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Message: [QUOTE="Anna Heim, post: 4727"] Fees on the [URL='https://techcrunch.com/2021/12/10/nubank-hashicorp-provide-startup-market-with-end-of-year-ipo-wins/']Nubank IPO[/URL] were among the lowest of the year, Bloomberg [URL='https://www.bloomberg.com/news/articles/2021-12-15/goldman-morgan-stanley-citi-split-meager-fees-in-nubank-s-ipo']revealed[/URL] this week. Of the $2.6 billion the Brazilian fintech’s parent company, Nu Holdings, raised in the operation, only 1.6% are going to its underwriters, which included Goldman Sachs, Morgan Stanley, Citigroup and others. “Among 490 IPOs in the U.S. so far this year, only three paid a smaller percentage,” Bloomberg noted. The Brazilian press was [URL='https://oglobo.globo.com/economia/pechincha-em-nova-york-nubank-pagou-menos-que-xp-bancos-para-abrir-capital-nos-eua-25320217']quick to report[/URL] that Nubank got itself “a bargain.” Their term, but it did indeed land a better deal than three other Brazilian fintechs that went public before it did: PagSeguro, which IPO’d on the New York Stock Exchange in 2018; StoneCo, which [URL='https://www.bloomberg.com/news/articles/2021-11-17/buffett-backed-stoneco-sheds-22-billion-in-value-since-peaking']shed a lot of value[/URL] since its 2018 IPO; and broker XP, which went public in 2019. [HR][/HR] [B][I]The Exchange explores startups, markets and money. Read it [URL='https://techcrunch.com/subscribe/?tpcc=theexchange']every morning on TechCrunch+[/URL] or get [URL='https://techcrunch.com/newsletters']The Exchange newsletter[/URL] every Saturday.[/I][/B] [HR][/HR] According to Bloomberg, these respectively paid 2.4%, 3.6%, and 4.3% in fees. The difference is also stark in absolute terms, with Nubank set to pay $41.6 million in commissions and discounts, compared to $83.2 million for XP. [URL='https://techcrunch.com/subscribe/?tpcc=theexchange'][IMG alt="Subscribe to TechCrunch+"]https://techcrunch.com/wp-content/uploads/2021/10/exchange-banner-sq-orng-plus.jpg?w=300[/IMG][/URL]While this might speak of Nu’s bargaining power — and that its exit was one of the hottest operations of the year — it got us thinking: Could it also be a sign of some of the changes we are planning to track in 2022? Let’s explore. [HEADING=1]Hot or not[/HEADING] IPO fees are subject to market dynamics. But it’s not merely the total fee percentage that matters; other elements can also show a company’s market strength viz banks competing for its IPO business. For example, when DoorDash went public just over a year ago, The Exchange [URL='https://techcrunch.com/2020/11/30/doordash-aims-to-add-11-billion-to-its-valuation-during-public-offering/']noted that the company[/URL] had “no shares set aside for its underwriting banks to buy at its IPO price.” Normally, underwriting banks get the option to purchase a block of shares at a company’s final IPO price if they so choose. This gives the banks something akin to an avenue to free profit if the company they are helping take public performs well. Briefly: If underwriting banks secure access to, say, 5 million shares in an IPO, and the company prices at $20 but opens at $30, the banks can lock in a neat $50 million. Obviously, it’s more complicated than that, but illustrative math can deobfuscate. [/QUOTE]

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