The good news is that when we do get the IPO train back on the rails, we should be able to see a pretty good run of public-market debuts. Let’s talk about why. The Exchange explores startups, markets and money. Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday. If you delve back through Silicon Valley Bank research, which now feels rather different than it did two weeks ago, you can get a pretty good idea why institutions are not expecting a flurry of IPOs in the near future. In its State of the Markets report for the first half of 2023, SVB predicted that the market for “U.S. VC-backed tech IPOs will likely remain dormant in H1 2023.” Thus far, that’s been 100% correct. However, the bank also predicted that as “the market gets clarity on the [interest] rate ceiling [and] forward revenue multiples align with long-term averages and pent-up demand builds from institutional investors” and unicorns, we should expect no fewer than ten IPOs in the back-half of the year from venture-backed companies. When we first read that a while ago, it felt a touch optimistic. Why would we go from zero to double digits in such a short timeframe? We’ve since gotten a bit more context. TechCrunch+ recently spoke with Arjun Kapur, a managing partner and founder at Forecast Labs, on the IPO question. (Forecast Labs is a sister entity to Comcast Ventures. The latter is a venture shop that invests in areas of strategic interest to its parent company, Comcast NBCUniversal, a corporate amalgamation that stretches from Internet access to cable television to content itself. Forecast, in contrast, trades equity for access to television advertising, essentially offering lower-than-market rate CPA-based advertising on the tube for equity. It’s a pretty interesting model for companies that want to reach a larger consumer audience, but at a discount.)
To my infinite chagrin, we’re probably not getting tech IPOs until later this year by Alex Wilhelm originally published on TechCrunch
