CoreWeave will be open at $40 per share and raise $1.5 billion from the largest tech IPO in the US since 2021, but no price target

CoreWeave officially priced its IPO at $40 per share on Thursday, raising $1.5 billion, setting the stage for the largest tech public offering in the United States since 2021.

Those numbers came under expectations. Nvidia-backed startups originally targeted the $47-$55 per share range. At the high end, CoreWeave would have landed a valuation of nearly $26.5 billion. The $40 pricing settles it at nearly $19 billion based on the number of Class A and B stocks. It is completely diluted and has a higher market capitalization.

According to a company’s news release, CoreWeave trimmed the size of its offering, reducing it from 49 million shares to 37.5 million shares. Bloomberg was the first to report the final pricing.

The IPO comes weeks after the startup’s three founders, Mike Intler Brian Venturo and Blanin McBee, pocketed at least $150 million from stock sales, frowning the industry-wide eyebrows.

Interest was already high before the deal began. Nvidia, one of CoreWeave’s biggest shareholders, reportedly plans to buy $250 million worth of shares at IPO prices.

The largest high-tech IPO in the United States since 2021

This IPO is a key moment for high-tech startups and venture-backed companies, especially after a long, dry spell. Since early 2022, new products have been slowed to crawl as investors are heading for safer bets due to inflation, rate hiking, and broader economic concerns.

CoreWeave’s public debut could change the mood. It is the first venture-backed tech company to raise at least $1 billion since Freshworks in 2021. Last year’s biggest IPOs (including Reddit and Rubrik) each attracted around $750 million. Other names recently submitted for publication include Klarna, Hinge Health and StubHub. Discord is reportedly preparing it too.

Founded in 2017 as the Crypto Mining Company, CoreWeave has been pivoted to AI infrastructure and now has access to NVIDIA GPUs to train and run large AI workloads. Microsoft is the largest customer with a wide margin, with other customers on the client list including Meta, IBM and Cohere.

Last year, revenues rose more than 700% to nearly $2 billion. The company is still red deep, recording a net loss of $863 million. That business model requires large initial investments in hardware and real estate.

Just a few days after submitting for publicity, CoreWeave was locked in a massive deal with Openai worth up to $11.9 billion in five years. As part of that deal, Openai agreed to invest $350 million in CoreWeave shares.

CoreWeave competes with the biggest names of cloud infrastructure from Amazon, Microsoft, and Google. It’s a bold move, but if investor interest is stable, this IPO could bring new life in the Tech IPO pipeline.

Market Timing

CoreWeave’s path was not typical. It was launched as a cryptocurrency outfit in 2017, and then pivoted into AI infrastructure after a 2022 upgrade of Ethereum reduced profitability. That pivot paid off and attracted major AI clients and heavyweight investors.

But not everyone is on sale on long-term AI frenzy. Some analysts have pointed out that Microsoft is raising the suspension on data center leases and cheaper AI models. As AJ Bell’s Dan Coatsworth said, investors may want a discount — or they may not show up at all.