For Sale: One Unicorn, Barely Used

With Dropbox’s successful trading debut likely spurring more technology companies to come public, we reviewed the performance of other IPOs of US tech unicorns over the past year. So far, Dropbox is up 42.4% from its IPO price of $21. Based on last year’s performance of enterprise tech IPOs, we are not surprised as this group was the big winner in 2017. Consider these five:

  • Okta: single-sign on and identity management company
    Valuation: $1.5 billion (IPO) vs. $1.2 billion (prior round)
    IPO price and debut: $17, April 7th, 2017
    Return after the first month: +39.6%
    Return from IPO price thru today: +126.2%
  • MuleSoft: enterprise-software developer
    Valuation: $2.9 billion (IPO) vs. $1.5 billion (prior round)
    IPO price and debut: $17, March 17th, 2017
    Return after the first month: +33.1%
    Return from IPO price thru today: +157.6%
    *Salesforce announced recently it would buy the company for $6.5 billion, its largest acquisition on record.
  • Appian: provider of low-code and BPM software solutions
    Valuation: $880 million (IPO) vs. $1 billion (prior round)
    IPO price and debut: $12, May 25th, 2017
    Return after the first month: +52.1%
    Return from IPO price thru today: +117.3%
  • Cloudera: platform for machine learning and analytics optimized for the cloud Valuation: $1.9 billion (IPO) vs. $4.1 billion (prior round)
    IPO price and debut: $15, April 28th, 2017
    Return after the first month: +43.4%
    Return from IPO price thru today: +41.7%
  • MongoDB: NoSQL database company
    Valuation: $1.2 billion (IPO) vs. $1.6 billion (prior round)
    IPO price and debut: $24, October 19th, 2017
    Return after the first month: +21.9%
    Return from IPO price thru today: +74.8%

Although some enterprise Tech IPOs received lower valuations than their last private round, most have produced large double digit returns since. Consumer companies that went public, however, mostly struggled:

  • Blue Apron suffered the most, especially in the wake of the Amazon/Whole Foods deal and more competition for meal kit delivery services.
    Valuation: $1.9 billion (IPO) vs. $2.1 billion (prior round)
    IPO price and debut: $10, June 29th, 2017
    Return after the first month: -33.9%
    Return from IPO price thru today: -80.1%
  • Social media app Snap has also had trouble for a host of reasons, most recently a largely panned redesign, raft of celebrities dropping the service, and a recent controversial ad.
    Valuation: $24 billion (IPO) vs. $18 billion (prior round)
    IPO price and debut: $17, March 2nd, 2017
    Return after the first month: +31.5%
    Return from IPO price thru today: -4.7%
  • Stitch Fix – an online personal stylist – got a decent start, but has not done much since performance-wise.
    Valuation: $1.4 billion (IPO) vs. $300 million (prior round)
    IPO price and debut: $15, November 17th, 2017
    Return after the first month: +59%
    Return from IPO price thru today: +39.9%
  • Streaming player Roku is a notable exception, despite competition with Amazon’s Fire TV, Apple TV and Google’s Chromecast.
    Valuation: $1.3 billion (IPO) vs. $1 billion (prior round)
    IPO price and debut: $14, September 28th, 2017
    Return after the first month: +39.3%
    Return from IPO price thru today: +135.7%

So what’s on the docket this year? The positive performance of enterprise companies last year and Dropbox most recently could bode well for more potential IPOs in the space. Some include, Slack (cloud-based workplace collaboration app), DocuSign (digital signature company), Zuora (cloud subscription management platform), Pivotal Software (spinoff of EMC and VMware), and Smartsheet (enterprise software for communication and collaboration). The latter four have already filed to go public.

Consumer tech may be another story. Spotify will complete its direct listing next week, which could be a test after last year. Baidu’s streaming unit iQiyi – otherwise known as “The Netflix of China” – is also expected to list its shares on the Nasdaq this week. Other potential possibilities if not this year, perhaps next include: sharing economy startups (Airbnb, Uber, Lyft and Didi), Chinese smartphone maker Xiaomi, and social network Pinterest.

Bottom line, even if you’re not interested in Spotify next week, it along with Dropbox are setting the tone for the IPO market for the rest of this year.