The 2019 Tech IPO Pipeline by CBInsights

Dec 23, 2018 | Publisher: Techcelerate Ventures | Category: Technology |  | Collection: Investments | Views: 16 | Likes: 1

1 286 of the most promising and highly-valued private tech companies in the United States The 2019 Tech IPO Pipeline 2 W H A T I S C B I N S I G H T S ? CB Insights is a tech market intelligence platform that analyzes millions of data points on venture capital, startups, patents, partnerships and news mentions to help you see tomorrow's opportunities, today. CLICK HERE TO LEARN MORE 3 T R U S T E D B Y T H E W O R L D ' S L E A D I N G C O M P A N I E S "We use CB Insights to find emerging trends and interesting companies that might signal a shift in technology or require us to reallocate resources." Beti Cung, Corporate Strategy, Microsoft 4 #FutureFintech @cbinsight s @cbinsight s June 12 - 13, 2019 New York, NY events.cbinsights.com/future-of-fintech Save with early bird pricing until Dec 31, 2018 5 Contents 6 7 19 29 Welcome remarks Macro trends The 2019 Tech IPO Pipeline Top Tech IPO Pipeline investors 6 Welcome remarks 7 T H A N N U A L T E C H I P O P I P E L I N E R E P O R T This is the 7th annual edition of the CB Insights Tech IPO Pipeline Report. This year's Tech IPO Pipeline features 286 of the most promising and highly valued private venture and private equity-backed technology companies in the United States. Our analysis finds that while tech IPO activity did not see a major spike in 2018, investment to potential candidates continues to grow significantly. Of note, there has been almost six times more $100M+ private financings than IPOs of US venture-backed tech companies this year. The continued frothiness in the private markets has minted more than 40 new US tech unicorns in 2018 YTD. Of the venture-backed US tech companies that went public this year, we find that the median time between their first financing and public offering was 10.1 years. Compare that to 2013, when the median time was just 6.9 years. As always, it is worth remembering that not all (and perhaps few) of these 286 companies will IPO next year. Many have just crossed the $100M valuation threshold. Others continue to tap into creative sources of capital in the private markets. And some will get out-executed and may never see a liquidity event. Still, 2019 is shaping up to be a blockbuster year for tech IPOs. Consider that if Uber, Airbnb, Pinterest, and Slack were to go public at their rumored IPO valuations, they would all rank among the 10 largest venture-backed tech IPOs since 2012. Onward to 2019. 7 First, a look at the market 7 T H A N N U A L T E C H I P O P I P E L I N E R E P O R T 1. Tech IPOs continue to take longer 2. No boom in tech IPOs in 2018 3. Big tech M&A rises, but also replaces some would-be IPOs 4. Mega-round mania in 2018 5. The SoftBank effect 6. Private equity funds get active in late-stage buyouts 8 The median time between first funding and IPO for US VC-backed tech companies that went public in 2013 was 6.9 years 9 The median time between first funding and IPO for US VC-backed tech companies that went public in 2018 YTD was 10.1 years 10 Companies are raising more funding prior to IPO Includes IPOs of US-headquartered VC-backed tech companies on major US exchanges only. M A C R O T R E N D S Median amount of funding raised prior to tech IPOs by year ($M), 2012 2018 YTD (12/14/2018) $64 $98 $101 $92 $137 $185 $239 2012 2013 2014 2015 2016 2017 