So the IPO market sort of, kind of, reopened a bit in 2023 — after being closed for 2 years for the most part. Kalviyo, Instacart, and ARM all 3 great leaders, IPO’d in a short window, unfortunately, to a bit of a quiet thud. None really traded up, and for the most part, I think folks view their IPOs as a test around a brief market up-tick that didn’t taken.
No on else really followed them in tech, and in the end, 2023 will still end with an IPO Whimper, low public multiples, and limited liquidity for Unicorns.
Having said that … it looks like 2 Really, Really Good Ones Are IPO’d in 2024
First Up is Canva, At Almost $2 Billion (!) in ARR
I have no inside information, but the word around is that Canva is planning to IPO in 2024 at a stunning $2B+ ARR by that time, growing a stunning 50% (!), cash flow-positive.
That’s about as good as it gets.
Next up is Databricks, Also Growing ~50% at Almost $2 Billion in ARR (!)
Databricks unlike Canva isn’t cash-flow positive, so there will be more questions at IPO, but I’ve heard from several it’s an internal go to try to IPO at least in 2024. By then, they’ll be well past $2 Billion in ARR with top decile growth.
More on Databricks numbers here:
5 Interesting Learnings from Databricks at $1.5 Billion in ARR
With its closest comp, Snowflake, on fire even today and trading at 16x ARR — it should be a strong IPO. (And yes, I know we can argue Databricks is neither really Cloud nor really SaaS. But for purposes of IPOs, tech multiples, etc. I’d argue that doesn’t much matter — its comparables are the Cloud and SaaS leaders).
This week in enterprise software: Top 10 #SaaS #Cloud multiples as of today's market close pic.twitter.com/0CobOymWxE
— Jamin Ball (@jaminball) November 17, 2023
That 2 SaaS / Cloud Leaders Ready to IPO in 2024 at $2 Billion+ ARR, Growing 50% or More. And Both, Importantly, With Strong Brand Names (Even in Consumer, With Canva).
If both trade at say 15x ARR, even in a 6x world, that would put both at $30B+ market caps. Now, maybe they both wait for 2025. We’ll see. But both look strong enough to go in 2024.
That will get folks excited again.
(Canva image from here)
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Jason Lemkin, Khareem Sudlow
