Unity Software ($U) priced its IPO at $52 a share and raised $1.3b. The company set its initial price range at $34-$42, 30% less than its final IPO price. It also reached a valuation of $13.7b, up from $6b in mid-2019.
- Typically, banking companies like Goldman Sachs will set the IPO price of a company after discussions with institutional investors. Unity opted for a different route by soliciting a bid from prospective buyers through an online system managed by Goldman Sachs.
- After the completion of the bid, Unity Software allocated shares to the bidders who expressed interest at or above the increased price level.
- While traditional IPO will lead to first-day pops (Snowflake’s share price increased by 100%), Unity’s shares might lead to a smaller first-day gain as the price was set after gauging the interest directly.
- Unity provides a software platform to develop video games. The company filed for its IPO shortly after Apple blocked rival Epic Games' Unreal Engine from its platforms. That ban was later revoked after a court order.
- Unity generated revenue of $351m in the first half of 2020, a 39% increase YoY.