The IPO market is iced over. But it won’t always be.
For much of 2022, the IPO window has been fairly firmly shut—with startups pulling plans to go public or waiting for a better market to hop into, especially with shares of tech companies down well over 20% year-to-date (by the Nasdaq’s measure). But although the public markets may not be so welcoming for a flood of new entrants any time soon (especially with a likely recession in the cards for 2023), companies will, someday, go public again. And there are a few notable startups you should be watching for when the pipeline starts to thaw.
Fortune’s Lucy Brewster recently delved into what might await public markets investors—and, by extension, the startups’ backers—when the IPO floodgates open once more. Lucy writes:
Yet despite the fact that there won’t be a parade of IPOs by the end of this year, there will be huge opportunities for investors when the over 1,200 unicorns worldwide begin to enter the public market. “We have a robust pipeline of companies at the NYSE that are looking to go public. It’s really a matter of the timing falling into place,” explained Michael Harris, global head of capital markets at the New York Stock Exchange. And it takes only a few well-received debuts to change the sentiment. “After a few well-capitalized and well-known companies go public and perform well, we expect the focus will be back on growth—the elixir of Wall Street,” said [Barrett] Daniels [U.S. IPO services co-leader at Deloitte].
For investors making a bet on an IPO prospect, it’s important to consider how the company is positioned for growth—and whether it has the revenue stream ([Peter] Cohan [a business professor at Babson College] says at least $100 million annually) to go public.
Many companies, as Lucy notes, have either postponed their IPOs, recently filed to go public, or have analysts positing they are ripe for an eventual public debut. A couple noteworthy names Lucy highlights? Car-sharing company Turo, corporate travel expenses startup TripActions, and, of course, the home of WallStreetBet-ers—Reddit. For the rest of the companies poised to tap the market once things heat back up, read Lucy’s story here.
As for when investors could see more startups hiring bankers and planning a debut? “They’re waiting for the time when the market starts to calm down from a volatility perspective,” NYSE’s president Lynn Martin said onstage at Fortune’s Most Powerful Women conference earlier this week. By Martin’s estimation, “Until the VIX is consistently below 20, I don’t think the floodgates are going to open for those companies who have been talking to us and we’ve been working with for a while.”
Uniswap’s good news: The crypto market may be in the throes of a so-called crypto winter, but some startups are still managing to fuel their coffers with VC funding. Uniswap Labs, a huge player in the DeFi, or decentralized finance, space, raised $165 million in a Series B round at a roughly $1.7 billion valuation, the company announced Thursday. The round was led by Polychain Capital, with firms including a16z and Paradigm joining in. The fundraise comes at a time when funding for crypto companies has plummeted, while the industry is still grappling with the market downturn, with coins like Bitcoin and Ethereum off roughly 70% from their highs last year.
See you next week.
Anne Sraders
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- TripActions, a Palo Alto, Calif.-based travel and expense management company, raised $154 million in Series G funding. Group 11, Zeev Ventures, A16Z, Greenoaks Capital, Base Partners, and Lightspeed Venture Partners invested in the round.
- GoHenry, a New York-based prepaid debit card and financial education app for kids and teens, raised $55 million in funding. Edison Partners, Revaia, and Nexi invested in the round.
- Katana, a Tallinn, Estonia-based manufacturing ERP software company, raised $35 million in Series B funding. Northzone led the round and was joined by investors including Lightrock, Atomico, and 42CAP.
- Vita Therapeutics, a Baltimore-based cell engineering company, raised $31 million in Series B funding. Cambrian BioPharma and Solve FSHD co-led the round and were joined by investors including Riptide Ventures, Cedars Sinai, TEDCO, and others.
- Endor Labs, a Palo Alto, Calif.-based software reuse platform for development and security teams, raised $25 million in funding. Lightspeed Venture Partners, Dell Technologies Capital, Sierra Ventures, and other angels invested in the round.
