At the end of last year–a record year for the IPO market–Crunchbase News published our top predictions for companies that could go public in 2022.
Spoiler alert: We were wrong.
With the IPO market in general on pause this year, not one of the 30 companies on our list have gone public so far in 2022.
In our defense, the year is only halfway over, meaning there’s still another six months for some of these predictions to come true. At the end of last year, we didn’t foresee this level of inflation, Russia invading Ukraine, or for investors to sour on tech stocks. It happens to the best of us (just ask Jim Cramer).
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Still, I decided to take a look back at the group of companies we thought might IPO this year, and see what’s happened with them instead.
While they span across industries including proptech, fintech and cybersecurity, they all had a few things in common that made us suspect they’d go public: They were all late-stage companies, well-funded and growing fast.
Some, like Instacart, had explicitly indicated they were looking to go public in 2022. With others, we just had a hunch that they’d seek more capital and turn to the public markets while they were still hot.
Of course, at this point we know what’s happened with the public markets this year. According to Josef Schuster, founder of financial services firm IPOX Schuster LLC, it will take a big brand to make the leap and go forward with an IPO to “bring confidence back to the market.”
“What it really takes is a really big winner—a solid debut to open up the IPO window for other companies,” Schuster said.
But which company that might be is anyone’s guess.
Who’s raised money?
Of the 30 companies on our list, 24 raised their most recent round of funding at some point in 2021—and nothing since.Those rounds were usually large ($100 million or more), so most of the companies on the list are pretty well capitalized.
The fact that most of the companies on this list raised their most recent round of funding in 2021 isn’t surprising. Last year was a record year for venture investment, with VCs throwing cash at high-flying startups, often at the growth stage.
It’s also not surprising that the majority of the companies on this list haven’t raised money this year. First, they’re probably well-capitalized as is, and second, venture investment as a whole is down this year. It’s harder to raise money now, and the terms aren’t as favorable for founders, either.
Who’s had layoffs?
At least five of the companies on our potential 2022 IPO list have laid off employees, according to Crunchbase’s Tech Layoffs Tracker. Cybereason, Glossier, Klarna, MasterClass, and Thrasio have all cut staff this year, per reports.
Of the figures we know, it looks like cosmetics startup Glossier made the deepest cuts, laying off about a third of its workforce back in January. Klarna is one of several fintech companies to initiate layoffs this year, and Cybereason is among a handful of cybersecurity companies to cut jobs.
Generally, late-stage companies were hit the hardest when it comes to tech layoffs, according to a Crunchbase News analysis. It makes sense, as they’re the companies who probably accelerated hiring last year and now need to make the necessary cuts to hold them over until the public market conditions improve and they can go out for more capital.
Who’s had leadership changes?
Of the group, there were also some notable leadership changes.
Who could be the first to IPO?
My best guess (which you should take with a grain of salt) is that Instacart will be the first to make the jump and push forward with an IPO.
The company said it intended to go public in 2022, so we know it’s prepared for an IPO. It’s also taken additional steps to prepare for the public market. For example, it lowered its own valuation from around $39 billion to $24 billion to keep more in line with public tech company valuations, and it slowed down its hiring pace.
These all point to the company cleaning up its house to go public whenever the time is right. And if it does, it’s certainly a big brand that could make a splash and open the IPO doors for everyone else.
Illustration: Dom Guzman
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