Mid-Year Report: Who Could Still Go Public In 2023? 

This article is Part Three of our Mid-Year Report on an eventful 2023 in tech, startups and venture capital. Part One took a look at data and trends over the last six months. Part Two shared survey results from our readers about the rest of the year. Coming up, we’ll dive deep into trends and data in AI venture funding and their impact.

What does the IPO market look like in the second half of 2023?

While IPOs came to a screeching halt last year, we’ve seen a few promising public offerings in the first half of 2023. Johnson & Johnson spinoff Kenvue, for instance, was valued at $50 billion after it went public on the New York Stock Exchange earlier this year.

Tons of startups are eager to make their public debuts. Mature startups including Stripe and Shein have reportedly mulled over their IPO strategies. Other startups are starting to run out of cash as venture investors pull back — a phenomenon exacerbated by the collapse of preeminent startup bank Silicon Valley Bank earlier this year.

But IPOs are still few and far between, and those that choose to brave the public markets will have to accept that the sky-high public debuts of 2021 likely won’t happen this year. An unprecedented 414 U.S. startups went public in 2021, per Crunchbase data, but that number decreased to 93 in 2022. As of now, only 29 startups have made their public debut this year.

With all that in mind, we make a few bold predictions about the companies that could make their way to the public markets this year, or when the IPO window reopens.

— Keerthi Vedantam

Enterprise software

• Databricks: The San Francisco-based data and AI company always makes everyone’s IPO list — and there’s a good reason for that. It is one of the most valuable private companies, with a $38 billion valuation after raising a $1.6 billion Series H led by Morgan Stanley’s Counterpoint Global in 2021. The company recently talked about surpassing a milestone of $1 billion in annual revenue and has hinted coyly at a potential IPO in the past. It also just made a huge acquisition, buying OpenAI competitor MosaicML for $1.3 billion. The deal for MosaicML could be another step toward the public market, as Databricks looks to expand its portfolio of offerings and cash in on an exploding AI market. Databricks has significant investors to eventually appease — the company has raised more than $3.5 billion, per Crunchbase — so an exit makes sense. Databricks also has deep technology — it creates tools and products to help companies view both structured and unstructured data in a single location without moving between different systems — and a growing market. It even already has its own venture arm, Databricks Ventures. It seems like its evolution to a public company is nearly complete.
• Icertis: This one may be a bit of a curveball, but just follow along. The Bellevue, Washington-based contract management software developer locked up $150 million in financing in late 2022. The funding was an even split of a revolving credit facility and convertible financing from Silicon Valley Bank (yes, that bank). At the time, Icertis CFO Rajat Bahri said the deal would help “build towards the next exciting chapter in our company’s journey.” Could that be an IPO? Eventually convertible notes need to be converted. An IPO allows that to happen. Also, Icertis’ contract platform helps companies structure their commercial, legal and operational data within contracts, and connect that data to its other internal systems such as human resources and CRM platforms. While not the sexiest of markets, allowing data to flow through different internal systems is a big market. The company also is already big. In March 2021, Icertis announced an $80 million Series F at a valuation of more than $2.8 billion and in early 2022 it was reported the company was worth $5 billion.
• Talkdesk: All the way back in the salad days of 2021, the cloud-based contact center company locked up a $230 million Series D and became a decacorn. The San Francisco-based company also named industry veteran Sydney Carey as its first chief financial officer. Carey joined Talkdesk from Sumo Logic, where she helped lead the company’s initial public offering. While Sumo Logic recently became a private company again, perhaps it’s time Talkdesk goes public. Since it’s private, the company does not release financials, but it’s pretty big from some estimates. The company even has its own investment arm, Talkdesk Ventures. It’s also 12 years old, so maybe the time has come?

— Chris Metinko

Consumer startups

I’m not expecting much of an IPO rebound this year for venture-backed companies that are long on futuristic vision and short on real earnings. Investors continue to shy away from companies that launched SPACs and IPOs a couple years ago, most of which are still way down.

