In today’s world of instant media coverage, all it seems to take is one idiot who says they’re worried about the state of the economy for the economy to take a dip as people freak out. So, last year when someone started propagating out media questioning whether we were in another tech bubble, the question alone was enough to have an effect. Brian Warmoth takes a look in the following article at what we can expect in 2016.
5 Things You Should Know About the 2016 IPO Window
The question “Are we in a tech bubble?” set the tone for tech companies’ initial public offerings in 2015 – and the data heading into 2016 makes it clear that may be the case. The good news, meanwhile, is that we can use that data to make some predictions about what’s in store.
Larger amounts of money reached fewer IPO-bound tech companies in 2015 than in 2014, according to analysis in the new “2016 Tech IPO Pipeline” report published Thursday by CB Insights. For the fourth year in a row, researchers assessed how many tech companies appeared to be ripe for IPOs in the coming year, and for 2016 the analysts cited 531 companies, including Airbnb, Pinterest and Uber, which may have the option – if not a obligation to investors – to finally go public.
Thanks to recent events, including a massive proliferation of billion-dollar unicorn valuations for private tech companies, the Federal Reserve’s Thursday decision to raise interest rates and other developments, the 2016 IPO marketplace will be have a very different climate than 2015’s did. And whether VCs like it or not, the effects may be unavoidable. Here five things that anyone watching emerging tech IPOs should be aware of in the new year.
1. Why some companies may be forced to IPO, whether they want to or not
“There are some companies on this year’s list who may be forced to go public because their valuations priced them for perfection and their results came in somewhere below perfect,” CB Insights CEO Anand Sanwal wrote in the new report. “And as a result, the private markets may close up on these firms forcing them to go public.”
That situation is new, Sanwal asserted, and it has far-reaching implications for anyone in leadership or investment positions who hope to see their unicorn go public under ideal circumstances. Unless 2016 serves up an unexpected wave of re-inflation for valuations, some firms may need to write off tens – if not hundreds – of millions of dollars from their wishful exit totals.
2. Which lesser-known B2B names are in the pipeline
“Many of the highly likely IPO candidates for 2016, as you will see, are not household consumer names,” Sanwal said. “They tend to be focused on less sexy areas (of course, this depends on your perspective) like analytics, datacenter, security and application integration.”
Many consumers are of course aware of names such as Pinterest, Postmates and Warby Parker. And it’s hard to find a week of news these days that doesn’t include important headlines about Airbnb or Uber. That said, some of the heaviest hitters on a potential 2016 IPO calendar could include names known much better in the enterprise world that are associated with data virtualization, application connections and identity management – things aren’t usually found with gift cards, under Christmas tree or in logo-speckled vehicles.
3. Which companies are most likely to IPO in 2016
CB Insights uses a proprietary algorithm to predict which tech companies are closest to taking the plunge toward going public, and for 2016 it cited …