Oura, the smart-ring manufacturer, has begun the process of an initial public offering that could raise up to $2.2 billion, after filing to list its shares on Nasdaq under the ticker OURA. The company set a price range of $40 to $44 per share, with a total offering of 50 million shares.
This offering differs from listings focused primarily on financing the company, as 36.5 million of the total shares offered will come from existing shareholders, compared with 13.5 million new shares issued by Oura. Thus, shareholder sales represent 73% of the base offering. At the top of the price range, approximately $1.61 billion before expenses will go to the selling shareholders, while Oura will receive about $594 million.
Limited Funding for General Uses
Based on a share price of $42, Oura expects to generate net proceeds of approximately $532.6 million after expenses. However, about $526.4 million of that amount is allocated to cover tax obligations and payments related to employee shares due as a result of the offering, leaving only about $6.2 million for the company’s general needs.
Among the largest selling shareholders are funds linked to Forerunner Ventures, which owns approximately 28.7 million shares representing 9.3% of the company and plans to sell its entire stake. At an average price of $42, the value of this transaction could reach approximately $1.2 billion before expenses and taxes.
High Valuation and Subscription Growth
If the price is set at $44, Oura’s market capitalization could reach approximately $14.1 billion after the offering, rising to about $15.6 billion on a fully diluted basis when rights convertible into shares are included.
Part of this valuation is based on the growth of the subscription model linked to the company’s rings and app. Membership revenue reached $240.5 million during the nine-month period ended in June, up 121% year over year, with a gross profit margin of 89%. The company also says that more than 94% of ring activations convert into paid memberships.
Why Does This Offering Matter?
Oura’s offering reflects the transition of a consumer-device company to a model that relies heavily on recurring revenue from services. However, the structure of the transaction also shows that most of the funds will go to existing shareholders rather than toward expanding the company’s business, while most of its net proceeds are earmarked for obligations related to employee shares. Therefore, subscription performance and the company’s ability to maintain conversion and growth rates will be important factors in testing the proposed valuation after the listing.
Oura was founded in Finland in 2013 and provides sleep, activity, and stress-level tracking through its rings and app. It expects to end fiscal 2026 with year-over-year growth of 96% and reach approximately 5.7 million paid members, with the company indicating that sales of the Oura Ring 5 will support these projections.