Health clothing company Figs plans to complete its public offering this week. The company will trade under the symbol FIGS on the New York Stock Exchange.

Figs has grown at a fantastic rate and unlike many companies that have done IPOs (IPOs) in the past year or so, they are actually generating free cash flow.

The Figs share offering will be one of the very first where IPO shares can be purchased through the Robinhood online brokerage platform. Robinhood is rolling out its new IPO Access feature, a tool that allows its users to try and buy IPO stocks that they would otherwise be unable to buy.

Robinhood will have a limited number of shares. But the company assured investors that anyone who applied for stocks would have an equal chance of getting stocks, regardless of the size of their account with the company.

Now let’s see whether or not you should think about asking for Figs actions.

Fig scrubs matter more than ever

Figs’ IPO comes after a year when demand for its product has reached an all-time high. This company manufactures high quality scrubs for healthcare workers. Not only that, but Figs is one of the first health clothing suppliers to order online.

It was founded in 2013 by Heather Hasson and Trina Spear. Heather Hasson had what the company calls the “ah-ha” moment when she realized her friend who worked as a nurse was wearing itchy scrubs that didn’t suit her very well.

No one focused on providing technically advanced clothing and products for the healthcare market. While department stores regularly developed new types of clothing for athletes, weekend warriors, and causal runners, no one was using the same technology to give frontline healthcare workers the same comfortable fit.

So Hasson used his background in fashion to start designing scrubs for healthcare professionals.

Most scrubs are usually made from cotton, which absorbs liquids and retains odors. When working in a frontline medical facility, the last thing you want is clothes that bring home the smells and fluids from the hospital after work.

To help change that, Figs has developed a proprietary fabric technology called FIONx that offers four-way stretch, odor-fighting, wrinkle-fighting, and moisture-wicking properties. All of its scrubs have easy-access zippered pockets for business and personal items such as stethoscopes, scissors, smartphones and ID badges.

Later, Hasson was introduced to Trina Spear, who had worked on a private equity deal in the medical clothing markets and was familiar with the company.

Spear helped secure a first round of funding and Figs was born.

The two have gone from selling scrubs in the back of a car to running a business that sold $ 263 million worth of health clothing last year.

Figs are not sold in traditional health clothing outlets. Ninety-eight percent of its sales over the past year were online orders.

As a result, he built the largest platform for health clothing aimed directly at consumers. And he’s starting to question the old-fashioned approach that required healthcare workers to go to a physical store.

Find out how this company grew …

Should you get Figs IPO shares?

Healthcare is still one of the largest industries in the United States, with more than 20 million people employed in 2020. According to the Bureau of Labor Statistics, that number is expected to increase by 15% per year between 2019 and 2029.

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Prior to the founding of Figs, the healthcare apparel markets had essentially been the same for over 100 years. Old companies continued to sell loose, ill-fitting clothing, and healthcare workers didn’t have many options.

Figs, of course, made a difference. And the business model is working.

In 2020, revenue increased from $ 110.5 million to $ 263.1 million, or 138% for the year. Cash flow from operations increased from $ 6.5 million to $ 21.7 million, and free cash flow increased from $ 1.8 million to $ 19.5 million. Active users of the Figs website have grown from 600,000 to over 1.3 million.

Figs is offering 5,875,000 Class A common shares and Tulco LLC, Figs’ largest shareholder, is offering 16,625,000 Class A common shares. The total offering will be 22.5 million shares. Goldman Sachs (GS), Morgan Stanley (MS), Barclays Capital (BCS) and Credit Suisse Securities (CS) will act as lead book managers.

Although Figs does not get any proceeds from the shares sold by Tulco, the money received from the 5.875 million shares it sells will be used for research and development and marketing activities, general and administrative matters, and expenses. capital.

Figs has a huge opportunity to grow this business. So far, it has 1.3 million users and the market has 20 million people and is growing.

A combination of positive word of mouth and data-driven digital markets could continue to drive high revenue and profit growth rates for FIGS.

Ultimately, Figs could become the Lululemon of health clothing and deliver exceptional returns to early investors. This means that if you can participate in the IPO through Robinhood, you have an opportunity for growth.

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