of business, Rae Wellness reached 1 million customers, and Tebbe said the company is poised for triple-digit growth this year. As such, the new funding will go toward that growth of reach, brand awareness and partnerships.

“We are thrilled to see women are putting themselves on the priority list,” she said. “We are continuing the journey to create pure and powerful supplements to support women’s journey to feel better.”

Dan Gluck, partner at PowerPlant Partners, said his firm is tracking the supplement category and that the opportunity is huge, with the U.S. market forecasted to be $50 billion by 2024, as more adults take dietary supplements.

With the increasing concern around health and wellness and clean beauty, companies like Rae Wellness have an opportunity to take market share, he added. By focusing on clean and green brands and ingredients that come at accessible price points, Gluck said Rae is resonating with customers.

“From Angie’s experience as a Target executive, she has an insight that most entrepreneurs don’t have,” Gluck said. “We also loved her vision, passion and enthusiasm, as well as her rationale around building the business into a world-class organization.”

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

“I thought about what wellness meant to me,” she told Crunchbase News. “I grew up in a holistic household and wanted an opportunity to honor that. I left my career to pursue my own well-being and take better care of myself.”

Source: https://news.crunchbase.com/news/exclusive-supplement-startup-rae-wellness-closes-9-5m-series-a/

exclusive:-women's-supplement-startup-rae-wellness-closes-$9.5m-series-a

Continue Reading

Title

Entrepreneur8 hours ago

The Unbearably High Price of ‘Free’

Using the word 'free' in your marketing is a quick way to get attention, but it's also a double-edged sword...

CNBC10 hours ago

RH beats earnings, hikes outlook as retail rebound boosts high-end home goods; shares jump

Shares of the high-end furniture retailer surged Wednesday after the company beat analysts' profit and sales estimates for the fiscal...

Techcrunch13 hours ago

Jeff Bezos’ Blue Origin auctions off seat on first human spaceflight for $28M – TechCrunch

Blue Origin has its winning bidder for its first ever human spaceflight, and the winner will pay $28 million for...

Ventureburn16 hours ago

Spot Money app launches stokvel feature

Spot Money has released a shared wallet feature on their fintech app, Spot to create transparency for shared financial investments...

CNBC18 hours ago

Blue Origin auctions seat on first spaceflight with Jeff Bezos for $28 million

The winning bidder will fly to the edge of space with the Amazon founder on Blue Origin's New Shepard rocket...

Blockchain news1 day ago

Long-Term Bitcoin Holders Keep Stacking While Short-Term Holders Keep Selling

On-chain analyst William Clemente III revealed that long-term holders keep on stacking as short-term holders keep on selling.

Coinpedia1 day ago

Shiba Inu Price Plunge Hard! Should You Buy the Ongoing Dip?

Shiba Inu Price needs to climb back above $0.000007. If SHIB Price is able to break through this resistance, it...

Techcrunch2 days ago

UBS investment makes Byju’s the most valuable startup in India – TechCrunch

Edtech giant Byju’s has become the most valuable startup in India after raising about $350 million in a new tranche...

CNBC2 days ago

GameStop sales rise 25% as retailer chases e-commerce growth, says it may sell 5 million shares

GameStop sales rose 25% in the fiscal first quarter as the company focuses on e-commerce and tries to stage a...

Bioengineer2 days ago

Trial of existing antibiotic for treating Staphylococcus aureus Bacteremia begins

NIH-supported trial will test Dalbavancin in hospitalized adultsCredit: NIAID A clinical trial to test the antibiotic dalbavancin for safety and

Review

    Select language

    Trending