Smart ring maker's IPO to enrich early backers more than company
Oura's upcoming IPO is structured to deliver most of the proceeds to existing shareholders, with Forerunner Ventures selling its entire 9.3% stake for about $1.2 billion. The company itself expects to net only about $532 million, which will go almost entirely to covering employee share tax obligations. Despite the limited fundraising, Oura's subscription business is expanding rapidly, with membership revenue more than doubling.
Oura’s IPO structure prioritizes shareholder liquidity over company fundraising, with Forerunner Ventures alone selling roughly 28.7 million shares. The firm’s initial investment came during a 2020 Series B round, and its exit could yield about $1.2 billion at the midpoint price. Meanwhile, the company’s net proceeds of roughly $532 million are almost fully earmarked for employee tax obligations tied to vesting share grants, leaving only about $6 million for operations. Oura’s cash reserves stood at $372 million in June, and its hardware revenue still dominates at $974 million, though membership revenue grew to $240.5 million with an 89% gross margin. The company projects 5.7 million paying members by fiscal year-end, nearly doubling year-over-year.
This IPO may signal a shift in how late-stage startups reward early investors, potentially reducing the capital available for growth. For Oura, the limited fundraising could constrain expansion despite strong subscription growth, though its existing cash and profitability may mitigate risk. Consumers might see continued innovation if the company prioritizes product development, but the focus on shareholder exits could also slow investment in new markets. The outcome may influence other venture-backed hardware firms weighing similar IPO structures.