Given the recent Whatsapp acquisition, with its (according to some) crazy valuation, and a recent FT article on crazy valuations of tech stocks, I thought it might be a good time to look at the upcoming batch of potential large tech IPOs, their most recent valuations, and see which ones might be the first ones to list.
- Spotify: Spotify, the Swedish online music streaming service, has made a number of moves recently that hint on an upcoming IPO. Just this week, it acquired the company behind one of its music recommendations algorithm, which was seen as tying up a loose end pre-IPO, and drew up a credit line. It was last year valued at $4bn based on equity sold, but will probably be valued higher when it goes public. Likelihood of 2014 IPO: High.
- Square: Square, also known as Jack Dorsey’s “other” company, has an implied valuation of $5bn, and was earlier rumored to have an IPO this year. It is seeking to make “receipts sexy” (good luck!) and to upend store payments (much needed). Lately, it has been suggested this IPO might not come this year. Likelihood of 2014 IPO: Low.
- Dropbox: Dropbox, the cloud file storage service, just got valued at $10bn (!), so it definitely leads the valuation game of the next bunch. It has a large and growing user base, and the users really like the brand, but it’s hard to justify that price tag for a company with such small barriers to entry. All they have right now is a lead in building an (admittedly strong) consumer brand. There might also be some built-in inertia for users to move once it’s installed on all their devices. Likelihood of 2014 IPO: High.
- Box: The B2B cousin of Dropbox. Also likely to IPO this year. Seen as a rival to Dropbox, both who gets top IPO first and in terms of dominating the cloud. For now, they still focus on different customers, but are likely to overlap at a later stage. Valued at $2bn in December. Likelihood of 2014 IPO: High.
- Uber: Valued at $3.4bn in the fall when Google took a stake, which is huge (Lyft, its fellow car service, is valued at $700 million). Currently solving the problem of getting people from point A to point B, but in the future, might become a platform for solving many other similar day-to-day problems. Has a nice, “Google-like” approach to solving business problems. Expanding rapidly in Asia and everywhere. Has said IPO is still far off. Likelihood of 2014 IPO: Low.
- Weibo: Before posting profits recently, valued at $7bn. After disappointing results, now a perhaps more reasonable, albeit still huge, $5.1bn. Known as “China’s Twitter”, it should theoretically have a huge potential, with the regular Twitter blocked, but its growth has been stalling and users have been moving to WeChat. Needs to IPO soon. Likelihood of 2014 IPO: High.
- Markit: An innovative financial information provider. Competing with Thomson Reuters and Bloomberg. Looking to IPO later this year, with a valuation of $5bn. Revenues of $861 million in 2012, so more established than some of the other companies on this list. Temasek took stake last year. Likelihood of 2014 IPO: High.
- Alibaba: The Chinese ecommerce company will probably be the biggest IPO of them all, with its dominant position in the Chinese ecommerce market, which is forecast to be worth $420bn in 2020. Valued at $153bn. IPO has been rumored to happen for quite a while, and will probably happen this year. Likelihood of 2014 IPO: High.
- Snapchat: Famously turned down Facebook’s $3bn offer last year. No talk of IPO recently. Valued at $2bn now. Likelihood of 2014 IPO: Low.
- Pinterest: The online scrapboard, and now the third biggest social network. Valued at $3.8bn late last year. Not likely to IPO anytime soon, perhaps more likely to be acquired by someone instead. Likelihood of 2014 IPO: Low.
- Airbnb: The sharing economy darling, and a classic Blue Ocean Strategy (leveraging the previously underutilised and zero-valued resource of empty apartments).Valued at $2.5bn last year. No immediate signs of IPO. Likelihood of 2014 IPO: Medium.
- Xiaomi: “China’s Apple.” Valued at $10bn. Has said won’t IPO in 5 years. Likelihood of 2014 IPO: Very low.
- Palantir: The big data/security company. Valued at $9bn. Has mostly stayed under the radar, and might stay that way for the foreseeable future. Likelihood of 2014 IPO: Very low.
Any other one you look forward to? Let me know in the comments or @malcmur.