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CoreWeave Raises $1.5 Billion in Major IPO
CoreWeave, a prominent provider of access to Nvidia graphics processing units specifically for artificial intelligence applications, successfully priced its shares at $40 during its initial public offering (IPO) on Thursday. This significant move is reported to have raised $1.5 billion, marking it as the largest technology IPO in the U.S. since 2021, as confirmed by CNBC.
Initially, CoreWeave aimed to sell shares within a range of $47 to $55, which would have estimated the company’s value at approximately $26.5 billion, considering the total outstanding Class A and Class B shares. However, the final offering size was adjusted from 49 million shares to 37.5 million, according to sources privy to the details but wishing to remain anonymous due to the non-public nature of the announcement. Bloomberg was the first to report the finalized share price. At $40, the company’s valuation is expected to approach $19 billion, although the market capitalization could rise when fully diluted shares are considered.
On the same day as the IPO pricing, CNBC highlighted that Nvidia, a significant shareholder of CoreWeave, had intentions for a $250 million investment at the set share price. CoreWeave’s shares are scheduled to begin trading on the Nasdaq under the ticker symbol “CRWV” on Friday.
This IPO represents a crucial moment for tech startups and the venture capital landscape, especially following a lengthy period without substantial new offerings since early 2022. This downturn was driven by escalating inflation and rising interest rates, which discouraged investors from taking on high-risk assets. Other technology-focused companies that have recently expressed plans to go public include the digital health startup Hinge Health, online lender Klarna, and ticketing platform StubHub. Additionally, Bloomberg reported earlier this week that Discord, a chat application developer, is in the process of preparing for its own IPO.
Prior to CoreWeave, the last venture-backed tech company that secured a minimum of $1 billion through a U.S. IPO was Freshworks in 2021. In the past year, competitors Reddit and Rubrik each successfully raised around $750 million through their offerings.
Following the election of Donald Trump in November, Goldman Sachs CEO David Solomon had anticipated an uptick in IPO activity; however, subsequent tariff implementations by President Trump introduced economic uncertainties that heightened volatility in tech stock performance.
CoreWeave has established Microsoft as its primary client, with a roster of others including Meta, IBM, and Cohere. The company reported an impressive revenue increase of over 700% last year, reaching nearly $2 billion, although it also faced a net loss of $863 million. The capital-intensive business model demands substantial investments in equipment and real estate.
Just a week after filing to go public, CoreWeave secured a significant contract with OpenAI, valued at up to $11.9 billion over a five-year term, which included an agreement for OpenAI to purchase $350 million in CoreWeave stock.
As CoreWeave advances, it aims to position itself against major technology firms, including Amazon, Microsoft, and Google, who dominate the U.S. public cloud infrastructure market.
WATCH: Nvidia will anchor CoreWeave deal at $40 per share with a $250 million order, sources say
Source
www.cnbc.com