Turo, a San Francisco car rental startup, has been about to go public since 2021. However, the volatile stock market in early 2022 delayed the list. Since then, the company has been waiting for the right moment.
Last week, Turo pulled out the list completely. “Now is not the right time,” Andre Haddad, the company's CEO, said in a statement.
For months, investors have been eagerly anticipating the first wave of public releases spurred by President Trump's new administration. Since his election victory in November, which ended a turbulent campaign season, Corporate America and Wall Street have marked the beginning of a Prosis, a period of prevention. The stock market was ahead of the expected jackpot contract production.
However, the administration's tariff announcements and changes to the rapid fire regulations have created uncertainty and volatility. The worsening inflation has caused market anxiety. Also, the advent of China's artificial intelligence app DeepSeek last month led investors to question optimistic bets on US technology, leading to dramatic sales between AI-related stocks.
Everything that influenced the initial public offering. “The calendar has become widely open in the last three weeks from fully booked,” said the founder of Equityzen, a website that helps private companies and their employees sell stocks. One Phil Haslett said.
So far, companies outperform last year, up 14% compared to last year, according to Renaissance Capital, which manages IPO-focused Exchange Traded Funds.
However, there are no signs of the wave of IPOs that many people expected. Especially from well-known companies that have been waiting for the last two years to be made public. Cerebras, a cancelled list of AI-chip company Turo, which filed its investment prospectus this fall, has delayed plans for its release.
According to IPO advisors and analysts, it is too early to know whether macroeconomic concerns about inflation, interest rates and geopolitical risks will change plans to other companies. Other listings are expected later this year.
“We need to have a little more time to see where the administration has begun to land on some of these important topics that are driving some of the uncertainty,” he said. said Rachel Gerring, IPO leader at IPOs. Hard. “There's still so much to plan for the IPO.”
Lending startup Klarna and investment and trading provider Etoro have filed confidentially in recent months to list their stocks. However, many of the most valuable private tech companies, including Stripe and Databricks, are planning to continue to remain private for now by raising funds from the private market instead.
Goldman Sachs CEO David Solomon said last month that one of the reasons IPOs were slow to operate is that startups can get the capital they need from private investors. I did. Goldman last year supported Stripe, a startup worth $70 billion.
“That's a company that wasn't a private company today, given the needs of capital, but today we can,” he said at a Cisco-sponsored meeting.
To further ease the pressure on public disclosure, Stripe will allow employees and shareholders to sell some of their shares regularly for the past few years, allowing them to cash out to avoid putting pressure on the company on the list. I did. A transaction known as a bid offer solves the issue of employee stocks expiring and helps workers pay taxes related to the sale.
According to Carta, a site that helps start-ups manage shareholders, the number and size of public offerings increased in 2024. Carta customers made bid offers of 68 to 77 in 2023 in 2024. Last year it raised $3.5 billion, more than double the $1.7 billion raised in 2023.
AI data company Databricks raised $10 billion from investors in December. While some of the money was directed towards operations, Databricks said some of it would also be used to force current and former employees to pay taxes.
Additionally, in December, data company Veeam raised $2 billion in funding sent to existing investors. This year, Plaid hired Goldman Sachs to collect public offers up to $400 million to help shareholders win cash.
Solomon often tells startup founders that there are three reasons to make it public, two of which were settled by the private market, by raising money and having shareholders sell their shares.
He advised founders to be “very careful” public. “It's not fun being a public company,” he said.
The companies that wanted to publish were waiting. Many have postponed plans in early 2022, when interest rates rose and the war in Ukraine rattles markets.
JustWorks, a pay and benefits software provider, has been a few days apart from the public investors who decided to decide on a delay in January 2022. Mike Secler, then chief operating officer, said he wanted to push and list stocks anyway.
However, as 2022 was worn, the market volatility and performance decline of the listed companies proved JustWorks made the right phone call, he said. JustWorks didn't need capital – the bank had $125 million – and it was profitable.
Cesclar, who became CEO in the second half of 2022, said:
JustWorks will eventually abolish its listing plan and will not attempt it again any time soon. “We'll be time for you,” Secler said.
Navan, a travel and expense management software maker, submitted it to be public in 2022 in secret, but later pulled out the plan. The startup recently met investors and said it had done a “non-deal” roadshow in the second half of the year to lay the foundation for listing.
StubHub, a ticketing company that was published in 2022, is also aiming to list its stocks within this year.
The unstable market has pushed bankers to find ways to make money for tech companies that are often not unprofitable, people familiar with the conversation said. Bankers hope that startups generate at least $200 million in annual revenue to appeal to public investors. If the company is small or loses money, investors want to see high revenue growth, people said.
“Bar has come to be the type of company that can be published,” said Amy Butte, Navan's chief financial officer.
Sanjay Dhawan, chief executive of software company Symphonyai, said he told him to achieve revenues of between $200 million and $300 million before the banker made it public. The company surpassed $400 million last year, he said, making profits.
Dhawan added that he was waiting for clarification from the election before he came up with an IPO plan.
“Now everyone knows what economic policy will look like,” he said. “Everyone is starting their plans a little more than a relief,” he added that the volatility from Deepseek was just a short-term response.
At least one high-tech company has recently joined the open market. On Thursday, Sailpoint Technologies, a cybersecurity company backed by private equity firm Thoma Bravo, raised $1.38 billion in a public offering valued at around $12 billion. However, the shares fell 4% below the $23 per share IPO price on the first day of trading.
“It's going to take some brave companies to come out,” Equityen's Haslett said in order for the open market to really move forward.
