The IPO market is heating up again, but it won’t change how fast companies go public

TechCrunch | 4/23/2019 | Staff
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It’s been an exciting couple of months for startup employees and public market shareholders alike, as a growing number of brands that have talked about going public for some time are finally marching out the door and, on the whole, receiving enthusiastic receptions. Lyft, Zoom, PagerDuty, and Pinterest all priced above their marketed ranges in splashy public offerings. Uber is meanwhile veering toward what’s expected to be the biggest IPO in years by seeking what’s rumored to be a $100 billion valuation.

But industry watchers hoping that companies might start going public sooner as they once did may be in for some disappointment. At least, according to industry players with whom we’ve spoken, a broader shift isn’t likely to happen soon – – if ever — again. In fact, absent a dramatic development, it’s far more likely that startups will continue staying private as long as they possibly can.

Numbers - Story - Investment - Bank - Scenic

The numbers largely tell the story. According to the investment bank Scenic Advisement, private investors doused technology and biotech companies with $130.9 billion last year — far outpacing the $50.3 billion raised via IPOs and follow-on offerings. Meanwhile, says Scenic, the total value of private market investment surged 57.8 percent in 2018, the tenth consecutive year in which private share sales were worth more than those in public markets. That trend continues, too, with venture investment flows far outpacing public-market fundraising so far in 2019.

Altogether, IPO proceeds totaled $47 billion last year, compared with $130 billion provided to privately held companies, and that ratio might not change much in 2019 despite all the IPO hoopla right now. “In the early part of this decade, there was relative parity between how much money was raised in venture and how much was raised through IPOs,” says Shriram Bhashyam, a founder and advisor at the secondary...
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