Firmus, an Australian AI-focused data center developer backed by Nvidia, has withdrawn its planned initial public offering (IPO) on the Australian Securities Exchange (ASX), which was set to raise up to AU$7.9 billion ($5.5 billion) at AU$11 per share. This would have valued the company at AU$43.9 billion ($30.7 billion), making it the second-largest IPO in Australian history after Telstra's listing in 1997 [1]. The decision to scrap the IPO was attributed to 'recent market volatility and prevailing market conditions,' with the board stating that the terms did not appropriately reflect the company's business strength and long-term growth outlook [1].
The IPO's high valuation drew criticism from fund managers and analysts, who noted that much of Firmus' planned data center expansion in Australia and Southeast Asia was still unbuilt. Ron Shamgar, head of Australian equities at Tamim Asset Management, described the valuation as 'quite excessive,' pointing out that the offer was at 13 times earnings before interest and taxes (EBIT) on a two- to three-year outlook, which is high for a startup with significant execution risk [1]. John Athanasiou, CEO of Red Leaf Securities, called the gap between Firmus' private fundraising valuation and the IPO offer 'mind-boggling' [1].
Firmus, founded in 2019, currently operates two data centers in Australia and Singapore, with five more in development across Australia, Singapore, Indonesia, and Malaysia. The company has raised over $3 billion in equity over the past year, with Nvidia, Coatue, and Blackstone among its investors. Blackstone also extended $10 billion in debt financing in February [1]. Firmus' partnership with Nvidia involves deploying Nvidia's Vera Rubin NVL72 rack-scale systems in its 'AI Factories,' which are leased to customers such as OpenAI and Meta [1].
According to its draft prospectus, Firmus projected generating $5 billion in annual earnings within five years from its data center portfolio [1]. The withdrawal of the IPO disappointed fund managers and analysts who had hoped the listing would diversify the ASX, which is dominated by domestic banks and resource companies [1].
CONCLUSION
Firmus' decision to cancel its high-profile IPO underscores the challenges of market volatility and skepticism over lofty valuations, especially for capital-intensive tech startups. The move disappointed investors seeking greater tech sector representation on the ASX, while highlighting ongoing concerns about execution risk and the gap between private and public market valuations.