Despite many experts and investors projecting another poor IPO performance in 2023, some experts have optimism.
Key Details
- The year 2022 produced few tech IPOs and those that did appear performed poorly. IPOs aren’t anticipated to do much better this year, but performances from a few key companies could change that expectation.
- By next fall, some investors believe that tech IPOs could start performing better, especially if particular companies get involved.
- Payment service Stripe and Elon Musk’s SpaceX are two companies to watch this coming year.
- Stripe—valued at nearly $95 billion—will likely go public soon. The company already brings in billions in revenue, and investors eagerly wait for it to go public.
- While other companies have struggled in the last two years, SpaceX has continued to grow. Forbes reported that the company’s valuation is about $143 billion.
- In recent months, the company reported more than 1 million subscribers to Starlink.
- The satellite-based internet service Starlink launched just two years ago, and without any marketing, has managed to quadruple its users.
Why it’s news
In 2022, the number of companies going public was down 88% from the previous year. Axios stated that 2022 was “the worst year for U.S. IPOs since 1990.”
Companies brave enough to attempt going public were met with poor results. Rental-car service Getaround is one example of a company’s failed attempt to enter the market. Over the last month, the company’s shares have fallen around 90%.
Disappointment in 2022 stands in stark contrast to the frenzy of 2021. Tech startups like Coinbase, Bumble, and Confluent made splashes in 2021. Now, like many tech companies, these startups are beginning to trend downward.
Startups like Stripe and SpaceX could change the narrative, but whether or not these companies are ready to go public next year is yet to be seen.
While Stripe currently brings in billions in revenue, like most tech companies, it has suffered in the post-pandemic world. E-commerce has slowed since the pandemic, cutting into Stripe’s revenue. The company also laid off more than 1,000 employees in 2022.
While SpaceX has enjoyed success over the last two years with Starlink, owner Elon Musk’s involvement with Twitter could affect the company’s decision to go public.