Zola Raises $100M More For Wedding Planning

Morning Report: Meet the latest private IPO recipient, Zola.

Another day, another $100 million round. This time it’s Zola’s turn to receive a nine-figure check.

The recently-announced fundraising is not the first time that Zola has raised, of course. The popular wedding planning company’s enormous Series D brings its total capital raised to $140.8 million, according to Crunchbase.

It’s early on a Thursday, so why do we care about this round more than the other capital events, both large and small, that will drop today? Because it highlights an interesting concept that I wanted to discuss.

So, Zola, thanks for the segue!

Recently in Silicon Valley Bank’s Q1 State of the Markets report, rounds that total $100 million and up apiece are demarcated as “private IPOs.” I think we can define the phrase as “a private round of sufficient size that it mimics a traditional IPO transaction while allowing the company in question to avoid the regulatory requirements and disclosures of a public company.” Or something like that.

Per the following chart from the report, check the concept in action with a comparison of private IPOs to actual IPOs among US venture-backed startups:

Per the upper footnote, private IPOs can even be shortened to PIPOs. That’s lovely.

The concept is great for a few reasons. First, it is a reasonable guiding light to understand how many IPOs we might have seen in today’s market if there wasn’t infinite private money available for pre-nicorns and unicorns to raise.

And, second, it helps us understand how much more capital than before that many modern companies need to reach sustainability. (More on that topic this afternoon from Joanna, so hang tight.) Not that spending lots of cheap money while private is necessarily a sin. Some companies that rode the unicorn wave worked out just fine. Dropbox for one. Or Box, for example.

But some companies did not. Snap’s in trouble for having a cost profile that is flat wild. Perhaps it wouldn’t have wound up in its precise position today if it had been unable to raise so much money while private. After all, some unicorns haven’t just raised PIPO money, they’ve raised billions in private transactions before going public (or not). That’s an even more staggering situation.

But, back to Zola with its paltry single $100 million round — good job. You and SoundHound are joining the PIPO club at the same time. Please leave your jackets at coat check.