Astera had marketed the shares for US$32 to US$34 after elevating both the size and price target for the share sale. — Reuters
NEW YORK: Astera Labs Inc and its investors are set to raise about US$713mil, pricing shares in the semiconductor connectivity company’s initial public offering (IPO) above the marketed range, according to people familiar with the matter.
Tapping demand for investments related to artificial intelligence (AI), Astera and the current stockholders are selling 19.8 million shares for US$36 each, said the people, who asked not to be identified because the information wasn’t public yet.
Astera, whose backers include Intel Corp, along with Sutter Hill Ventures, had marketed the shares for US$32 to US$34 after elevating both the size and price target for the share sale.
At US$36 a share, Astera would have a market value of about US$5.5bil based on the outstanding shares listed in its filings with the US Securities and Exchange Commission.
Including stock options and restricted share units, Astera would have a fully diluted value closer to US$6bil.
A representative for Astera didn’t immediately respond to requests for comment for the story.
The listing is one of the largest of the year so far, preceded by the high-profile share sale by social-media company Reddit Inc, which is seeking as much as US$748mil for it and its employees and shareholders.
Astera’s IPO tops the last big listings by US technology companies: Instacart’s US$660mil raise and Klaviyo Inc.’s US$659mil offering in September.
While those IPOs, along with UK chip designer Arm Holdings Plc’s US$5.23bil offering, 2023’s biggest, failed to launch a listing rush, the market has warmed up since then.
More than US$7.2bil was raised via IPOs on US exchanges this year before Astera’s share sale, according to data compiled by Bloomberg.
The IPO is being led by Morgan Stanley and JPMorgan Chase and Co, with participation from Barclays Plc, Deutsche Bank AG, Evercore Inc, Jefferies Financial Group Inc and six other banks.
Astera’s shares are expected to begin trading on Wednesday on the Nasdaq Global Select Market under the symbol ALAB.
Founded in 2017, Astera develops semiconductor-based connectivity solutions with the aim of enabling the “mainstreaming” of AI and machine learning in the cloud, according to its website.
Astera tapped into investor bullishness on AI as part of a 2022 funding round led by Fidelity Management and Research that raised US$150mil at a US$3.15bil valuation.
Nvidia Corp and other AI-related stocks have soared over the past year, helping to lift stock indices to record highs.
In 2023, Astera cut its net loss to US$26 million on revenue of US$116mil, compared with a loss of US$58mil on revenue of US$80mil the previous year, according to its filings.
The company’s investors include Intel’s venture arm. Its biggest shareholder is Sutter Hill Ventures, which will control 12.6% of the company’s stock after the listing. Funds affiliated with Fidelity will have a 6.4% stake, the filings showed.
Astera co-founder and chief executive officer Jitendra Mohan will own 6.1% of the company’s shares, while co-founder and chief operating officer Sanjay Gajendra will have a 5% stake.
About 3.1 million of the shares in the IPO are being sold by current shareholders.
The group Upward Bound Youth is selling two million of those shares, with the rest being sold by C&F Investments and investors with stakes of less than 1% each. — Bloomberg
