September 20, 2019 Technology
Companies are increasingly staying private for longer, raising ever larger amounts from private equity and venture capital. SoftBank Technology Corp.’s Vision Fund took the lead in an $8 billion backing of Uber in January 2018, a little more than a year before the company’s IPO, valuing the business at $48 billion. SoftBank still is looking for more investors for its Vision Fund.
There’s been so much money thrown at technology companies in particular, it’s a wonder that any of them need public money. CB Insights’ 2018 report on 355 highly valued tech companies found that the group had raised more than $104 billion across more than 1,900 deals since 2000. Thirty-two of them had entered the $1 billion club since 2015, making them officially unicorn creatures with near-mythical status. But they do need to go public, of course. Lots of investors, including private equity, are looking to cash out and make a return. They just seem to be more patient than usual, with some waiting for longer than average to cash out. So a long list of companies finally put themselves up for public sale this year: Uber, Pinterest and Lyft, to name a few. Of course, all this attention to the IPO market belies the fact that there are substantial numbers of companies going private too, through mergers and acquisitions. Last year, global going-private M&A reached a record $154.3 billion in volume with 164 deals, according to Dealogic.