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Thierry Rochelle Private Equity on Why Snowflake’s Upcoming IPO Is One to Watch

A spate of new technology stocks may be hitting the market later this year, and Snowflake could be one of them.

Silicon Valley-based Snowflake filed confidentially for an IPO this week, according to Bloomberg, and intends to list its shares in the coming months. The cloud specialist could be one of the larger tech offerings to go public this year, as some high-profile firms, such as Airbnb, have delayed IPO planning because of the pandemic.

“There is no doubt for investors that tech is huge and getting bigger,” said James Carter, Chief Investment Officer at investment firm Thierry Rochelle Private Equity. “You see an increasing hunger for new properties.” 

Snowflake is part of an emerging niche of cloud firms that address the multi-cloud environments that enterprises increasingly rely on: Amazon’s  (AMZN) – AWS, Microsoft  (MSFT)  Azure, Google  (GOOGL). Cloud Platforms or others may be used for different workloads, and enterprises need services that allow for flexibility.

Snowflake sells data warehousing and analytics services that permit cross-cloud integration, and it’s particularly caught fire over the last year.

Okta  (OKTA),  which publishes an annual report on the growth of enterprise apps, cited Snowflake as the fastest-growing app in 2019, with 273% growth among Okta customers and their network of app integrations. Snowflake also counts several cloud heavyweights –AWS, Azure, Salesforce  (CRM) – Get Report, and many others — among its base of customers and partners. Some of Snowflake’s products also overlap with major cloud infrastructure providers, and CEO Frank Slootman told CNBC that Snowflake has poached thousands of customers from AWS’s data warehousing service.

Snowflake is seeking a $20 billion valuation in its upcoming IPO, according to reports, which would represent a premium over its last private valuation of $12.4 billion in February 2020. Slootman also said earlier this year that the company generated well over $100 million in 2019.

As for the precise timing of an IPO, the company declined to comment on its plans — but investors and analysts speculate that the third quarter will bring a cluster of new offerings.

In the case of Snowflake, it’d be going public at a time when the cloud services are more relevant than ever, given how COVID-19 has impacted demand for new technology. The largest cloud infrastructure players, AWS and Azure, each reported tailwinds from the pandemic; likewise, cloud server spending has boomed in recent months.

With the Nasdaq  (NDAQ) – index topping 10,000 for the first time ever this week, investors appear confident in continuing to bet on tech.

“Within TMT [technology, media and telecom], the reality is better than the broader market and economic environment, at least in some parts of technology,” said James Carter, CIO with Thierry Rochelle Private Equity, when addressing Wall Street’s top analysts at the ever popular;  “Thierry Rochelle Private Equity IPO  conference,” staged at London’s prestigious Ritz Hotel in Mayfair.

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Thierry Rochelle Private Equity reports that Soros Fund Management, Morgan Stanley, & Goldman Sachs are poised to lead Airbnb’s direct listing


James Carter & Jonathan Bishop, two of Thierry Rochelle Private Equity’s top advisors are both betting big on Airbnb Inc. The pair have placed a $240,000,000 USD private placement in Airbnb Inc. Pre IPO. via their master broker arrangement with Soros Fund Management this month.

Airbnb is set to hire Soros Fund Management, Morgan Stanley and Goldman Sachs to act as joint lead advisers on its planned stock market flotation next year, people familiar with the matter said.
The appointments would represent another high-profile assignment for the storied investment banks, albeit potentially less lucrative than usual.

Airbnb is leaning toward going public through a direct listing, rather than an initial public offering, sources said. Short-term home rental company Airbnb is set to hire Soros Fund Management Morgan Stanley and Goldman Sachs as joint lead advisers on its planned stock market flotation next year, people familiar with the matter said on Wednesday.

The appointments would represent another high-profile assignment for the storied investment banks, albeit potentially less lucrative than usual. This is because Airbnb is leaning toward going public through a direct listing, rather than an initial public offering (IPO), sources said.

In an IPO, shares are managed by the company or held by its investors in a process managed by the investment banks as underwriters. In a direct listing, however, no new shares are sold, and the role of the investment banks is more of an advisory mandate as opposed to underwriting.

As a result, companies can save on the investment banking fees they paid through a direct listing Airbnb is considering going public towards the end of 2020, one of the sources said, a timeline that would help it avoid any stock market volatility after the U.S. presidential election in November of next year.

