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IPO wave is coming, and investors spy a payday
[SAN FRANCISCO] Jason Pressman spent Thursday morning cheering from the balcony of the New York Stock Exchange as shares of the software firm Zuora, which he backed in 2008, began trading.
By the market's close, Zuora's stock had soared 43 per cent, making his venture capital firm's US$17 million investment in the company worth roughly US$150 million.
"Not bad at all," Mr Pressman, a venture capitalist at Shasta Ventures, said by phone Thursday night.
Mr Pressman and many other Silicon Valley venture capitalists expect the windfalls to continue.
Already, 2018 has gotten off to a fast start. Two of the biggest startups still sitting on the sidelines - Dropbox, an online file storage company, and Spotify, the streaming music service based in Sweden - successfully went public over the past month. Tech IPOs have raised more than US$7 billion this year - more than all of 2015 and 2016, and more than half the US$13 billion they raised last year, according to the market-data firm Dealogic.
The bullishness is a far cry from 2017, when Snap, the maker of Snapchat, went public - and then promptly fizzled. Blue Apron, which delivers meal kits, also saw its share price collapse after its IPO last year.
The tide has turned, venture capitalists said. "I talk to bankers all the time and they're like: 'Dude, we have stuff coming down the pike. There's a bunch of offerings teed up,'" said Rob Hayes, a general partner at First Round Capital, who led a US$1.5 million funding round in Uber in 2010 that valued the company at US$4 million. Uber is now worth US$68 billion.
Some of the biggest-name privately held tech companies have recently made moves that position them to go public in the next year or two. Dara Khosrowshahi, Uber's chief executive, has said he plans to take the company public next year. Lyft has held talks with investment banks to explore going public. And Airbnb has begun bringing independent directors onto its board, a move that is typically part of the preparations for becoming a public company.