Investors' hopes last year for a strong IPO pipeline in 2024 have faded, if not disappeared entirely, as we move into the second half of the year.
This year, four venture-backed tech companies (Reddit, Astera Labs, Ibotta, and Rubrik) all held IPOs in March and April, making it seem like they might be able to generate the momentum investors were hoping for in 2023. However, IPO lawyers and secondary investors recently reported that despite these four accomplishments, the IPO market will not fully reopen until 2025 due to macroeconomic conditions like the upcoming presidential election and high interest rates.
This year looks set to be better than 2023 and we are likely to see a few more public filings throughout the year. Companies such as Klarna and Shein have reached out to bankers and appear to be close to achieving their goal, but their IPO timelines remain uncertain.
More often than not, it may be easier to identify who won’t be IPOing. The reason is that we’re not expecting companies to go public this year, but rather we’re expecting who will. Some CEOs of late-stage startups have stated outright that they won’t go public in 2024, while other companies have made financial moves that indicate a public listing isn’t imminent. We don’t anticipate these VC-backed tech companies going public this year.
skims
Kim Kardashian's underwear and loungewear brand Skims isn't looking at the IPO market this year. Despite its young age, the 5-year-old company, valued at nearly $4 billion, was named as one of this year's potential IPOs by many investors. However, According to The Information, the company will be launched in the first half of 2025.
Chemistry
Since withdrew its IPO plan in 2022 Due to market conditions, Chime, the 12-year-old bank and fintech startup, has been on several investors’ IPO contenders list. According to The Information, the company appears to be approaching bankers for an IPO, but not for a 2024 listing. According to secondary data platform Caplight, Chime’s funds have increased the fintech’s valuation by 25% in the past six months. This is a positive change after nearly two years of decline.
CoreWeave
In May, CoreWeave, a New Jersey-based artificial intelligence company, won a round of Serie C of $1.100 billion, giving it one of the largest late-stage venture funding rounds of the year. A few weeks later, the company announced a $7.500 billion debt capital raise. While a sales round like that indicates CoreWeave won't go public this year, The Information has reported according to sources at the company that is working on its plans to go public by 2025. According to data from Caplight, the 7-year-old startup has also seen a 42% increase in its valuation since its Series C, proving that it doesn’t need to rush into the public market and still has room to grow while remaining private.
Sword Health
Sword Health founder and CEO Virgílio Bento has said that virtual physical therapy company Sword Health intends to go public, but not before 2025. The company recently held a $100 million employee stock tender offer in addition to raising $30 million in new capital at a $3.000 billion valuation, showing that it is in no rush to enter the public markets.
Plaid
Plaid CEO Zach Perret said at an Axios event in March that the business-to-business fintech industry had no plans to go public in 2024This corroborates TechCrunch's Mary Ann Azevedo's statements last October about the company hiring a new CFO. Her most recent valuation of Plaid was $13.400 billion in 2021.
Figma
While design unicorn Figma hasn’t directly announced its intention not to go public this year, its actions seem to indicate that it will. In May, the company held a public offering to allow existing investors and employees to sell their Figma shares on the secondary market if they wished. Typically, this type of liquidity event doesn’t happen right before the more significant liquidity event of an IPO. The tender offer valued the startup at $12.500 billion — less than the $20.000 billion Adobe was willing to pay, but also higher than the $10.000 billion valuation of the previous primary round Figma received.
Stripe
Earlier this year, Stripe also held a tender offer to buy out the shares of its current and former employees. The fintech unicorn announced a secondary sale in February that valued the company at $65.000 billion. While this amount is lower than the $95.000 billion valuation the company received in 2021, the company is gaining value. This indicates that Stripe will likely try to increase that valuation before going public.
Databricks
Much to the dismay of venture capitalists who predicted Databricks would be the first company to go public last year, the cloud AI platform is also unlikely to be on the agenda for 2024. Last fall, the company raised an additional $500 million in capital in a Series I round that valued the startup at $43.000 billion. T. Rowe Price was one of the investors that raised money in this round, even though companies don’t typically raise money before a public listing since it’s part of the IPO process. Those investors don’t typically object to IPOs. Databricks is well-positioned to be one of the first companies to go public in 2025, if it chooses to do so.
Canva
Canva likely won't go public until at least next year, and the design company could wait until 2026. In March, Cliff Obrecht, the co-founder and husband of Canva CEO Melanie Perkins, told StartupDaily, an Australian and New Zealand tech publication, that an IPO would take place in at least 12 months, if not sometime in 2026. However, Obrecht also confirmed that the startup will look to go public in the United States, fortunately for American investors.