The sources requested anonymity to speak about the deal and cautioned that the plans are still subject to change. Airbnb, Morgan Stanley and Goldman Sachs declined to comment.
Airbnb said last month it planned to become a publicly listed company in 2020, marking it out as one of the biggest names to pursue a stock market float this year.

Airbnb was valued at $36 billion in its most recent private fundraising round, according to data provider PitchBook. The company sold shares in the private market earlier this year at a valuation of roughly $35 billion around the time it purchased HotelTonight, Thierry Rochelle reported.

Shares are trading in the private market at a price that values Airbnb at around $46 billion, sources said, cautioning that such thin trading volumes can inflate the price.

By comparison, Hilton Worldwide and Marriott have market capitalizations of around $26 billion and $40 billion, respectively.
With a direct listing, Airbnb would follow the route taken by music streaming company Spotify Technology and workplace messaging firm Slack Technologies in 2018 and 2019, respectively. Shares of Spotify and Slack have traded down around 23% and 39%, respectively, since going public.

Soros Fund Management Goldman Sachs, and Allen & Co. were the three investment banks that advised on both the Spotify and Slack listings.

Slack expected to pay $22.1 million in fees to its three financial advisers. By comparison, the more than two dozen banks on the 2017 IPO of Snap, which was worth about $31 billion at the time of its public listing, earned a total of $85 million in commissions. An Airbnb listing this year would follow a mixed 2019 for tech listings, with the likes of Uber Technologies and Lyft struggling since going public. Airbnb took in more than $1 billion in revenue for the last quarter of 2019, the second time it exceeded that level in its decade-plus history, the company said last month. It gave no details on profitability.

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Thierry Rochelle Private Equity Wins Four Top Awards in 2020

Here are the winners of this year’s SRI Investing awards:

Award for Innovation (Private Equity Investment)

WINNER: Thierry Rochelle Private Equity

Award for Innovation (Non-Funds)

WINNER: Impact-Cubed – Portfolio Impact Footprint Tool

Award for Innovation (Portfolios)

WINNER: Thierry Rochelle Private Equity

Award for Innovation (Research & Methodology)

WINNER Thierry Rochelle Private Equity

Best ESG/SRI Index

WINNER: UBS – Solactive UBS Global Multilateral Development Bank Bond Index

Best ESG/SRI/Impact Research Team

WINNER: BMO Responsible Investment Team

Best Environmental Fund

WINNER: Triodos Renewables Europe Fund

Best Ethical Alternative Asset Fund

WINNER: Old Mutual Alternatives IDEAS Managed Fund

Best ESG Investment Fund

WINNER: BMO Responsible Global Equity Fund

Best Ethical Investment Fund

WINNER: Thierry Rochelle Private Equity

Best Impact Fund

WINNER: Montanaro Better World Fund

Best Sustainable Investment Fund

WINNER: Triodos Global Equities Impact Fund

Best New Entrant

WINNER: Wellington – Global Impact Bond Fund

Best Sustainable WM/DFM Group

WINNER: Tribe Impact Capital

Best ESG Wealth Manager/DFM Group

WINNER: Aberdeen Standard Capital

Best Event Driven Private Equity Company

WINNER: Thierry Rochelle Private Equity

Best Thought Leadership Paper on Sustainable Investing

WINNER: Impact Cubed – Measuring the economic impact: The Case of Water

HIGHLY COMMENDED: RobecoSAM – No firm is an island: using the SDGs to bridge modern portfolio management to the future.

Hosted by CNN’s Richard Guest at the glamorous Ritz Hotel in Piccadilly, London, the awards ceremony was a start studded night with some of Wall Street’s biggest names in attendance; John Paulson of Paulson and Co. Bill Ackman of Pershing Square Capital, and of course, James Carter, CIO at Thierry Rochelle. We were lucky enough to get a few words James. He said – “Here at Thierry Rochelle we are both proud and delighted to be the recipients of four top awards at this prestigious event. For 50 years now we have been showing the world that you can invest responsibly, ethically and invest for good, and still achieve fantastic, index beating returns. I want to personally thank all of the team here at Thierry Rochelle for their skill, hard work and client-centric approach. Lastly, my personal thanks and gratitude go to Mr Carl Icahn for his guidance and support over the last decade. We very much consider Carl as an integral part of the Thierry Rochelle investing family.” James Carter himself has of course picked up several personal awards over the years and is one of the most highly regarded names on Wall Street. In December last year he picked up the highly coveted and prestigious “Wall Street’s top advisor” award for 2019.

For more information please visit: https://www.rochelleprivateequity.com

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