Nothing will match the hype or size of the Saudi Aramco IPO planned end 2019 or early 2020.
Aramco is seeking a $2 trillion valuation. The recent drone attacks on Saudi oil production facilities set Aramco back daily production of 5.7 million barrels, but the oil giant reportedly hired nine banks to help lead the IPO.
But no year has seen such massive multi billion dollar IPOs make an appearance, although not all are attracting interest.
According to Wall Street, several prominent companies are slated to debut at the end of 2019 or early in 2020.
“This has been the year when cloud-based companies and on-demand services came of age,” Santosh Rao, head of research at Manhattan Venture Partners, told Fortune.
Kennedy says the 2nd quarter saw 20 tech companies raise almost $15 billion—and that, in the last five years, “only one other quarter has had $10 billion or more [raised] in the tech sector,” he said.
“[IPOs this year] need to show two things. One, their top-line is growing, and second, there is definitely a path to profitability,” he says.
Who’s in line ?
The We Company (formerly aka WeWork) keeps pushing off their long-awaited IPO—and now it might come as late as October. But following a myriad of problems plaguing the coworking company—including corporate governance issues, a sky-high private valuation, and hefty liabilities—investors might even be losing their appetite for the offering altogether. From a $47 billion private valuation, the company was ready to sell shares at $10 billion in valuation after posting losses of $1.9 billion on $1.8 billion revenue.
Airbnb, now a household name, just announced it would file for its IPO in 2020. The company said they returned over $1 billion in revenue in the 3rd quarter of 2018, and is valued at $31 billion.
Robinhood, a millennial trading app is planning for an IPO, and on track for a $7 to $8 billion valuation due to recent investment of around $200 million, according to CNBC last May.
Software companies attracting IPO interest
Other years have had more tech IPOs than 2019, but there’s never been a year that’s minted so many big ones.
Datadog, the provider of analytics and monitoring tools, became the fourth cloud software company to go public in 2019 and attain a market cap of at least $10 billion. Videoconferencing company Zoom, chat app Slack, and cybersecurity vendor Crowdstrike are the three others.
These 4 companies are showing high customer retention rates, thanks to efficient sales and marketing spend, also increasing the size of their current contracts.
Datadog recorded retention in its latest quarter of 151%, while Crowdstrike reported a retention rate of 147% as of January, Slack’s was 143% and Zoom was at 140%.
Datadog’s revenue increased 82% to $83 million in the quarter that ended in June. Zoom posted 96% growth in its most recent quarter, just ahead of Crowdstrike at 94%. Slack was at 58%.
While 14 11-digit companies have gone public since the beginning of 2012, this is the first year with more than two that reached $10 billion in value.
“It’s just the latest sign that public market investors are hungry and willing to pay up for high-growth technology companies as long as the financials make sense, even as they shun cash-burning consumer businesses like Uber, Lyft and WeWork, said CNBC.
According to Gartner, the global market for public cloud services will climb 17.5% this year to $214.3 billion.