As more private companies make the news by announcing their plans to go public, more eyes are on the IPO market. After a few quiet years, Initial Public Offerings (IPOs) are expected to pick up in 2024. IPOs, often regarded as the grand unveiling of companies to the public, bring with them a wave of anticipation and excitement as these companies are now broadly available to a greater number of investors.
In EquityZen's IPO Tracker we’ll share the latest IPO news and highlight the stories behind the companies making headlines.
Spotlight on Newsworthy IPOs
Week of April 15, 2024
Ibotta
- Ibotta plans to raise up to $551 million priced between $76-84/share in its NYSE IPO.
- The company generated $320 million in revenue in 2023.
- Key investors include Founders Fund, Koch Industries, and Walmart.
Rubrik
- Rubrik, a California-based developer of data security company, plans to price its IPO between $28-31 in an offering aimed to raise up to $713M. At the top of the range, this would value the company at $5.4B. The company last raised funding in 2019 at a $3.3B valuation.
- Rubrik generated $628 million in revenue for the year ending January 31, 2024, fueled by its focus on a subscription revenue model, but remains unprofitable.
- Key investors include Lightspeed Venture Partners and Greylock Partners.
Week of March 25, 2024
Ibotta
- Ibotta, the cash-back and rewards company filed its S-1 in preparation for a 2024 IPO on the New York Stock Exchange. The thirteen year old company touts 52% revenue growth year-over-year from over 2,400 CPG brand customers and is recently profitable. The company last raised a Series D in 2019 and was valued at $1.08 billion at the time.
Week of March 18, 2024
- Reddit, the 15-year old social media platform, will make its eagerly awaited public market debut this Thursday on the New York Stock Exchange. The company is looking to raise up to $750M at up to a $6.4B valuation. Last year the company achieved over $800M in revenue, but is not yet profitable.
- Check out the latest about Reddit’s IPO from our team:
- In the Press: EquityZen’s team has shared insights on Reddit’s IPO with a variety of media outlets including
- Chief Investment Officer Magazine (3/12/2024)
- Marketwatch (2/23/2024)
- Bloomberg Technology (2/23/2024)
- Yahoo Finance (2/21/2024)
- Bloomberg Technology (1/29/2024)
- Who stands to gain the most in Reddit’s IPO? Check out our analysis of Reddit’s Largest Shareholders.
- In the Press: EquityZen’s team has shared insights on Reddit’s IPO with a variety of media outlets including
Astera Labs
- Astera Labs, a semiconductor connectivity company is preparing for an IPO on NASDAQ later this month with the goal of raising up to $$534 at a $4.5B valuation. The company disclosed $115M in revenue in 2023, up 45% from the prior year, but remains unprofitable.
What is an IPO?
An IPO marks the transition of a privately held company into a publicly traded entity, allowing it to raise capital by offering shares to the public for the first time. This critical financial event is a pivotal moment in a company's lifecycle, opening the doors to a broader investor base and ushering in increased scrutiny and transparency. Typically, only institutions and accredited investors can invest in private companies. With an IPO, the general public can invest in companies. As public companies these businesses must now disclose detailed information about their financial and business prospects, helping investors to make informed investment decisions. It is an important milestone for many companies as they look to achieve their next phase of growth.
The IPO process involves many steps, from selecting underwriters and determining the offering price to navigating regulatory requirements. Companies opt for IPOs for various reasons, whether to fund expansion plans, pay off debt, or provide an exit strategy for early investors, especially as companies stay private longer. Currently, there are over 1,200 Unicorn companies, valued at over $1B, in the private markets, many of which are putting plans in place for a public market debut.
An IPO provides access to these innovative, growing companies beyond the accredited and institutional investors who typically have investment access while these companies are still private. While there are many benefits to going public, going public comes with its own set of challenges, including heightened public scrutiny, regulatory compliance, and the need for effective communication with a much larger set of stakeholders.
