Liquidity Venture

Good Times And No IPOs

Morning Markets: Despite a comeback in stocks, tech’s first quarter IPO haul is looking tiny.

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If Lyft doesn’t make it out in the first quarter, the technology industry’s IPO cadence in the first three months of the year will wind up terribly small and underwhelming. Yes, there are some fair reasons for the result, but it’s still a let-down of a start for a year that was supposed to bring a wave a new technology debuts.

Tell Me Why

Offerings are slim. We have very little on our 2019 IPO tracking post, and what’s there isn’t the sort of brand-name debut that drives excitement. This year is supposed to be the annum during which a host of famous unicorns and decacorns, like Uber and Slack and Pinterest, find their way out of the private markets and into the public.

A good question then is why. Why have IPOs been so lackluster thus far this year? A few reasons. The government shutdown did cause chaos. That slowed things down. And, trade worries and political upheaval at home and abroad led to jitters and the like. IPOs don’t like jitters and the like. But it’s not like the bottom fell out of anything (aside from a functioning Securities and Exchange Commission, for a while), and yet still effectively no one made it out.

So let’s not be too generous and let the now-reversed government shutdown answer for all the disappointment. After all, there was much that was good in the quarter for potential offerings: The public markets were strong, for example. Writing to you today in the last weeks of March, the Nasdaq is back over 7,600, the Bessemer Cloud Index is trading near record-levels, and valuation multiples look healthy.

That’s the sort of pool you want to jump into if you are a budding technology giant, looking to get your investors and founders and employees liquid through a public offering. (There’s no guarantee that the markets will remain as accommodating in the coming quarters, so you often want to get out while the getting is good.)

We’ll see what happens during the last two weeks of March, but as it stands, we’ere one quarter down and still sitting near zero on the technology IPO count.

Illustration: Li-Anne Dias.