Firmus, an Australian AI-focused data center developer backed by Nvidia, has withdrawn its planned initial public offering (IPO) on the Australian Securities Exchange (ASX), which aimed to raise up to AU$7.9 billion ($5.5 billion) at AU$11 per share, resulting in a proposed market valuation of AU$43.9 billion ($30.7 billion) [1]. The company cited 'recent market volatility and prevailing market conditions' as the primary reasons for scrapping the IPO, stating that the terms would not appropriately reflect the strength of its business and long-term growth outlook [1].
The cancellation comes amid criticism from fund managers and analysts who argued that Firmus's offer was overpriced, especially given that much of its planned data center expansion in Australia and Southeast Asia remains unbuilt [1]. Ron Shamgar, head of Australian equities at Tamim Asset Management, commented, 'Obviously they got a bit too greedy,' noting that the IPO was offered at 13 times earnings before interest and taxes, which is considered excessive for a startup with significant execution risk [1].
Firmus currently operates two data centers in Australia and Singapore and has five more in development across Australia, Singapore, Indonesia, and Malaysia [1]. The company has partnered with Nvidia to deploy its chips in 'AI Factories,' integrating Nvidia Vera Rubin NVL72 rack-scale systems with Firmus's liquid-cooling technology, and leasing processing capacity to customers such as OpenAI and Meta [1]. Over the past year, Firmus has raised more than $3 billion in equity, valuing the company at over $10.5 billion, with Nvidia, Coatue, and Blackstone participating; Blackstone also extended $10 billion in debt financing in February [1].
According to a draft prospectus, Firmus projected it would generate $5 billion in annual earnings within five years from its data center portfolio [1]. John Athanasiou, CEO of Red Leaf Securities, described the gap between Firmus's private fundraising valuation and its IPO offer as 'mind-boggling' [1]. Fund managers expressed disappointment that Firmus would not list on the ASX, as it could have diversified an index dominated by domestic banks and resource companies [1].
CONCLUSION
Firmus's decision to cancel its high-profile IPO reflects concerns over excessive valuation and market volatility, disappointing investors seeking greater diversification on the ASX. The move underscores the challenges faced by ambitious tech startups in securing public market support amid execution risks and unbuilt infrastructure.