2018 YTD 11 There has been no upswing in tech IPOs in 2018 Includes IPOs of US-headquartered VC-backed tech companies on major US exchanges only. M A C R O T R E N D S IPOs of VC-backed US tech companies, 2012 2018 YTD (12/14/2018) 30 29 33 16 12 19 19 2012 2013 2014 2015 2016 2017 2018 12 Will 2019 be the blockbuster year for tech IPOs? M A C R O T R E N D S Largest US VC-backed tech IPOs since 2012 vs. potential IPO valuations of Uber, Lyft, Slack, and Pinterest Valuation shown is at time of IPO $120.0B $104.2B $31.0B $24.8B $15.0B $14.2B $12.6B $10.0B $5.4B $4.5B Uber Facebook AirBnB Snap Pinterest Twitter Dropbox Slack Lending Club Zayo Group Holdings Potential 2019 tech IPOs Largest US VC-backed tech IPOs since 2012 13 Both tech and non-tech buyers drive billion-dollar tech M&A in 2018 Excludes billion-dollar VC-backed healthcare M&A M A C R O T R E N D S Tech vs. non-tech buyers of VC-backed US companies for $1B+, 2013 2018 YTD (12/14/2018) Non-techTech2013 2014 2015 2016 2017 2018 YTD 2x 14 Big M&A replaces some would-be tech IPOs M A C R O T R E N D S 15 Mega-rounds triumph over tech IPOs in 2018 M A C R O T R E N D S $100M+ financing rounds to VC-backed tech companies vs. VC-backed tech IPOs, 2012 2018 YTD (12/14/2018) 0 20 40 60 80 100 120 140 2012 2013 2014 2015 2016 2017 2018 $100M+ equity financing rounds to US VC-backed tech companies US VC-backed tech IPOs IPOs include US-headquartered VC-backed tech companies on major US exchanges only 16 New private tech unicorns significantly outpaced tech IPOs in 2018 M A C R O T R E N D S New tech unicorns vs. VC-backed tech IPOs, 2012 2018 YTD (12/14/2018) IPOs include US-headquartered VC-backed tech companies on major US exchanges only 0 5 10 15 20 25 30 35 40 45 50 2012 2013 2014 2015 2016 2017 2018 New VC-backed US tech unicorns US VC-backed tech IPOs 17 SoftBank has led $100M+ financings to 16 US companies totaling over $10.8B in 2018 YTD M A C R O T R E N D S *SoftBank invested $1B in a convertible note to WeWork in August 2018 and a warrant to pay $3B to buy shares before 9/2019 at $110 per share in November 2018. **SoftBank invested $1.25B directly in Uber in January 2018. Uber investors and employees also tendered shares to a SoftBank-led consortium worth $8B. $300M $1B $400M $1.1B $250M $4B* $375M $400M $400M $300M $240M $200M $121M $535M $300M $1.25B** Financing Amount: Firm: 18 Vista Equity leads PE investors getting active in late-stage private tech buyouts M A C R O T R E N D S Another trend in the late- stage startup market is tech- focused PE firms willing to acquire majority stakes in tech companies contemplating an IPO or exit. Remaining to be seen is whether PE firms such as Vista start to cash out investments through stock market flotations rather than sales to other PE firms or larger companies. Vista- backed Ping Identity has reportedly hired banks for a potential IPO. 5 3 6 9 2015 2016 2017 2018 YTD Investments or M&A of private, VC-backed companies by Vista Equity Partners, 2012 2018 YTD (12/14/2018) 19 The 2019 Tech IPO Pipeline 20 Last year's tech IPO predictions how they fared T H E 2 0 1 8 T E C H I P O P I P E L I N E Our 2018 Tech IPO Pipeline identified 355 tech companies that represented the cream of the crop within VC and private equity portfolios. Here are how our predictions did: Secondary transactions not included. 