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The Current IPO Landscape
The landscape of IPOs is ever-evolving, shaped by economic trends, investor sentiment, and global events. After a subdued year in 2023, the IPO market in 2024 is showing signs of life, albeit cautiously. Thus far this year we’ve seen 33 US IPOs, a 22% increase from the same period last year, suggesting that the market may be gaining momentum. Despite this, the absence of clear winners leaves some investors wary.
Despite this uncertainty, the macroeconomic environment offers a promising backdrop for potential IPO candidates. Stable inflation, robust GDP growth, and low unemployment rates paint a picture of economic strength. Furthermore, with the possibility of stable interest rates and even cuts on the horizon, the stage is set for a welcoming market environment.
A growing IPO pipeline indicates that many companies are eager to capitalize on these favorable conditions, with an eye toward launching before the onset of election season volatility. Projections from industry experts at Renaissance suggest a potential surge in IPO activity, with expectations ranging from 120 to 170 deals in 2024, potentially doubling the levels seen in 2023. Furthermore, heads of major exchanges like the NYSE and NASDAQ, are discussing the depth of their IPO pipelines, indicating a strong appetite for new listings. This sentiment is echoed by the pent-up demand for IPOs following a relatively quiet period in the market.
However, the road to a successful IPO is not without its challenges. Over 1,200 Unicorn companies globally, valued at over $3.8 trillion in aggregate, are waiting in the wings, seeking liquidity and growth opportunities. This demand is driven by various factors, including the expiration of options and RSUs for early employees, the need for early venture capitalists to return capital to their limited partners, and the stagnation within the growth stage financing market.
Furthermore, the changing dynamics between public and private markets add another layer of complexity. The decline in the number of public companies over the past few decades, coupled with the rise of unicorns—particularly those that have not raised funds since 2021—highlights the shifting landscape of investment opportunities.
For companies eyeing an IPO, the path to success requires more than just going public; it demands strong brands, profitability, and robust growth trajectories. Many venture-backed firms may face the harsh reality of a "downround" IPO if they previously raised capital during the market peak in 2021, something we saw with Instacart’s IPO last fall.
So while the IPO market in 2024 holds promise, navigating its complexities requires a strategic approach. Companies must assess their readiness for public listing, considering factors such as market conditions, investor sentiment, and long-term growth prospects as they consider their public market debut.
The Importance of IPO News
As financial enthusiasts and investors, staying abreast of the latest IPO news is not merely an option; it's a strategic imperative. We find that EquityZen investors who are keenly interested in the innovations happening in the private markets are eager to follow IPO news as it gives a glimpse of how future IPO candidates may perform in the public markets, an important factor when considering a private company investment.
After all, IPOs often catalyze market movements. News of a successful IPO can inject positivity into the market, driving investor confidence and potentially boosting overall stock prices. A successful IPO can encourage other private companies to also prepare for a public market debut.
Conversely, a poorly received IPO or unexpected challenges faced by a newly public company can create ripples of uncertainty, affecting not only the company in question but also its industry peers and the broader market. When IPOs underperform, fewer private companies are eager to also IPO and meet a similar fate.
The frequency and success of IPOs can serve as an economic indicator. A surge in IPO activity may suggest a robust economy, reflecting a favorable environment for companies to go public. Meanwhile, a slowdown in IPOs or a string of underperforming offerings may signal economic challenges, prompting investors to adjust their portfolios accordingly or take a less risky investment approach.
Finally, IPO news offers a glimpse into industry trends and emerging sectors. Tracking industry-specific IPOs allows stakeholders to assess the overall health and trajectory of particular sectors within the market, as well as informing what private companies in these industries might be worth.
In total, IPO news can provide a pulse on the overall macroeconomic environment, as well as investor sentiment around certain sectors. This news can also highlight some of the innovations that will shape the future investment landscape.
Stay Informed!
The IPO market is important for both public and private market investors to follow, as it is a good indicator of overall investor sentiment.
Interested in staying up-to-date on the latest IPO news? Be sure to follow EquityZen on social media where we share all the latest news and insights from our team.
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