The past year saw the beginning of a turnaround in an uncertain IPO market. And next year, some market watchers expect that the environment for startups going public could get even better.
Companies that have signaled a desire to go public in 2024 include Reddit, Circle Internet Financial, Rubrik and Sweden’s Klarna. Moreover, fintech firm Figure Technologies is planning to spin off its lending arm in an IPO.
Indeed, there’s much for investors in companies mulling IPOs to be heartened by, including a surging U.S. stock market, persistent economic growth that has defied the skeptics and signs that the Fed may have ended its interest-rate hike campaign.
In a recent podcast, Ashok Varadhan, a co-head of Goldman Sachs’ global banking and markets unit, said that the IPO market will be buoyed by a return “to the pre-pandemic normal” after the unstable conditions caused by Covid-19 and governments’ response to it.
A new set of companies have indicated through well-placed sources and company statements that they are taking steps toward going public.
Bloomberg reported in the final quarter of 2023 that the social-media company was holding conversations with potential investors for an IPO timed for next year, “according to people familiar with the matter,” and was mulling a valuation of roughly $15 billion. Reddit’s last known valuation, as of August 2021, was $10 billion.
Founded in 2005, San Francisco-based Reddit is a social network of more than 100,000 communities that allows users to explore many hobbies and other interests, including investing in meme stocks.
Circle Internet Financial
In November, Bloomberg reported that Circle, according to well-placed sources, is talking to advisers about staging an IPO, though “there’s no certainty that Circle will decide to proceed with a listing, the people said.” The company’s last known valuation, as of May 2022, was $8.05 billion.
Founded in 2013, Boston-based Circle is a fintech company that allows its business customers to use the power of cryptocurrencies and the blockchain to commercial transactions globally.
In September, Bloomberg reported that cybersecurity firm Rubrik is seeking to raise between $500 million and $700 million in a public offering, according to sources who added that the amount to be raised could change depending on market conditions.
Founded in 2014, Palo Alto, Calif.-based Rubrik provides software for corporate clients that focuses on data protection.The company’s last known valuation, as of August 2021, was $4 billion. And that valuation was assigned after Microsoft made an investment in the company that was reported in “the low tens of millions” of dollars.
Figure Technologies’ lending Arm
In late 2023, Bloomberg reported the fintech firm Figure Technologies is setting the stage for spinning out its lending unit, Lendco, as an IPO with a valuation of between $2 billion to $3 billion. The company, however, plans to keep the rest of its business private –at least for now. According to Bloomberg, “no final decision has been made” about Lendco’s IPO and “the timing and valuation of the IPO could change.”
Founded in 2018 by serial tech entrepreneur Mike Cagney, San Francisco-based Figure specializes in mortgage financing and bridge loans. Its last known valuation, as of May 2021, was $3.3 billion.
In October, TechCrunch reported that Klarna, the Stockholm, Sweden-based fintech firm, confirmed that it was taking steps toward an IPO. The company is reportedly in the process of setting up a holding company in the United Kingdom as a step toward a public debut, though no decision has been made about which stock exchange it would use to launch an IPO.
According to TechCrunch, the company, which was founded in 2005, recently reported a third quarter operating profit compared with an operating loss from a year earlier. The company’s last known valuation, as of July 2022, was $6.7 billion.