2017: A New Year, A New IPO Market
A new year and a new you...
But better yet, a new you who’s ready to invest.
I know there are a few things we’ll be happy to leave behind in 2016, and one of those things includes last year’s very disappointing IPO market.
There was a lot of lingering uncertainties in the market last year. The biggest one was who’d be our next president. Now that we have some idea of what we can expect for the next four years with a Trump presidency, companies are starting to look ahead and plan accordingly.
Asaf Homossany, Nasdaq’s managing director for Europe, Middle East, and Africa, noted that about 120 companies have filed for IPOs with the U.S. Securities and Exchange Commission (SEC), and he’s said, “The pipeline for 2017 is very strong.”
Renaissance Capital’s director of research, Paul Bard, has this to say about the 2017 IPO market:
Stocks are at record highs, volatility is in check, rates are still low, even if they’re moving higher, and most importantly, this year’s IPOs have done well.
Greg Becker, chief executive of Silicon Valley Bank, has predicted that 30 to 45 venture capital–backed tech companies could go public in 2017.
According to Thomson Reuters, only 20 technology companies went public in 2016, the fewest since 2009.
There’s been a lot of speculation about some of the longest-awaited unicorn companies... will they finally take the leap and go public in 2017?
Two of the highest-valued U.S. companies, Uber and Airbnb, are among the list of unicorn companies that could make a public offering this year.
Another long-awaited company that’ll make its market debut in 2017 is the popular messaging app Snapchat, now formally known as Snap Inc.
Snap Inc. made around $300 million in revenue for 2016, and it’s hoping to surpass last year’s revenue to make around $1 billion for 2017. Its proposed valuation is between $20 and $25 billion.
The company continues to make the case to its current and potential investors that it’s not just a messaging app but is working towards becoming bigger — telling investors that the company will be the next Facebook, in hopes of distancing itself from possible comparison with Twitter and its downfall after its highly anticipated IPO in 2013.
Snap Inc. filed its paperwork back in November, and it's picked Morgan Stanley and Goldman Sachs as its bankers.
Be on the lookout for a Snapchat IPO date sometime early in 2017.
Keep These Tech Companies on Your Radar
Along with these unicorn companies, we could really see a strong push from some small- and mid-cap tech companies.
One of those tech companies includes ForeScout Technologies Inc.
ForeScout is a software company based in San Jose, California. Its software allows companies to see every device that’s connected to their networks in real time. This is crucial to any network’s security — ForeScout enables the highest level of security for a company's data.
The company is leaning towards a public offering this year. It’s raised $121 million in eight rounds of funding. Investors who are on board include Accel Partners, Amadeus Capital, Meritech Capital Partners and Pitango Venture Capital.
The company has generated $125 million in revenue for the 2015 fiscal year, and an IPO could bring it a valuation of $1 billion.
Yext, Inc. is another company that could see an IPO in 2017. Yext, headquartered in New York City, allows businesses to have the most updated (and accurate) location-based information online.
This includes things like location and business hours, allowing for these things to be seen across all platforms, whether on an iPhone, Android, or your computer.
We live in a world where we’re constantly relying on our phones to feed us information that’s accurate and up to date. If we want to go to a restaurant, we don’t want to show up at the wrong place or spend too much time walking around trying to locate the place.
Or even worse, we don’t want to show up when the place is closed!
We’re very privilege when it comes to how we get our information. We want it to be easy... to be able to search the place and have the address come up so we can then click a link that'll open up our navigation app, which will then give us the quickest directions to that exact location — it’s too time consuming to open up another app or browser to get the information you’re looking for.
In July 2016, Yext teamed up with Snapchat to enhance its app. Businesses can now easily create Snapchat geofilters to help promote their business.
It's really simple — a business creates a geofilter, and when Snapchat users are in the area of that business, they'll have access to the Snapchat geofilter, all thanks to Yext's location cloud.
Geofilters help bring traffic to businesses. Not only do they give awareness to the business, but they also let a user know the business is nearby.
According to Mary Meeker's annual Internet Trends report, in the U.K., KFC's geofilter was used more than 200,000 times, reaching 9 million people. It drove a 23% lift in visitation within seven days of seeing the geofilter.
Needless to say, this partnership will be huge for both companies involved.
If we can see some of these companies break out on the market early this year and see the success we’re all hoping for, then it’ll kick the door wide open for some other unicorn companies, in addition to some really promising small- and mid-cap companies.
Until next time,