MW Why this drone maker is braving turbulent markets for an IPO

By Steve Gelsi

Airo has launched a roadshow aiming to benefit from increased military spending around the world

Drone maker Airo Group Holdings Inc. is stepping into a challenging market for initial public offerings by launching a roadshow for its stock-market debut.

Airo on Thursday said it plans to offer 5 million shares at an estimated price range of $14 to $15 a share for trading on the Nasdaq COMP under the symbol "AIRO." (AIRO)

At the midpoint of the range, the Albuquerque, N.M.-based company will raise $75 million with the help of underwriters Cantor, BTIG, Mizuho and Bancroft Capital.

With up to 25.64 million shares of Airo to be outstanding after it goes public, the company would have a market capitalization of up to $410 million if the IPO prices at the top of its range.

'Historically, IPO volume has dropped alongside spikes in volatility, sometimes for months, depending on the severity of the panic.'Renaissance Capital

The deal comes at a time when most IPOs have been delayed in the face of wild stock-market gyrations following President Trump's tariff moves in the past week.

Read: Stock Market Today: Dow tumbles almost 1,500 points as Wednesday's gains fade; S&P 500, Nasdaq see losses accelerate

The casualties include buy-now-pay-later company Klarna Group (KLAR), which had filed plans to go public in March, as well as ticket-resale platform StubHub Holdings $(STUB.UK)$, which filed its IPO on March 21.

Fintech platform Chime and medical supplier Medline Industries have also announced delays, along with Israeli trading platform eToro Group (ETOR) and TV advertising platform MNTN $(MNTN)$, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research.

Meanwhile, a $1.5 billion IPO from AI database company CoreWeave Inc. $(CRWV)$ debuted on March 28 at $40 a share, which was well below its estimated price range of $47 to $55 a share. The stock topped $60 a share in early April but has since fallen to $42.30 a share.

Read: Why CoreWeave's stock is taking off after a lackluster IPO

While Airo has now officially launched its roadshow, it remains to be seen if the deal will reach the stage of pricing and trading, given the volatility in the market.

"High volatility weighs on new issuance; not only are investors more cautious with new issues while managing their existing portfolios amid a selloff, [but] it is difficult to price an offering at a predictable valuation when peer groups are trading erratically," Renaissance said in commentary this week.

"Historically, IPO volume has dropped alongside spikes in volatility, sometimes for months, depending on the severity of the panic," it added.

The Renaissance IPO ETF IPO was down 6.3% Thursday and has fallen 13.8% in the last 12 months, while the S&P 500 SPX has gained only 0.9%.

Airo said in its IPO filing documents that it expects "potential tariffs and their negative impacts on our business to continue into 2025."

But outside of this impact, the company expects to benefit from increased military spending around the globe as NATO countries work to build up their defenses against Russian aggression in nearby Ukraine.

"Conflicts in Ukraine, the Middle East, and heightened geopolitical tension in the Pacific region have elevated global security concerns," Airo said in the filing documents. "This has caused many governments to increase their focus on defense and security, leading to a rise in defense spending and a growing willingness to adopt new technologies and solutions."

The size of the military-drone market is expected to increase to about $24.75 billion by 2030 from about $16.9 billion in 2025, according to data provider Precedence Research.

"We believe that our products will continue to play a role in the arsenals of the future, including through NATO countries," Airo said. "In addition, we believe that the U.S. military's transformation into a smaller, more agile force that operates via a network of observation, communication and precision-targeting technologies will continue to accelerate the acceptance and use of small-drone military operations around the world."

The company's co-founder and executive chairman, the Indian-American entrepreneur Chirinjeev Kathuria, has helped take other businesses public, including UpHealth Inc. $(UPHL)$ and Ocean Biomedical Inc. (OCEA)

Airo Chief Executive Joseph Burns has worked at United Airlines Holdings Inc. $(UAL)$, including as managing director of technology and flight test.

Airo reported a net loss of $38.7 million and revenue of $86.94 million for calendar-year 2024, compared with a net loss of $32.5 million on revenue of $43.3 million in 2023.

About $75 million of its 2024 revenue came from its Sky-Watch drone unit, $9 million from its Aspen Avionics business and $4 million from its military-training business Coastal Defense Inc.

-Steve Gelsi

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April 10, 2025 13:21 ET (17:21 GMT)

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