Much to my chagrin, we probably won’t get tech IPOs until the end of the year
But there are reasons to be optimistic, we will have a good crop of public offers
The IPO market 2023 so far has been a chicken egg, and we probably won’t get any interesting IPOs for another quarter or two. It’s incredibly sad for your friendly local TechCrunch+ reporting team who love an S-1 more than anything else.
The good news is that when we get the IPO train back on track, we should be able to see a pretty good streak of public market debuts.
Let’s talk why.
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If you dig into Silicon Valley Bank’s research, which looks quite different now than it did two weeks ago, you can get a pretty good idea of why the institutions aren’t expecting a wave of IPOs in the near future. In its H1 2023 State of the Markets Report, SVB predicted that the market for “venture capital-backed U.S. tech IPOs is likely to remain dormant in the first half of 2023.”
So far it has been 100% correct.
However, the bank also predicted that as “the market gets clarity on the [interest] ceiling rate [and] futures earnings multiples align with long-term averages and pent-up demand from institutional investors” and unicorns, we should expect no less than ten IPOs in the second half from funded companies by venture capital.
When we first read this a while ago, we were a little optimistic. Why would we go from zero to double digits in such a short time?
Since then, we have a little more context. TechCrunch+ recently spoke with Arjun Kapur, Managing Partner and Founder of Forecast Labs, on the subject of the IPO.
(Forecast Labs is a sister entity to Comcast Ventures. Comcast Ventures is a venture capital firm that invests in areas of strategic interest to its parent company, Comcast NBCUniversal, a business merger that spans access Internet to cable TV to content itself In contrast, trades equity for access to TV advertising, essentially offering CPA-based advertising at a lower than market rate on the tube against fairness. It’s a pretty good model for companies that want to reach a wider consumer audience, but at a discount.)