Morning Report: A three or four year public IPO timeline is silly.
Yesterday TechCrunch reported that Ola, the well-known Indian ridesharing giant and Uber rival, “is planning to go public potentially as soon as in three years time.”
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It’s good news of a sort. A company going public often implies earned financial maturity. At the same time, Ola’s timeline is vacuous.
For a company already worth $7 billion with $3 billion in funding, according to Crunchbase, including SoftBank money, three to four years is an eternity. It’s so far off as to be essentially nonexistent when stacked against the firm’s current business.
The firm’s fundraising picture also casts doubt on the usefulness of such a long IPO timeline. Ola last raised in Q4 2017, picking up $1.1 billion. Given the cost structure of ridesharing companies, that round presumably won’t last the firm three or four years.
In fact, digging into Ola’s history, it won’t last another year. The firm has a history of rapid-fire capital accretion, including one round in 2014, three in 2015, and a half dozen in 2017. In short, the company doesn’t know where it will be at the end of its provided IPO timeline. That makes its IPO timing mostly useless.
It’s good that TechCrunch reported the news,; we’re not trying to ding the media. But that Ola is still so far out from an IPO after having taken on as much external capital since its founding in 2010 is disappointing.
Happily, we are not alone in raising these particular complaints, as noted technology IPO advisor Barrett Daniels recently opined:
Yerp.
From The Crunchbase Daily:
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Investors park $90M in Metromile
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Volta Charging fuels up with $35M
- Volta Charging, a San Francisco-based startup that provides an ad-supported electrical car charging network, has closed on a $35 million Series C funding round.
- Wireless speaker system provider Sonos set a price range of $17 to $19 per share for its upcoming IPO. The offering could bring in up to $300 million.
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