355 tech IPO pipeline companies 57 companies exited via IPO or M&A 16 companies went public 120 raised additional financing in 2018 $24B in financing raised 50% exited or raised financing in 2018 21 In 2018, the 286 Tech IPO Pipeline companies raised: $30.5 billion in equity financing 22 A selection of 2019 Tech IPO Pipeline companies 2 0 1 9 T E C H I P O P I P E L I N E 23 Top 5 IPO prospects Ranked by Mosaic Score Mosaic was built with a grant from the National Science Foundation. Using non-traditional public signals ranging from customer signings to hiring activity to media sentiment to web traffic and mobile app data, Mosaic scores provide a rigorous, data driven way to understand the health and momentum of private companies. To learn more about Mosaic, visit https://www.cbinsights.com/company-mosaic. 2 0 1 9 T E C H I P O P I P E L I N E Company Description Mosaic Momentum Score (max 1,000) Total funding ($) Select investors Web performance and security services 940 $182M Pelion Venture Partners, NEA, Venrock Cloud data management 870 $292M Lightspeed Venture Partners, Greylock Partners, Khosla Ventures Customer experience management software 870 $255M Sequoia Capital Cloud video conferencing 900 $142M Horizons Ventures, Emergence Capital Partners, Sequoia Capital Exercise equipment and media 860 $1B Tiger Global Management, True Ventures, L Catterton We used our proprietary company rating algorithm, Mosaic, to identify a select group of companies that are most likely to go public in 2019. The list is below: 24 2018 was a record fundraising year for Tech IPO Pipeline companies 2 0 1 9 T E C H I P O P I P E L I N E $415 $552 $1,312 $2,202 $3,642 $11,039 $23,052 $19,412 $21,755 $30,571 3 2 2 6 5 4 11 18 28 54 63 114 138 170 214 244 191 205 208 0 50 100 150 200 250 300 $- $200 4 $600 8 $1,000 ,2 $1,400 ,6 $1,800 2,0 $ ,200 2,4 $ ,600 2,8 $3,000 ,2 $3,400 ,6 $3,800 4,0 $ ,200 4,4 $ ,600 4,8 $5,000 ,2 $5,400 ,6 $5,800 6,0 $ ,200 6,4 $ ,600 6,8 $7,000 ,2 $7,400 ,6 $7,800 8,0 $ ,200 8,4 $ ,600 8,8 $9,000 ,2 $9,400 ,6 $9,800 $10,0 ,200 $10,4 ,600 $10,8 1,000 $1 ,2 1,400 $1 ,6 1,800 $12,0 ,200 $12,4 ,600 $12,8 3,000 $1 ,2 3,400 $1 ,6 3,800 $14,0 ,200 $14,4 ,600 $14,8 5,000 $1 ,2 5,400 $1 ,6 5,800 $16,0 ,200 $16,4 ,600 $16,8 7,000 $1 ,2 7,400 $1 ,6 7,800 $18,0 ,200 $18,4 ,600 $18,8 9,000 $1 ,2 9,400 $1 ,6 9,800 $20,0 ,200 $20,4 ,600 $20,8 1,000 $2 ,2 1,400 $2 ,6 1,800 $22,0 ,200 $22,4 ,600 $22,8 3,000 $2 ,2 3,400 $2 ,6 3,800 $24,0 ,200 $24,4 ,600 $24,8 5,000 $2 ,2 5,400 $2 ,6 5,800 $26,0 ,200 $26,4 ,600 $26,8 7,000 $2 ,2 7,400 $2 ,6 7,800 $28,0 ,200 $28,4 ,600 $28,8 9,000 $2 ,2 9,400 $2 ,6 9,800 $30,0 ,200 $30,4 ,600 $30,8 1,000 $3 ,2 1,400 $3 ,6 1,800 $32,0 ,200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $M Bar $M Line 2000 2018 YTD (12/14/2018) 25 Mega-rounds to companies in the Tech IPO Pipeline continue to climb 2 0 1 9 T E C H I P O P I P E L I N E 6 23 50 32 64 97 2013 2014 2015 2016 2017 2018 $100M+ financing rounds to Tech IPO Pipeline companies by year; 2013 2018 YTD (12/14/2018) 26 California-based companies dominate the Tech IPO Pipeline 2 0 1 9 T E C H I P O P I P E L I N E 177 44 19 9 5 5 4 4 3 3 13 27 60% of Tech IPO Pipeline companies first raised between 2010 and 2014 2 0 1 9 T E C H I P O P I P E L I N E 1 7 5 27 23 38 45 44 23 24 15 11 6 3 2 2 2 1 1 4 1 0 0 1 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 28 45 Tech IPO Pipeline companies first became unicorns in 2018 2 0 1 9 T E C H I P O P I P E L I N E 45 18 10 20 12 1 3 2018 2017 2016 2015 2014 2013 2012 29 Top 2019 Tech IPO Pipeline