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Morning Report: In the Wake of Warming IPO Prospects, Market Tumbles

Morning Report: The markets are falling today, potentially showing more volatility than we have seen all year. It’s going to worry some folks in tech.

Domestic markets are down today, with the tech-heavy Nasdaq index showing the steepest decline. In picture-format, the carnage is apparent (Google Finance):

Key public tech companies are predictably struggling: Twitter is off more than 3 percent, Snap gave more ground today, Box is off 2.5 percent, and each of the Big 5 (Apple, Amazon, Alphabet, Microsoft, and Facebook) are off at least a fraction.

We mark this moment for two reasons:

  1. Early-morning Twitter commentary is negative, showing that, among market-heads, there are worries “the good times are over.” We’ll see.
  2. The Nasdaq is still over 5,800. That’s a full 16 percent over the historically important 5,000 benchmark.

So public markets remain richly valued, today aside or not. A day’s losses should not bend the IPO climate. But, a correction from all-time-highs could slow momentum, ding valuations, and force some companies to incubate a bit longer before shedding their private label.

The irony of today is that, of course, things were just heating up again.

Today in the Crunchbase Daily:

Rocket Lab raises $75M, valued over $1B

  • Rocket Lab, a developer of small satellite launch vehicles, announced that it has closed a $75 million Series D round at a valuation of more than $1 billion. Data Collective led the round, with participation from Promus Ventures and existing backers.

Walmart creates startup incubator

  • Walmart announced that it is launching a startup incubator in Silicon Valley that will focus on technologies reshaping the retail experience, including virtual reality, autonomous vehicles and personalized shopping. The incubator, called Store No. 8, will work on building startups as well as partnering with promising young companies.

MuleSoft IPO bodes well for enterprise software startups

  • When MuleSoft went public last week, it wasn’t just the company’s backers who celebrated as its market cap soared to nearly $4 billion. The enterprise software company’s valuation helps set benchmarks for similar companies. That means its successful debut will likely help other enterprise-facing startups raise private capital or go public at favorable terms, Crunchbase reports.
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