Despite continued public demonstrations of optimism from venture capitalists and startup founders, the industry’s exit environment has yet to materialize. Many in the business community have speculated that this may be a result of prolonged market volatility and uncertainty, compounded by an increasingly competitive landscape.
An examination of data from PitchBook reveals that venture capitalists and public markets were both heavily invested in companies going public in 2021. This surge was unprecedented, with 296 companies issuing shares that year. However, the number of IPOs slowed dramatically in 2022, with only 28 filings reaching marketplaces. While it is still too early to tell why this trend transpired, it seems possible that investors became more cautious following a record-breaking year for IPOs.
Some of the top companies that have yet to go public include Instacart, Chime and Reddit. This is largely due to the returns that these companies have seen in the private market. It’s hoped that by the latter half of 2023, there will be a whopping number of exits for these businesses. We’re curious to know which company will make this jump first!
If the secondary market provides a good predictor of when a company will hit the market, then several of these businesses could be gearing up to go public very soon. For example, Square, Airbnb, and Uber all appear to be fairly close to debuting on the stock market. This might suggest that investors are confident in their respective companies’ prospects and that share prices will continue to rise as a result.
