But there are reasons to be optimistic, we will get a good harvest of public offers
The IPO market so far 2023 has been a goose egg and we probably won’t get any interesting IPOs for another quarter or two. This is incredibly sad for your friendly, local TechCrunch+ reporting team, who love an S-1 more than anything.
The good news is that once we get the IPO train back on track, we should be able to see a pretty good number of public market debuts.
Let’s talk about why.
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If you dig back through the Silicon Valley Bank analysis, which now feels somewhat different than it did two weeks ago, you can get a pretty good idea why institutions aren’t expecting a flurry of IPOs in the near future. In its State of the Markets report for the first half of 2023, SVB predicted that the market for “US VC-backed technology IPOs is likely to remain dormant in the first half of 2023.”
So far it has been 100% correct.
However, the bank also predicted that as “the market gains clarity on the (rate) cap (and) multiples of forward earnings consistent with long-term averages and pent-up demand from institutional investors” and unicorns, we should expect no fewer than ten IPOs in the back half of the year from venture-backed companies.
When we first read it a while ago, it felt a little optimistic. Why would we go from zero to double digits in such a short time frame?
We have since gained a little more coherence. TechCrunch+ recently spoke with Arjun Kapur, a managing partner and founder at Forecast Labs, about the IPO issue.
(Forecast Labs is a sister entity to Comcast Ventures. The latter is a venture shop that invests in areas of strategic interest to its parent, Comcast NBCUniversal, a conglomerate that spans from Internet access to cable TV to content itself. Forecast, in In contrast in addition, it trades equity for access to TV advertising, essentially offering lower-than-market CPA-based advertising on the tube for equity.It’s a pretty interesting model for companies looking to reach a larger consumer audience, but at a discount).