Because of a surge in direct listings and mega-IPOs, together with these led by Robinhood, Coinbase, and Roblox, 2021 has been probably the greatest years within the final decade for buyers searching for to money in on their profitable funding bets.
In response to knowledge from Pitchbook, SoftBank has amassed $37.63 billion in exit stakes from the IPOs of China’s freight platform Full Truck Alliance and ride-hailing app Didi International, in addition to South Korea’s e-commerce firm Coupang. Sequoia, in the meantime, held a mixed $11.19 billion in exit stakes in 2021, together with these within the Chinese language vape-maker RELX Expertise, the Brazilian fintech firm Nubank, and the data-streaming platform Confluent. Different large winners within the IPO market this yr embody NEA (with a $9.32 billion exit stake), Index Ventures ($7.99 billion), Iconiq Capital ($5.56 billion), and Bessemer Enterprise Companions ($4.94 billion).
2021 was simply as bountiful for crossover buyers, who take positions in corporations at numerous pre-IPO phases of the enterprise cycle. Tiger International, for instance, which had investments in six of the 20 largest IPOs backed by enterprise capitalists in 2021, pocketed $11.35 billion from corporations like Roblox, Coinbase, and Nubank, in accordance with PitchBook. (In contrast to conventional VCs, the New York-based different funding agency hardly ever takes board seats at its portfolio corporations, leaving entrepreneurs extra room to behave on their very own will.)
The worldwide IPO exercise within the first three quarters of 2021 has already surpassed the entire of 2020, in accordance with Ernst & Younger. A complete of 1,635 corporations went public from January to September 2021, in contrast with 1,363 in 2020 and 1,146 in 2019. When measured by deal worth, the IPO actions within the first three quarters of 2021 reached $330.7 billion, up from $268 billion for the total yr of 2020 and $208.3 billion in 2019.
Not all mega-IPOs have yielded comfortable returns, in fact. Didi’s share worth, for instance, dropped to $6.49 as of Friday’s closing, lower than half its preliminary public providing worth of $14 per share. The corporate stated earlier this month that it will delist from the New York Inventory Alternate and search an inventory in Hong Kong, after Chinese language regulators introduced crackdowns on web corporations primarily based on knowledge safety issues. In consequence, SoftBank, which has $13.6 billion invested within the Uber-like app, noticed its inventory worth tumble in late November.
“Several other companies that pulled off mega-IPOs, including Robinhood, Coupang and UiPath, have also lost significant value,” in accordance with a PitchBook report. The information supplier discovered that general, VC-backed corporations have underperformed in opposition to the S&P 500 since March, “which roughly coincided with the initial period of rising bond yields and inflation concerns.”
“This lackluster performance has led to a cooling off in the IPO market that has caused some new issuers to delay or downsize their IPO plans,” the report stated. “When all is said and done, 2021 could represent a high point of the IPO market that may not be matched for years to come.”