Big names in the tech industry has reportedly signed on as ‘anchor investors’ for the forthcoming public listing of ARM Holdings in New York.

Reuters reported that ARM has signed up many of its major clients as investors in its IPO, including the likes of Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel, Samsung Electronics, Cadence Design Systems and Synopsys.

ARM has spent months courting potential ‘anchor investors’ for its IPO, and there has been strong uptake due in part to tech firms seeking to expand their commercial relationship with ARM because of its unique importance in the tech sector.

ARM’s campus in Cambridge

Anchor investors

Sources told Reuters that Apple, Nvidia and the other strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO.

ARM’s semiconductor designs are viewed as an indispensable resource by the tech industry. They are used by more than 260 technology companies to make over 30 billion chips annually, powering 99 percent of the world’s smartphones, small sensors, data centre servers, and supercomputers.

ARM and its owner SoftBank have set aside 10 percent of the shares to be sold in the IPO for its clients.

Amazon, which had previously held talks to invest in the IPO, decided not to participate, one of the sources told Reuters.

Investing in ARM’s IPO will not deliver these investors a seat on ARM’s board, and neither will it allow them to dictate ARM’s strategy.

But investing early could strengthen ARM’s ties with each participating company and make it harder for a competitor to acquire the Cambridge,UK-based firm later, Reuters reported.

IPO valuation

Meanwhile as the shipment slump in the global smartphone market continues, which resulted in the British chip designer’s revenues for the year ending 31 March declining to $2.68 billion, ARM has lowered its IPO valuation price.

ARM is now planning to ask investors to pay $47 to $51 for each of its shares when it begins marketing its initial public offering (IPO) next week, people familiar with the matter told Reuters on Saturday.

The price range would translate into a valuation for ARM of roughly between $50 billion and $54 billion, and an offering of $5 billion to $5.4 billion.

This would make ARM the most valuable company to list in New York since Rivian Automotive listed on the public markets back in November 2021.

Sources told Reuters that owner SoftBank could possibly raise this range before the IPO prices, should investor demand prove strong.

But there is no disguising the fact that the new valuation represents a climb-down from the $64 billion valuation, at which SoftBank acquired the 25 percent stake in the company it did not already own from its Vision Fund last month.

SoftBank had previously been in talks to list ARM at a valuation of $60bn to $70bn.

SoftBank committed to the ARM IPO after a proposed sale to graphics chipmaker Nvidia collapsed last year in the face of regulatory opposition.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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