However, there could be room for some growth companies with strong revenue and margins to contemplate, and compelling stories to go public. For the consumer and consumer-facing platform space, some names that come to mind include:

• Navan (formerly TripActions): OK, I cheated here. Navan already submitted a confidential filing for a planned public offering, which is widely expected later this year. The Palo Alto, California-based company, which offers software for corporate travel and expense management, has raised over a billion dollars in equity financing to date. In December, the company secured $400 million in credit facilities from Goldman Sachs Bank USA and Silicon Valley Bank, less than two months after raising a $304 million Series G at a $9.2 billion valuation. Investors wouldn’t be putting all that capital to work if they didn’t see an exit on the horizon.
• Shein: The Chinese fast-fashion giant is another much-talked-about IPO candidate. Shein’s path to a U.S. public listing, however, continues to face hurdles, including objections from lawmakers and a valuation that’s well below peak. Still, even with a cut, Shein was still reportedly valued around $64 billion — enough to generate one of the biggest offerings in a long time.
• Upside Foods and Eat Just/GOOD Meat: By most measures, alternative protein upstarts Upside Foods and Eat Just would not be companies deemed likely to dip a toe in IPO waters. Public companies in the space haven’t done so well, most notably Beyond Meat, which is trading close to all-time lows. But last week we got some game-changing news: Upside, a maker of lab-grown meat, and Eat Just, which makes plant-based egg and owns cultivated meat company GOOD Meat, received approval from the U.S. Department of Agriculture to start producing their cell-based proteins. It’s the first such approval from U.S. regulators and could spark investor interest in seeing a public listing for these two early innovators. Plus, to deliver on their vision, they’ll need money to scale, something public investors could potentially provide in abundance.

— Joanna Glasner

Fintech

• Stripe: Stripe has been waiting in the wings for an IPO for a while and, as one of the most valuable private companies in the world, is also one of the most obvious predictions on this list. The company filed to go public in 2021, but missed the IPO window when it slammed shut in 2022. The 13-year-old payments provider then pivoted to raise a massive $6.5 billion in a single funding round in March 2023 to cover an upcoming employee tax bill on registered stock units due starting in 2024. It also took a deep step down in valuation to $50 billion — a 47% discount from its most recent funding round two years ago, a deal that valued the company at the time at $95 billion. Prior to its latest funding, Stripe had raised $2.2 billion. The company announced more recently that it has processed $817 billion in transactions in 2022 — up 26% from the previous year. The company reportedly generated $14.3 billion in revenue in 2022. Stripe also laid off 14% of its staff in November 2022, saying “we were much too optimistic about the internet economy’s near-term growth in 2022 and 2023.” Stripe is a well-branded industry leader whose stated mission is to increase the GDP of the internet. If the company steps out, it would be a strong signal that the IPO markets are not frozen.
• Klarna: Swedish buy now, pay later provider Klarna has been around for 18 years, so it’s not exactly been in a rush to go public. But the company aims to be profitable in 2023, which would make it a good IPO candidate. And like every other venture-backed startup, it has investors waiting to get their returns. Klarna raised $800 million at a much reduced valuation of $6.7 billion in 2022. Just a year earlier, it had been valued at $44.5 billion in a funding led by SoftBank Vision Fund. Klarna’s revenue in 2022 was reported to be $1.8 billion. Some rivals have already beat it to the public markets — Affirm, a U.S. competitor founded years later in 2012, went public in January 2021 and is currently valued at $4.4 billion. Klarna took steps to cut its losses in half in the first quarter of 2023 compared to a year ago while still growing revenue. And it has said it’s targeting profitability in 2023, another strong hint that an IPO is likely a consideration.

— Gené Teare

Health tech and biotech

• Included Health: Included Health was ramping up for an IPO back in 2022, when we could be optimistic about those things. The company, which has raised $344 million, per Crunchbase data, previously hired bankers to help with the process. But, it met the same fate as other companies who thought their 2021 luck would head into the new year, and halted its plans. Included works with companies paying for their own health care services and was part of the growing employee benefits category. While it may have held off on going public, it is more than ready to enter the market.
• Lyra Health: I’m still confident a teletherapy or telehealth company will go public sometime this year, if only because adoption of virtual care is still on the rise and some of these companies have already raised their Series F. Lyra was one of the first of its kind — established in 2016, it operates on a direct-to-employer model and has worked with companies like Palantir, Zoom and Amgen to provide teletherapy services. The company has raised $910 million, per Crunchbase data, including a $235 million Series G round back in 2022, upping its valuation to $5.58 billion.
• ElevateBio: Why isn’t ElevateBio just a full-fledged big pharma company? The company raised $401 million in Series D funding back in May, and is currently creating the Microsoft 365 of drug development. By that I mean ElevateBio’s enclosed ecosystem of drug discovery, development and manufacturing technologies is all-encompassing. That same ecosystem makes it a favorite among biotech investors and companies vying to partner with Elevate. Biotech IPOs are expected to make a far faster recovery than other tech industries, thanks to strong clinical data exhibited by startups.

— Keerthi Vedantam

Illustration: Dom Guzman

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