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Unicorns Are Thawing Out IPO Plans

Illustration of Tophat Man running to the exit with a bag of cash.

After filing to go public, most companies either go through with an offering within a few months or formally withdraw it.

But some do neither. Rather, having mistimed the market or misjudged their own IPO readiness, some companies continue to lie in wait, prepared to restart the process when conditions improve.

This past week, we saw one such example from Turo, the peer-to-peer car rental platform. The San Francisco-based company — which originally filed to go public in January 2022 — submitted an updated registration that included earnings up to the first half of this year.

To date, 14-year-old Turo has submitted six updated filings, posting regular growth in revenue. For the first half of 2023, revenue totaled $408 million — up from $333 million in the same period a year ago — while net loss widened to $23 million.

Could this latest filing signify that Turo is ready to finally take the IPO plunge? Certainly the window has been opening some, led by Arm’s massive offering this week, as well as planned IPOs from Instacart and Klaviyo.

If so, Turo likely won’t be alone. Should the window stay open, we can expect to see many more unicorns resuscitate IPO plans first initiated toward the tail end of the market boom a couple of years ago.

Three of the top candidates are companies that filed confidentially for a public offering but have not yet done so publicly.

Navan: The corporate travel and expense management software provider formerly known as TripActions reportedly submitted a confidential filing for a public offering roughly a year ago. Buzz around a potential IPO has been mounting for some time for the 8-year-old Palo Alto-based company, which has raised about $1 billion in equity funding and $1.2 billion in debt financing to date. While Navan has yet to submit a public filing, there’s good reason to think this could be imminent as the IPO market heats up.

Reddit: The online discussion forum announced in December 2021 that it had confidentially submitted a draft registration statement to the Securities and Exchange Commission for a planned IPO. Since then, market conditions changed for the worse, while Reddit itself faced criticism following a policy change that prompted platform moderators to strike and shutter forums. We still haven’t seen a public filing, but that could be coming as the IPO window opens.

Cohesity: Data management software provider Cohesity reportedly submitted a confidential filing for an initial public offering in December 2021. Now, it looks like the San Jose-based unicorn may be resuscitating those plans. In August, Cohesity announced several new hires, including a new CFO, Eric Brown, who has prior experience heading finance for public companies including Electronic Arts, McAfee and Polycom.

In addition, there are companies that filed to go public in late 2021 or early 2022 but later withdrew their offerings. These include energy-as-a-service provider Redaptive, business software company Justworks, and workflow automation provider Basis Technologies. While none have formally refiled, it is noteworthy that they were ready to go a couple years ago, before conditions turned. We’ll see if any attempt a restart.

For those considering another shot at an IPO, Thursday’s well-received offering from chip designer Arm Holdings offers an encouraging sign. While valuations of growth technology companies have fallen sharply in the past couple years, there’s still plentiful investor appetite for industry leaders with solid financials.

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Illustration: Dom Guzman

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