First post-invasion IPO of Russian e-scooter Whoosh raises $33mn

First post-invasion IPO of Russian e-scooter Whoosh raises $33mn
Kick-share company Whoosh raised $33mn from the first IPO on the Moscow Exchange since the start of the war, less than it had hoped for. / bne IntelliNews
By bne IntelliNews December 15, 2022

Russian e-scooter-sharing service Whoosh held its previously announced initial public offering (IPO) on the Moscow Exchange (MOEX), placing its shares under the ticker WUSH and raising RUB2.1bn ($33mn) from a 10% free float at a total valuation of RUB20.6bn, RBC business portal reported.

This marks the first IPO on the Russian market after the full-scale military invasion of Ukraine. 

As followed by bne IntelliNews, prior to the military invasion of Ukraine the Russian equity market was going through an IPO boom, in part fuelled by the retail investment revolution. But as the barrage of Western sanctions cut off Russian issuers from the global financial markets, the offerings have dropped dramatically.

In October the secondary public offering (SPO) of Russian cyber and information security solutions developer Positive Technologies failed to attract sufficient demand from investors

But Whoosh managed to place the offering at RUB185 per share (the lower end of the price range guidance), with the shareholders also providing RUB0.2bn worth of shares for possible stabilisation in the secondary market. 

The analysts surveyed by RBC business portal believe that the placement at the lower end of the price range may indicate that demand for the IPO was worse than expected. However, they still see the only IPO on MOEX this year as good news, with not only retail but also institutional investors showing interest.

Vedomosti daily reminds that in the end Whoosh raised less than half of the initially planned RUB5bn, and that the total valuation of RUB20bn fell short of RUB24bn-RUB40bn range estimated in analyst surveys prior to the offering.

While 20,000 private investors became shareholders, more than half of the total volume was bought by leading Russian investment funds, the company said in a press release. 

The analysts surveyed by Vedomosti also believe that the IPO was a success given it was the first Russian offering in 2022. They believe that some other small and mid-cap companies could follow with equity offerings in 2023, although no pre-invasion IPO boom is expected.

"IPO of Whoosh is significant also because it's the only Russian IPO in 2022. We also became the first technology company whose shares will be traded on the Moscow Exchange," commented the CEO of the company, Dmitry Chuiko. 

Whoosh will use the funds raised "to expand its fleet, strengthen its leadership position in existing markets and expand into new regions". The company is the leading federal player in the micromobility market in Russia in terms of scooter fleet size (over 81,000 scooters as of end of 3Q22), has its own IT platform and technological expertise. 

The service was launched in 2019 by ex-S7 Group top executives Dmitry Chuiko, Yegor Bayandin, Oleg Zhuravlev and Sergey Lavrentiev. The rental is available in 12 cities, including Moscow, St Petersburg and Sochi. 

According to previous reports by RBC citing sources close to the company, none of the shareholders plans to exit from the company entirely. Currently, 69.7% of Whoosh is owned by the original founders listed above, 13% is held by VIM Investments, 12.2% by Ultimate Capital and 5% is reserved for an employee incentive programme. 

The company sees the Russian e-scooter segment growing from RUB9bn in 2021 to RUB60bn in 2024, and RUB96bn in 2026. The number of users may increase from 10mn to 28mn and 34mn respectively. Whoosh thus intends to boost its revenue by 50% in 2022 and 2023, and to maintain an EBITDA margin of 50% this year and 40-50% in 2023. In 2022 the company plans to pay a RUB1bn dividend.