After a slow period for tech industry initial public offerings (IPO), deals have picked up in 2018, with big names like music streaming giant Spotify Technology SA (SPOT), software company DocuSign Inc. (DOCU), cloud storage platform Dropbox Inc. (DBX), and event ticketing leader Eventbrite Inc. (EB) making their public debut.
This year's resurgence in tech IPOs has been the strongest the market has seen since 2014. Whether or not 2019 can beat that record depends on how much capital this growing list of companies can raise before their anticipated market debuts.
Uber, Lyft, and Airbnb High on Investors' Radar
Among the tech companies expected to IPO this year, ride hailing industry pioneer Uber Technologies Inc. will be one of the most closely watched. The company is currently valued at $67 billion, making it one of the biggest privately held companies in the world. Earlier this week, the Wall Street Journal reported that proposals from Goldman Sachs (GS) and Morgan Stanley (MS) imply a market value as high as $120 billion. While Uber has battled with heightened competitive pressures, as well as a series of scandals that led to the departure of its co-founder and former Chief Executive Officer (CEO) Travis Kalanick, bulls cite the firm's market leadership in a still burgeoning market and its opportunity to lower costs in the era of autonomous vehicles.
Uber's main rival, Lyft, has also been highlighted as a potential IPO candidate in 2019. On Tuesday, the WSJ reported that Lyft had chosen JPMorgan Chase & Co. (JPM) as the lead underwriter for its IPO. Lyft's valuation is now expected to top the $15.1 billion it warranted earlier this year.
Other companies valued at over $1 billion on the IPO docket include workforce communication platform Slack Technologies, which is expected to garner a valuation of more than $7 billion. Airbnb, a leader in the booming shared economy space and a disrupter in the traditional travel and hotel industries, was also valued at $31 billion this week. Unlike Uber and Lyft, the San Francisco online vacation marketplace is already profitable.
Instacart, a same-day grocery delivery service, announced $600 million in new funding earlier this week and has since fetched a $1.6 billion valuation. CEO Apoorva Mehta suggests that while the firm has not committed to an IPO, a market debut is ultimately on its horizon.