After a few years in which late-stage startups on the road to going public piled up like cars on Silicon Valley's Highway 101 at rush hour, 2017 was the year the IPO pipeline started flowing again. In 2018, the flow may become a gush.
The past 12 months have been a solid but not spectacular year for startup IPOs. Consumer companies like Snap, Blue Apron, and even Stitch Fix have yet to enchant investors -- Roku is a notable exception -- but enterprise businesses like Okta, Redfin, and Appian are chugging along nicely.
For venture-backed tech companies, the question of pursuing an "exit" is ever present. As the start of 2018 looms, investors by and large see the conditions for a surge of startups to take the public-market plunge.
Venture capitalist Fred Wilson predicted in October that "2018 and 2019 will be bumper years for tech IPOs, assuming the markets behave." Wilson is a partner at Union Square Ventures, which has IPO prospects like Cloudflare and Stripe in its portfolio. He added, "We have a pipeline of strong mature (and increasingly profitable) companies in our portfolio that will head to the public markets in 2018 and 2019."
Nasdaq Stock Exchange president Nelson Griggs expressed the same sentiment to Reuters, citing the ongoing bull market and low interest rates as reasons for high-growth companies to get in on the action.
An Ernst & Young report noted, "With China and the U.S. remaining positive, all the major engines of growth in the global economy are now synchronized in an upward trajectory for the first time since the end of the global financial crisis." In the American market specifically, "[a] healthy pipeline continues to build," according to EY partner Jackie Kelley, "led by health care and technology companies."
As for the companies that might be on the docket, it's a lot of the same names that came up in predictions for 2017, which tells you a little bit about what kind of year 2017 was. As ever, the consumer-facing possibilities are more tantalizing than the enterprise ones -- often they're also more of a gamble in terms of long-term financial viability. Spotify, for example, loses a lot of money, and may find itself facing up against larger Chinese rival Tencent Music.
A handful of the other startups that are frequently mentioned: Airbnb, Slack, Dropbox, WeWork, Zuora, SpaceX, and potentially even Coinbase. DocuSign has publicly declared its intent to IPO in early 2018. Tech-enabled media empires BuzzFeed and Vice are both expected to brave the public markets.
More tentative possibilities are Pinterest, Uber, and Lyft. But really, all of these expectations are tentative -- even a company a day away from ringing the NYSE bell can reverse its fate.