Venture Capital: Three VC Exits To Look Out For In 2020

January 23, 2020 | News, Venture Capital
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Will 2020 shake off the IPO blues induced by 2019’s triumvirate of Uber-Lyft-WeWork?

OK, we get it. A fundraising valuation has no meaning unless the public markets validate it. Also, growth is great, but profits are better.

No surprises then, that several companies postponed IPOs in the wake of Uber-Lyft-WeWork (and others).

Yet despite the occasional snafu, the IPO market is doing quite well, judging from the Renaissance IPO ETF, currently perched at an all-time high.

Its performance YTD (+8.94%), quarter (+19.25%) and year (+30.45%) is not to be sneezed at. Looking under the hood, a lot of its gains this year are due to a strike back by the 2019 laggards:

2020 YTD:

Uber +26%,

Lyft +12%

Beyond Meat +71%

SmileDirect +45%

“The strong 2020 performance of recent IPOs bodes well for the 2020 crop,” said Kathleen Smith of Renaissance Capital.

We, therefore, look forward to 2020’s crop of promising VC exits via IPOs (or sales).

Here are three:

Airbnb

This is the big one and hotly anticipated. The home-share company was launched in 2008 and has raised a total of $4.4 billion across 15 venture capital funding rounds, according to Crunchbase, giving it a valuation of $35 billion.

Airbnb is well-funded already and doesn’t need the IPO cash to run its operations. However, it is looking for the liquidity of its stock to enable employees to exit their stock options. These will reportedly expire this year.

GitLab

This San Francisco based development coding platform has already gone to town with its IPO date: 18th November 2020, the date of the founder’s grandfather’s 100th birthday.

Sid Sijbrandij founded the firm, which raised $268 million in an E series in September at a valuation of $2.75 billion.

The company is reportedly growing its revenues at 143%. It has no offices, and its official address in San Francisco is a UPS store.

Tanium

In an October 2018 raising of $200 million, this cyber-security company scored a valuation of $6.5 billion. Investors include Baillie Gifford, Wellington Management, TPG Growth, and T.Rowe Price.

During 2018, Tanium scaled the $200 million revenue rate, along with a 150% customer renewal rate. It is also said to be one of the only cybersecurity players that is both profitable and growing fast.

However, co-founder and co-CEO Orion Hindawi is known to be not very partial to IPOs.

Related Story:   Venture Capital: Who Will Dare to IPO After 2019’s List of Stumbles                                                

Image Credit: Flickr

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