US investors are getting their first big tech IPO since January. Autonomous driving tech provider Mobileye is set to go public on Oct. 26, and the stakes are high.

If they bomb, it’ll scare away others like Instacart, who also had plans to go public soon.

Can Mobileye turn the IPO market around?

This year, US IPOs have raised the least money since 1995, reflected in the massive decline in investment banking earnings.

• Hundreds of companies that would’ve gone public in 2022 are holding off — worried investors won’t pay the asking price.
• Mobileye is a key example. They wanted to go public at a $50B valuation but lowered the price to ~$16B (68% decline).

Is this the start of an IPO resurgence? Don’t expect it. Per Jefferies’ Global Head of Capital Markets, this is a one-off for a “big marquee name” that can go public anytime (FT).

First mover advantage

Founded in 1999, Mobileye was early in the self-driving tech space. They provide tech (i.e., chips, cameras and software) that powers self-driving and advanced driver-assistance systems.

Intel acquired Mobileye in 2017 for $15.3B — taking them private. Five years later, Mobileye is making its way back to the public market.

How’s Mobileye done under Intel’s ownership?

• Losses shrank: Net loss of $328M (2019), $196M in 2020 and $75M in 2021.
• Growth was steady: 2021 sales of $1.4B — 43% growth from 2020 and 57% growth the year before.
• Business slowed in 2022: Sales grew 21%, and losses came in at $66M in the first six months this year.

Investors: Repeat success?

Mobileye delivered investors a strong return when it was acquired for a price over 3x the $5B market cap it first went public at in 2014.

But markets are much different today. Semiconductors are in a bear market that’s taken chip stocks down, and there’s lots to be scared of:

• Vehicle sales are falling, and self-driving vehicles are having trouble gaining traction.
• Automakers are also increasingly developing their self-driving tech in-house.
• Mobileye’s revenue is highly concentrated among a few customers, with 76% of sales coming from 8 automakers.

Mobileye is expected to start trading on Oct. 26