(Bloomberg) — WeTransfer pulled plans for an initial public offering in Amsterdam after a selloff in technology stocks hit investor appetite.
The offering is being withdrawn due to volatile market conditions, the file-sharing platform said Thursday. Last week, the company knocked 20% off its original proceeds target, seeking to raise 125 million euros ($140 million). The proposed IPO had valued the company at as much as 716 million euros.
Read More: Europe IPO Lineup Under Pressure as Volatility Spikes: ECM Watch
Gavin Launder, a fund manager at Legal & General Investment Management, said market conditions were partly behind his decision not to participate in the IPO. He also cited worries that the company “didn’t have any real barriers to entry and concerns that Google and Amazon.com Inc., the owners of the cloud infrastructure, could move in.”
Tech shares have been caught up in a rotation out of frothy growth assets as the prospect of interest-rate hikes pushes bond yields higher. The Stoxx 600 Index’s technology subgroup is the benchmark’s worst performer this year.
“Collaboration plays have become a tricky IPO proposition,” said Patrick Basiewicz, an analyst at broker FinnCap. “WeTransfer seemed solid, but this mistrust, current market volatility and rich offer valuation should not make the IPO withdrawal too surprising.”
A person familiar with the matter told Bloomberg that the company has many options on the table and isn’t ruling out M&A or a potential future listing.
WeTransfer had already tempered its valuation expectations, missing out on the unicorn tag reserved for startups worth more than $1 billion. Shareholders Highland Europe Technology and HPE Institutional Fund II had planned to sell part of their stakes in the IPO.
The company’s decision not to list at this time “in no way changes” Highland’s intention to remain a long-term partner, said Irena Goldenberg, a partner at Highland.
Morgan Stanley and Bank of America Corp. were global coordinators, alongside bookrunners ABN Amro Bank NV, in cooperation with Oddo BHF SCA, and Barclays Plc.
(Updates with possible future intentions in sixth paragraph, comment from shareholder in eighth)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
