2019 Could Be The Year Of The Decacorn IPO

Airbnb has a new chief financial officer (CFO), giving the company a path to go public next year as expected. The popular unicorn lost its prior CFO in February of this year, the same time that the ten-year-old company said that it wouldn’t go public in 2018.

It’s not the only domestic decacorn (a unicorn at least ten times over) targeting a 2019 debut.

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Airbnb is joined by Uber, Pinterest, and Lyft in having plans to go public next year, putting a huge slice of the startup market on hock in quick succession. Given that Airbnb has put its IPO back into our minds with its CFO hire, let’s take a quick look at what the three firms are worth, and remind ourselves when they are expected to go out.

Uber

Current private valuation: $72 billion, following its most recent $500 million round from Toyota.
Capital raised: $24.2 billion in debt and equity (per Crunchbase).
Target IPO date range: From Q1 2019 (From its CEO’s first IPO range), through the year (per the CEO’s September IPO timing comments.)

Uber’s IPO timing is a mixed bag. The firm’s first estimates of 18 to 36 months put its IPO anywhere from Q1 2019, all the way into 2020. But more recently, Uber has been clear that 2019 is the plan. It’s a huge window, giving Uber plenty of time to get its numbers in line. I’d wager that Uber’s current losses push its IPO into the second half of 2019, but I’m usually wrong.

Uber is the big fish for 2019. If this IPO flops, what else unwinds? (More on Uber’s latest numbers here.)

Current private valuation: $12.35 billion after its last primary round, per Crunchbase.
Capital raised: $1.5 billion in equity.
Target IPO date range: Mid-2019.

Pinterest is a very interesting company. It doesn’t get the same level of attention as Airbnb or Uber or Lyft, but the firm has a sky-high valuation and large revenues. With $473 million in reported revenues in 2017 and lots more expected in the current year, Pinterest will go into its IPO with something close one billion in trailing revenue. If that is enough to match its valuation, we’ll find out.

I can’t wait to dork out about this IPO, frankly. What are its margins? What percent of advertisers stick year to year? What percentage of its revenue will come from advertising, while we are on the topic? And so forth. It’s going to be screaming fun.

Lyft

Current private valuation: $15.1 billion after its last $600 million Series I in June 2018.
Capital raised: $4.9 billion in equity.
Target IPO date range: Early-2019

Lyft’s potential $15 billion IPO valuation gives the company a lot to prove before its public debut. The company reported an H1’18 revenue of $909 million, with a year-over-year growth of 120.6 percent. The company, which is more unprofitable than its main competitor on a percent-of-revenue basis, has likely been focused on expanding that gross margin ahead of its IPO to give investors more confidence in that ambitious valuation.

Will Lyft go out before Uber? If it does, Uber can drop its prices and sabotage Lyft, which won’t be able to match prices without harming profitability, something that public-market investors care about. But if Lyft goes second, it can do the same to Uber. That’s the fear that many have. If it will hold water we’ll find out, as they can’t both go out at the same time. Right?

Airbnb

Current private valuation: $31 billion after closing the second half of its $1 billion Series F in May 2017.
Capital raised: $3.4 billion in debt and equity sales.
Target IPO date range: Possibly as early as mid-2019.

Now with a fresh CFO on board, the company can get its pants on front-forward and get out. Airbnb claimed over $1 billion in revenue in its most recent quarter and reports state that the firm is profitable on an EBITDA basis. (In English that means that the firm still loses money, but likely at a pretty slow clip in cash terms. Its GAAP results will be interesting.)

The companies above are worth about a combined $130 billion at their last private valuation. That figure, today, would rise if they all went public. If that will stay true next year is everyone’s question.

Top Image Credit: Li-Anne Dias.