After more than a year of waiting on the sidelines for market conditions to improve, several private companies appear ready to debut as public companies.
Among the most talked about companies that may go public sometime this year are Discord, a voice and video communications service for gamers and other social groups, Reddit, a wide-ranging social media platform, and Klaviyo, which helps companies with their email marketing efforts.
In addition, three other companies featured in a Forge Global article in January – Instacart, Databricks, and Navan, formerly known as TripActions – are also on the short list of companies that could go IPO this year.
Companies that are mulling over going public have no doubt taken note of the successful IPO of restaurant chain Cava Group (ticker: CAVA) last month. To be sure, several IPOs in recent days haven’t fared as well as Cava’s stellar debut. And Techcrunch recently reported that Fidelity Investments cut the value of its holdings in both Reddit and Discord. But there’s no denying that conditions in the public marketplace have improved in recent months. An Ernst & Young report points to six favorable conditions that could help the IPO market this year including a potential slowdown or outright reversal in rising interest rates, a decline in the inflation rate, and, of course, a climb in the stock market following 2022’s bear market. Thus far, those favorable conditions may be falling into place.
Founded in 2015, San Francisco-based Discord bills itself as a voice, video, and text communications service “used by over a hundred million people to hang out and talk with their friends and communities” (Source: Discord’s website). Originally geared to video game enthusiasts, the company’s platforms are now used by dozens of social cohorts including hiking clubs and study groups. Discord’s last-known valuation was $15.2 billion as of an August 2021 funding round.
Discord, which reportedly turned down a $10 billion buyout offer from Microsoft in 2021, hasn’t filed with securities regulators to go public and the company has been mum about the timing of an IPO. But according to Fast Company magazine, Discord has experienced a steady gain in users and even launched tiered subscription plans on its platform, signs that the company could soon be an IPO candidate.
Founded in 2005, San Francisco-based Reddit, whose last known valuation was $10 billion as of August 2021, consists of a vast network of more than 100,000 user communities or “subreddits” geared to hobbies and other interests, including stock investing.
In February, tech news site The Information reported that Reddit is aiming to go public sometime in the second half of this year. And the company has said that on July 1, it will limit free access to the use of its data API, which is how two or more computers communicate with each other, based on usage. According to Barron’s, the “move may be an effort by the firm to improve its financials ahead of a potential initial public offering.”
Finally, Reuters reported in May that Klaviyo, which was founded in 2012, confidentially filed IPO paperwork with U.S. securities regulators. “While terms of the IPO have not yet been set, the Boston-based company is mulling a raise of at least $750 million in the listing,” Reuters added. The company’s last known valuation was $9.5 billion, based on its last financing round in 2021.