Oura Seeks $2.2 Billion in IPO: Payday for Investors and the Tax Authorities

Set Trending Topics as a preferred source on Google.

Finnish-American smart ring maker Oura has launched its initial public offering on the Nasdaq. The company and its existing shareholders are together offering 50 million shares at a price range of $40 to $44, which works out to a deal size of up to $2.2 billion. At the top of that range, Oura would be worth roughly $14.1 billion. The shares are set to trade under the ticker “OURA”.

A closer look at the updated IPO filing shows that this is only partly a fundraising exercise. Of the 50 million shares on offer, 36.5 million, or almost two thirds, come from existing shareholders. At the $42 midpoint of the range, that would hand them about $1.53 billion before fees, while the company itself would collect around $567 million.

Forerunner Ventures Is Selling Its Entire Stake

The largest seller by far is Forerunner Ventures. The US venture firm is parting with its complete 9.3% holding of roughly 28.7 million shares, worth about $1.20 billion at the midpoint before underwriting fees and taxes. That single investor accounts for nearly 80% of all shares being sold by existing backers. According to PitchBook, Forerunner first invested in Oura’s $28 million Series B round.

Little of the company’s own share of the proceeds will stay in the business either. Oura expects net proceeds of $532.6 million at the midpoint and plans to spend about $526.4 million of that on tax obligations triggered by the listing, since employee restricted stock units vest at the moment of the IPO. That leaves roughly $6.2 million for general corporate purposes, according to the filing. Oura is therefore settling the tax bill out of the offering itself, leaving its own cash position of $371.8 million untouched and avoiding additional debt.

Two cornerstone investors have signalled interest: Eli Lilly plans to buy up to $100 million worth of shares, and funds affiliated with Dragoneer up to $300 million. Lilly also holds a $50 million SAFE that converts into stock at the IPO.

Revenue Up 74%, Subscriptions Drive the Margin

The numbers behind the listing are steep. In the first nine months of its current fiscal year, Oura generated $1.214 billion in revenue, up 74% year over year. Net income rose from $1.6 million to $60.8 million, and adjusted EBITDA climbed from $83.5 million to $106.7 million. Because the company simultaneously ramped up marketing and research spending, its adjusted EBITDA margin slipped from 12% to 9%.

Hardware remains the bulk of the business, at $974 million in ring sales. The subscription side grew considerably faster and reached $240.5 million, or roughly 20% of total revenue. With an 89% gross margin, the membership is Oura’s most profitable line by a wide margin, and the overall gross margin stands at 55%. In the US, the membership costs $5.99 per month or $69.99 per year, and 63% of new members sign up for the annual plan right away.

The mechanism behind the growth: more than 94% of activated rings convert into a paid membership. Oura expects to close the fiscal year with about 5.7 million paying members, which would be close to double the figure a year earlier. The most recent count was 5.0 million across 56 markets. The company reports weighted-average 12-month retention of roughly 85% and a daily-to-monthly active user ratio of about 65%.

One trend worth noting is pricing. Average revenue per ring sold fell from $332 to $311, even though the Oura Ring 5 starts at a higher list price of $399 than its predecessors. Channel mix, retail margins and discounts explain the gap. Close to half of hardware revenue now flows through retail partners including Amazon, Best Buy, Costco, Harrods and Target.

From $5.2 Billion to $14 Billion in Two Years

The valuation Oura is targeting extends a rapid climb. Just under a year ago, the company was valued at around $11 billion in a $900 million round led by Fidelity, with ICONIQ, Whale Rock and Atreides participating. Less than a year before that, a $200 million round put the valuation at $5.2 billion. In total, Oura has raised about $2.06 billion, according to PitchBook.

Structurally, Oura has turned from a European company into an American one. The holding company was redomiciled from Finland to Delaware, and the headquarters sit in San Francisco. A substantial share of the roughly 1,350 full-time employees across 11 countries remains in Finland, where Oura runs offices in Helsinki and Oulu.

A Data Moat, With Samsung as a Risk

Oura’s filing presents its data asset as the core competitive advantage: nearly 42 billion hours of longitudinal biometric data, more than 50 health metrics, and over 1,140 patents and patent applications. Members wear the ring a median of about 23 hours a day, and the company says the signal from a finger can be up to 100 times stronger than one taken at the wrist. On top of that sit proprietary health foundation models and health-specific language models that power the Oura Advisor AI coach. The company names Apple, Google with Fitbit and Samsung as competitors, alongside Coros, Garmin and Whoop.

The prospectus also lays out a long list of risks. Samsung has filed a complaint with the US International Trade Commission over four patents, and a ruling in its favor could restrict imports of certain Oura products into the US. Omni MedSci is seeking around $120 million in a Texas court. Former CEO Harpreet Singh Rai has brought two separate suits, one of them alleging securities fraud in connection with a share buyback.

Operationally, Oura depends on a small number of contract manufacturers, owns no factories of its own, and relies on a single source for certain components. Production and supply chain operations are concentrated in Northern Europe and Asia, and the filing explicitly flags US tariffs on imports from Estonia, Finland, Mexico, South Korea, China and the Netherlands as a cost risk. Freight, tariffs and hardware overhead rose by $64.1 million over the period. Customer concentration is high as well: in the last full fiscal year, two individual customers accounted for 12% and 10% of total revenue, and the US Department of Defense is among the enterprise customers.

A quality issue weighed on margins recently. Certain batches of the Oura Ring 4 developed battery problems, and the company replaced affected devices free of charge, in some cases outside the warranty period, pushing warranty costs up by $28.6 million.

Regulations Could Become Difficult

On the regulatory side, Oura deliberately positions itself outside medical device rules. Most features are marketed as general wellness products, a category for which the US Food and Drug Administration applies enforcement discretion. Should the agency revise that guidance or take a different view of features such as blood pressure signals, Oura could face clearance procedures. In the EU, the filing notes, there is no comparable formal exemption.

One final figure explains the capital structure: Oura has drawn $375 million on a credit facility, largely to buy back shares from existing holders. As a result, stockholders’ equity stands at negative $1.6 billion, with $380.1 million in debt against $371.8 million in cash.