An IPO boom is coming

This year was somewhat lacklustre for the IPO market, but 2024 could be a whole new story, with companies such as Reddit, Stripe, Shein and Ola Electric potentially going public. Which other companies might follow? #reddit #shein #stripe #olaelectric #ipo

While 2023 was relatively quiet when it came to initial public offerings (IPOs), many analysts and market watchers are keen on the hopes for a more robust cycle in 2024. In fact, despite a challenging global economy and geopolitical landscape, the outlook for deal-making, IPOs, and corporate and investor activity is expected to improve in 2024.

What I have never understood is the US market obsession to create companies and keep them unprofitable for as long as possible. Uber at a $100 billion public market valuation is not profitable. Similarly, most of the companies that went IPO in the last 5-6 years in the US are not profitable. There has been an increase in valuations consistently in companies that are producing more revenue on the public market but are not profitable. What I find is the ability to not produce free cash flows and not be profitable is a handicap. And the last 10 years behavior of the US public market is not allowing the right kind of behaviour to get created in private companies Would love to know your thoughts?

2024 IPO Drought in Tech to end? Lifted from the latest Constellation newsletter below, and a good sign for the Tech industry in 2024: "Two Year IPO Drought Coming To An End In 2023, only 148 companies completed an initial public offering (IPO). This was the worst year on record and followed a 15% decline from the number of IPO's in 2022, another disappointing year.?In 2023, Arm was the sole blockbuster tech IPO. After a brutal two years with a paucity of tech IPOs, the market is poised for a resurgence in 2024.?Why? The Federal Reserve is set to reduce rates two to three times, an election year usually bodes well for the general economy regardless of party, and a number of tech companies have patiently waited to go public and now have the numbers to make it so.?Not all is rosy as consumers have entered a doom spend loop and have spent down $2.1T in savings since August 2021 and now sit on about 100B in savings (as of October 2023) down 90% in a short 26 months.?Yet, a drop in Fed Rates will pave the way."

Journalism is such a rewarding job because you're constantly learning. That was more true than ever for me in 2023. Reflecting on my coverage this year—my first year on the IPO beat—here are some things I learned (or were strongly reinforced): ?? A key unit of compensation for tech employees can actually... expire... before their company goes public. Stripe had to raise $7B privately to let employees to cash out. (https://lnkd.in/ej7KixSw) Foursquare actually let those stock grants go poof. (https://lnkd.in/ehhqUGNN) ?? Delaying IPOs has other major consequences, such as a founder ousting at Instacart (https://lnkd.in/eqRSJSZr). and expensive loans for employees at Databricks (https://lnkd.in/ePSU3RQi) ? Of course, once you get public, investors look past free cash flow if there's no prospect of future growth. Profitable Instacart is still trading far below its IPO price. (https://lnkd.in/eC3dM2mu) Even "safe" IPO playbooks can backfire at investment banks. (https://lnkd.in/eYDaG2A4) ? Pre-IPO companies in hot sectors are still getting rewarded by VCs for burning lots of cash in search of growth. Look at defense tech company Anduril (https://lnkd.in/e7qwEV7m) and enterprise firm Databricks (https://lnkd.in/eSWJPAxc) as examples—lots of cash burn, but still raised "up rounds" in difficult markets. ? People, and business leaders, don't really change. OpenAI board member Adam D'Angelo has run Quora in a stubborn, principled way that largely ignored PR and marketing. Those tendencies came through in his central role in Sam Altman's ouster (https://lnkd.in/eECvzkG9). Stripe cofounder John Collison has long been a business nerd who studied moguls like Larry Ellison. He was the man in charge of turning around Stripe's bloated cost structure. (https://lnkd.in/eVw3Kc3Z) More lessons ahead in 2024. DM me. Text, Signal: 561 818 3915. email: [email protected] :)

Great overview of 2023 and outlook for the future. Another factor to consider were the ultra high valuations on companies in 2021 and 2022. Hopefully the IPO market improves going into 2024, but personally I believe that this correction was needed.

This year's IPO landscape has been impressive, featuring tech giants, established firms, and startups. The main drivers are high market valuations and strong investor optimism, encouraging companies to raise capital in these favourable conditions. Yet, caution is necessary. Overvaluation has historically led to losses in unpredictable markets. The IPO boom brings both prospects and challenges, marking an exhilarating yet intricate period for investors and businesses. Happy to share insights on this topic in the recent LiveMint article, alongside industry peers. Keen to hear your thoughts on this trend. #ipo #investiment #trading

It’s been another?dismal year?for #IPOs globally, but the Middle East has shone as a hive of listing activity which is expected to stretch into 2024 Farah ElBahrawy

Looking forward to the spring of 2024, the tech industry is preparing for substantial changes. A wide range of companies, including established industry leaders and emerging startups, are getting ready for their first-ever initial public offerings. This alignment of IPO candidates from different age groups is reshaping the investment landscape. Spotlight on Seasoned Players: Reddit, Inc., with nearly 19 years of history, leads the way for a cohort of experienced tech companies. These firms, including Klarna, StubHub, Turo, SeatGeek, Ibotta, Inc., ServiceTitan, and SHEIN, have made the strategic choice to go public. They aim to provide their employees and investors with an opportunity to participate, even if valuations may not reach their previous heights. Rise of the New Generation: Concurrently, a new generation of tech startups is entering the IPO arena. For example, SKIMS, founded just four years ago by Kim Kardashian, is gearing up for a public listing. Even Liquid Death, a seven-year-old canned water company, has enlisted the services of Goldman Sachs to realize its IPO ambitions. A Transformative Year in Tech: The surge in tech IPOs in 2024 represents more than just a financial milestone. It underscores the tech industry's adaptability and resilience. Amid evolving market dynamics and changing investor sentiments, these companies are seizing the moment to transition into the public sphere. Navigating a Changing Investment Landscape: Financial professionals and investors are closely monitoring this IPO wave as they seek a return to a more stable IPO environment. Following two years marked by fluctuations driven by factors such as rising interest rates and evolving valuation models, the market is searching for a greater degree of predictability. In conclusion, 2024 holds the promise of being a transformative year in which tech companies of various ages leave their mark on the IPO stage. This alignment of industry veterans with innovative newcomers offers a glimpse into the dynamic and uncertain future of the tech IPO landscape. Source: Nasdaq, Fast Company, The Information #BigIdeas2024 #ipo2024 #startup #tech #VC?

It’s great to be included in @Stephanie Foreshee’s round up section for?#BigIdeas2024. My colleague Mark Schwartz and I comment on whether the large pipeline of VC-backed firms will go public. There has been a 10x increase in venture backed startups in the last 20 years, which is more than the ecosystem can handle. The overhang needs to come down either on the company side or through the amount of capital being deployed for the market to stabilize. The environment therefore is particularly challenging for companies that have been in the game for a while and still have a ways to go. As we look to 2024, for venture capital-backed companies, access to growth rounds that took the place of IPOs over the past several years is severely limited. Given low public market activity and high interest rates, LPs are seeking returns on their investments. ? However, that alone won’t push companies to the public markets immediately.?? ? They will have to deal with valuation issues brought about by the excess of venture capital the past several years, as well as economic headwinds that have shaped public markets recently such as inflation, recession concerns, geopolitical events and interest rates. In the right situations, VCs will be enthusiastic about an IPO versus another private round for their portfolio companies as they need to return capital to their limited partners.