Investors 30 A16Z, KPCB, GV lead Tech IPO Pipeline investors I N V E S T O R T R E N D S Andreessen Horowitz moves up two spots to first on the list of investors with the most investments in Tech IPO Pipeline companies this year. Andreessen Horowitz, Kleiner Perkins, Google Ventures and Sequoia Capital all remained in the top 5, with Accel moving up two spots. Investors who made the ranking after not appearing on the top 20 last year include Y Combinator and Thrive Capital. Investors ranked by highest number of portfolio companies in the 2019 Tech IPO Pipeline 31 A16Z, KPCB, GV lead Tech IPO Pipeline investors I N V E S T O R T R E N D S Andreessen Horowitz, Tiger Global, and Sequoia Capital topped all investors with the highest number of billion-dollar Tech IPO Pipeline companies in their portfolio, each with 20 or more. Sequoia Capital first invested in 45% of its pipeline companies in the billion-dollar club at the seed or Series A stage. The list is rounded out by a mix of venture capital firms such as Founders Fund, NEA, and Spark Capital, and traditionally late- stage investors such as Wellington Management, Fidelity Investment, SoftBank, T. Rowe Price, and Baillie Gifford & Co. Top ranked investors by 2019 Tech IPO Pipeline companies in the unicorn club 32 Top 2019 IPO Pipeline investors By entry stage I N V E S T O R T R E N D S 1. Andreessen Horowitz 2 7 9 10 8 2 Series E+ Series C Series B Series A Seed Growth Equity 2. Kleiner Perkins Caufield & Byers 3 5 9 9 5 5 1 Series E+ Series D Series C Series B Series A Seed Private Equity 2. Google Ventures 5 11 6 9 6 Series D Series C Series B Series A Seed 4. Sequoia Capital 3 4 5 7 12 5 Series E+ Series D Series C Series B Series A Seed 33 Top 2019 IPO Pipeline investors By entry stage I N V E S T O R T R E N D S 4. Accel 6. SV Angel 6. New Enterprise Associates 8. Institutional Venture Partners 2 6 9 14 3 2 Series D Series C Series B Series A Seed Other 1 12 17 Series C Series A Seed 2 1 4 6 11 5 1 Series E+ Series D Series C Series B Series A Seed Other 5 5 7 6 2 2 Series E+ Series D Series C Series B Series A Growth Equity 34 Top 2019 IPO Pipeline investors By entry stage I N V E S T O R T R E N D S 9. Tiger Global Management 10. Goldman Sachs 11. Y Combinator 11. ICONIQ Capital 9 3 3 4 4 2 1 Series E+ Series D Series C Series B Series A Other Growth Equity 7 8 4 3 1 1 Series E+ Series D Series C Series B Series A Growth Equity 1 1 22 Series C Series B Seed 4 11 3 2 1 1 1 Series E+ Series D Series C Series B Private Equity Other Growth Equity 35 Top 2019 IPO Pipeline investors By entry stage I N V E S T O R T R E N D S 13. Lightspeed Venture Partners 14. Founders Fund 14. Battery Ventures 16. Wellington Management 4 7 7 3 1 Series C Series B Series A Seed Private Equity 1 5 7 4 4 Series D Series C Series B Series A Seed 1 3 4 5 5 2 1 Series E+ Series D Series C Series B Series A Seed Growth Equity 8 8 1 2 1 Series E+ Series D Series C Series B Other 36 Top 2019 IPO Pipeline investors By entry stage I N V E S T O R T R E N D S 16. General Catalyst 18. Thrive Capital 18. Khosla Ventures 3 5 7 4 1 Series C Series B Series A Seed Growth Equity 1 6 2 4 6 Series E+ Series C Series B Series A Seed 3 6 5 5 Series C Series B Series A Seed 37 W H E R E I S A L L T H I S D A T A F R OM? The CB Insights platform has the underlying data included in this report CLICK HERE TO SIGN UP FOR FREE 38 cbinsights.com @cbinsights

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