#78: Nscale IPO Preview — Is it Worth $35 Billion? Plus, the OURA IPO and AI Inference Startups

Craig Stevens (0:00)

AI, NeoCloud, Nscale filed for an IPO last week. It could be targeting a $35 billion valuation based on contracted revenue, not actual revenue. Can this one live up to its potential? The OURA IPO is next Wednesday. The terms are set and retail investors are indicating interest, and a new IPO broker has joined the party. In IPO Radar News, AI inference infrastructure companies are on fire. I'll highlight four explosive startups you need to be watching. Welcome to the Access IPOs Podcast, where we explore opportunities to invest in the world's most innovative and disruptive pre-IPO companies. I'm Craig Stevens, founder of Access IPOs. Before we get into the Nscale IPO, I want to briefly update you on the OURA IPO that's expected next week. And there's some massive news for retail investors that came out of that updated filing. You're not going to believe it. If you're new here, hit that subscribe button and check out the link in the description to sign up for my Sunday newsletter. It's free. OURA set their IPO terms on Monday this week. They're offering 50,000 shares and the initial price range is $40 to $44 a share. The IPO date is set for Wednesday, September 30th. The deal is going to price the night before. So if you're investing this one, be sure to log in to your broker the night before and confirm your request. There's a few interesting twists with this offering, namely that OURA is only offering 13.5 million shares of its own new stock, but selling shareholders are selling 36.5 million. So when that offering says 50 million, that's going to be split in two in this case. OURA is only planning to raise about 530 million or so in this deal, and it's planning to use the proceeds to satisfy an anticipated tax withholding and remittance obligations related to the RSU net settlement. So this isn't really a big fundraising event for OURA. Remember, they're profitable, so they don't necessarily need to raise money, but they are giving some early investors a chance to liquidate their shares in this deal. The two entities selling in this deal, Forerunner Ventures selling about 28.5 million shares, and Lifeline Ventures selling about 7 million shares. And on my screen now, you can see some of the 5% or more shareholders, which includes that FMR LLC, that's Fidelity. Fidelity invested in a late stage round back in, I think, October 2025 They now own 11%.

Fidelity is a large shareholder going to the deal, but they're not a selling shareholder. There was an update to the Directed Share Program. Underwriters have reserved up to 7.5% of the common stock to be offered. That's offered to certain individuals and entities identified by our management. This is where we were hoping they might sell some IPO shares to their customers or people who pay for a membership. And I haven't heard from anybody that that has happened, but if you got an email from them and you were offered shares of this IPO because you were a member or a customer, let me know in the comments. I'd love to hear about that. But if you're worried about these selling shareholders at the open, we also learned in the filing that Eli Lilly and company is indicating interest to purchase up to $100 million worth of shares at the IPO price, just like you and me. And the same with Dragonere, they've indicated interest in $300 million worth of shares. These aren't binding agreements, just like when we indicate interest, it's not binding. But it's good to see some buying interest here from some pretty big names, Dragonere and Eli Lilly, even though some of those early venture investors are liquidating shares. Based on the offering that we've seen so far, this is lining up to be about a $14 to $15 billion market cap. I'm seeing on social media and in the Patreon that some investors are not real happy about that valuation. We'll see where the final price comes in. We'll see where demand lands, both on the institutional side and the retail investor side. But as I'm going to talk about later in the show, there are these other companies that are AI. Maybe they don't have an established business, but since they're AI and the technology around AI, they have much higher valuations than this business, the OURA Ring, which is a pretty solid business. They sell a ring, they sell a membership, they're profitable, they're growing 74%, I think year over year. So this is a very solid business. This company as a public stock is attracting some comparisons to Peloton. Peloton has a similar business model where they sell the product and then sell you the subscription. But that's a much bigger commitment to put a bike in your home than it is to just have a ring on your finger to track your health. So I don't think it's a very good comparison at this point, other than the model is very easy to understand. It's a much more affordable product, but it's also available to a much wider consumer base because it's a much smaller product and you don't need a basement to put aside some space for that big bulky bike. The shocking news that came out of this S1 filing is that we learned that there's going to be sales to retail investors by Coinbase. Coinbase has never sold IPO shares to its customers as far as I know.