- Zen Educate, a London, U.K.-based platform that connects schools with temporary and full-time teachers and teaching assistants, raised £19.3 million ($21.83 million) in Series A extension funding. Brighteye Ventures led the round and was joined by Adjuvo and others.
- Astra, a San Francisco-based card-to-card funding service provider, raised $10 million in Series A funding. FPV Ventures led the round and was joined by investors including Slow Ventures and Allegis Capital.
- Xiao Chi Jie, a Seattle-based direct-to-consumer Chinese food brand, raised $10 million in Series A funding. Imaginary Ventures led the round and was joined by investors including actor Simu Liu, Goldhouse Ventures, Hyphen Capital, and others.
- Parity, a Toronto, Canada-based HVAC operations proptech company for mid-rise and high-rise apartment buildings and hotels, raised $8 million CAD ($5.83 million) in funding. Wyse, RET Ventures, and ArcTern Ventures invested in the round.
- Continue AI, a New York-based sustainability intelligence platform, raised $5.7 million in seed funding. Grove Ventures and Maple Capital co-led the round and were joined by investors including Ride Ventures, Liquid2, and Kindergarten Ventures.
PRIVATE EQUITY
- ASG, a portfolio company of Alpine Investors, acquired Sierra Interactive, Louisville, Ky.-based lead generation software company. Financial terms were not disclosed.
- Jones Fish Hatcheries & Distributors, a Fort Point Capital portfolio company, acquired Advanced Technical Aquatic Control, a Lebanon, Ohio-based pond and lake management services provider to developers, land management professionals, and private homeowners. Financial terms were not disclosed.
EXITS
- Pamlico Capital acquired InRule Technology, a Chicago-based intelligence automation platform, from OpenGate Capital. Financial terms were not disclosed.
OTHER
- Alphawave IP Group acquired Banias Labs, a Herzliya, Israel-based optical digital signal processing chip developer for data centers, for approximately $240 million.
- PLAYSTUDIOS acquired Brainium, a Portland, Ore.-based games publisher, for $70 million.
- DroneDeploy agreed to acquire StructionSite, an Oakland, Calif.-based ground reality capture provider for the construction industry. Financial terms were not disclosed.
IPOs
- Riyadh Cables Group, a Riyadh, Saudi Arabia-based power and telecommunications cables manufacturer and exporter, is planning an initial public offering that could raise about $400 million, according to Bloomberg.
- Magrabi Medical Group Holdings, a Jeddah, Saudi Arabia-based optical retailer and operator of eye clinics, is considering an initial public offering of its hospitals business in Saudi Arabia as soon as next year, according to Bloomberg.
SPACs
- Zoomcar, a Bengaluru, India-based car-sharing platform, agreed to go public via a merger with Innovative International Acquisition Corp., a SPAC. A deal would be valued at $456 million.
FUNDS + FUNDS OF FUNDS
- Veritas Capital, a New York-based investment firm, raised $10.65 billion for its eighth fund focused on growth across its portfolio companies.
- Lightrock, a London, U.K.-based private equity platform, raised €860 million for a fund focused on European and North American growth-stage companies in the energy transition, decarbonizing industries, sustainable food and agriculture, and sustainable transportation sectors.
- Capital Dynamics, a London, U.K.-based asset management firm, raised €521 million for a fund focused on solar energy projects in Europe.
PEOPLE
- AE Industrial Partners, a Boca Raton, Fla.-based private equity firm, hired Reggie Brothers as an operating partner. Formerly, he was with Bigbear.ai.
- The Halifax Group, a Washington D.C.-based private equity firm, promoted Amit Swaroop to principal.
- Hambro Perks, a London, U.K.-based international investment firm, hired Laura Noorani as an investment manager. Formerly, she was with Bridges Fund Management.
- Sonoma Brands Capital, a San Francisco-based private equity firm, promoted Shahir Amin to managing director, John Wilson to vice president, and Ben Jang to senior associate.
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