The year 2014 was the biggest for initial public offerings since 2000. And expectations are that the pace for these exits will continue well into 2015.
As the latest economic report shows, we're most definitely in a recovery, with third-quarter growth notching a vibrant 5 percent. While a number of factors, like cheap oil and increased spending on health care, are key reasons for growth, so are the gains made by fast-growing small companies, particularly in the tech sector.
And just as they did last year, tech companies are expected to lead the way, according to IPO research firm CB Insights. Nearly 600 technology companies, with a minimum value of $100 million, are priming the pumps.
Collectively, they've raised more than $64 billion in financing. Twenty-one of these companies have pre-IPO valuations of $1 billion or more, following 2014 financing rounds from venture capitalists, hedge funds, and institutional investors.
A number of the companies expected to go public next year were widely expected to pull the trigger in 2014, but a sag in tech stocks this spring led them to rethink their plans. These include cloud storage companies Dropbox and Box, streaming music company Spotify, and online registrar GoDaddy.
Here's a look at some of the expected IPOs for 2015.
Poster child of the sharing economy and Inc.'s 2014 Company of the Year, Airbnb is likely to test the public market waters this year, after achieving a valuation of $10 billion. The company allows apartment and home owners to rent out their places for a nightly fee, just like a hotel. In 2014 it took in $500 million in funding, bringing its total funding to nearly $1 billion.
Box founder Aaron Levie was Inc.'s Entrepreneur of the Year for 2013. Apart from that, Box has helped define the cloud storage space and is launching an initiative to offer services that will help specific industries get more productive. Box filed its papers for a public offering with the Securities and Exchange Commission this spring, in which it sought $250 million, but halted its plans following a slowdown in the tech market. Expectations are riding high for 2015.
With 300 million users, Dropbox is to the consumer space what Box is to business. Dropbox was widely expected to follow Box in 2014, filing IPO papers. It didn't, however, but many postulate it will in the coming year. It biggest challenge, however, has been in getting consumers to upgrade from its free storage service to its more extensive paid storage services, where it competes directly with Box.
The online domain registrar, which keeps track of 14 million websites, is valued today at about $4.5 billion. It filed its IPO papers in June, but hasn't given a firm date for when it will go public. It's not the first time GoDaddy has tried. It walked away from an IPO in 2006, citing unfriendly market conditions. GoDaddy has been on the Inc. 5000 every year since 2004.
Founded by Peter Thiel and other Silicon Valley heavies, the software firm specializing in security applications, such as tracing ponzi schemes and covert terrorist activity, has grown like gangbusters with revenues estimated at $500 million. Palantir has raised about $1 billion in funding and is currently valued at $9 billion.
Pinterest, which focuses on digital images that users assemble on a virtual pinboard, could join Facebook and Twitter at the public troughs in the coming year. Currently the third-largest social media site, with an estimated 70 million users, Pinterest also has an estimated value of $5 billion. It has raised three quarters of a billion dollars in venture capital funding since 2010.
Snapchat, a smartphone app that lets users send instant messages that vanish after reading--somewhat presciently, it now seems--swatted away an acquisition attempt by Facebook in 2013 that valued the company at $3 billion. This year it has engaged with Chinese e-commerce company Alibaba and Yahoo for funding that values it closer to $10 billion. It recently hired Credit Suisse banker Imran Khan, who led the Alibaba IPO, as chief strategy officer.
Despite its quarrels with performers, like Taylor Swift, who have yanked their content from the streaming music site, and questions about its ability to attain profitability with so many non-paying users, Spotify could very likely have one of the biggest IPOs next year. The fast-growing streaming music site, founded by Swedish entrepreneur Daniel Ek, reportedly gets a decent chunk of its revenues from subscriptions, not advertising. It has a valuation of $4 billion, and has raised $250 million in venture funds.
Founder and chief executive Jack Dorsey says Square won't go public, but other observers bet the maker of a payment-accepting dongle that attaches to smartphones and allows small merchants to affordably take credit cards, will. That's despite mounting competition from Intuit, Amazon, and others that want in on its lucrative payments territory.
Payments innovator Stripe was founded by Irish wunder entrepreneurs John and Patrick Collison. The young duo's technology, which allows Web-based small-business owners to accept credit card payments in a matter of hours simply by embedding a few lines of code, is giving Paypal and other innovative payments companies a run for their money. Stripe has roped in $200 million of venture capital since its founding in 2009, and is currently valued at $3.5 billion.
The most maligned startup in the world, due to flak from an executive's inappropriate comments about women journalists and its questionable oversight of drivers, is also the most highly valued startup ever. After bringing in $1 billion in venture capital this summer, Uber was valued at $41 billion. An IPO is highly likely in 2015 for Uber, and it could be a really big one, despite all the ruckus.
Vice started out as magazine in 1994 and has since successfully transitioned to the world of online journalism, but it also counts a film production unit among its holdings. It is best known for its fresh and often irreverent take on art, culture, and politics. Fresh off rounds of $500 million in venture capital, chief executive and co-founder Shane Smith has reportedly said Vice will either go on an acquisition spree or go public in 2015.