Launchbay Capital’s Post

Databricks feels the pressure to go public to create liquidity for investors, but it is not committing to any particular timetable for its highly anticipated offering, cofounder and CEO Ali Ghodsi said. Ghodsi could not be drawn on whether Databricks would launch an IPO later this year, or in 2025, if stock market conditions are favorable. One investment banker familiar with Databricks’ strategy estimated its IPO could come in the second half of 2025 or in early 2026. A second banker though thought a listing may occur earlier: https://lnkd.in/eUzupMVp

a growing number of stock tenders. By the numbers: Tender activity climbed 44% year-over-year in Q3 2024, according to new data from Carta, which is one of the largest startup equity and VC fund administrators. There were 26 such offers via Carta last quarter, the highest quarterly total in over two years. Zoom in: Earlier-stage companies are getting in on the act, representing about half the recent volume. That's quite different from 2021, for example, when over 80% of the offering came from companies that were Series C or later. Coming attractions: The new Carta data doesn't include the massive $1.5 billion tender that OpenAI just signed with SoftBank, which applies to current and former employees so long as they have at least two years of tenure. Nor the one announced today by Veeam. Nor the one that Databricks is said to be prepping. The big picture: This feels like venture capital exacerbating its own problem. Yes, some of these tenders help early investors get liquidity, but the real upshot is to let IPO-skittish founders stay private longer. Carta, however, views it a bit differently, pointing out that there is historical correlation between tenders and IPOs, suggesting that an IPO boom could be a year or two away. On the other hand, that history dates back to just after the Great Financial Crisis.

Pre-IPO Stock Market Update | as of Sep 27, 2024 • Page 2: AG Dillon Pre-IPO Stock Venture Capital Fund closing to new investors on Oct 1, 2024 • Page 3-5: LAST CALL for AG Dillon Top 10 Index Fund, OpenAI, xAI, Groq, Hugging Face, and Databricks Pre-IPO Stock Funds, wires due on Oct 15; Anthropic targets $30-40B; Wiz share sale at $15-20B; Revolut hits $45B; Chime preps 2025 IPO; Scale AI hits $400M H1 2024; OpenAI valued at $156.5B; Google expands Gemini; Rippling launches AI Talent Signal at $15.9B; Anduril Industries secures $17.4B defense deals; Klarna expands BNPL with Adyen • Page 6: This Week in Pre-IPO Stocks Podcast • Page 7: AG Dillon Pre-IPO Stock Vintage Index update • Page 8: Current pre-IPO stock secondary market implied valuations • Page 9-10: Pre-IPO Stock revenue multiples • Page 11: Pre-IPO stock secondary market performance

Who says you need an IPO to get rich on all those stock options in your SaaS unicorn?! Not the WSJ apparently! They have a story out today about private secondary sales for unicorns. But beware the overhype! First, let’s explain what’s been going on… In these transactions, new investors acquire shares from employees (or ex-employees), early investors, etc. According to the article it’s been a gold rush for folks. And to be sure there’s absolutely more activity on this front recently! The article cites ~100 such transactions this year on Nasdaq Private Market — one of the main facilitators — up considerably. And of course we’re all reading about some of the most awe-inspiring — from highly successful companies like Stripe, OpenAI and Databricks. Not to mention a host of companies most haven’t heard of — like Tricentis and Veeam Software just announced in the past two weeks. Meanwhile, as we all know too well, traditional IPO volume is down considerably — from $150B in 2021 to just $31B so far this year. But alas, like many puff pieces about the super star companies — for the average unicorn, IMHO these stories are “wishful thinking”. There are some 1,200+ unicorns out there. Many priced their last deals — and their stock options — during the heady days of ZIRP. And for most of those — the options are underwater. Likely permanently. That means they won’t be doing these glitzy secondary transactions any time soon. Or if they do, they won’t be glitzy and the only ones getting liquidity will be the investors with preferred stock. Not the current or ex- employees! I don’t enjoy raining on anybody’s parade here… But false hope is not healthy.

Here’s why Databricks is putting an IPO on hold— even though they’re ready. Wall Street has been expecting a Databricks IPO for a while now. And just when the markets seem right, they’re taking a different approach. Databricks is already operating as a public company, doing its audits and financials as a public company would. So why aren’t they going public yet? They’re choosing to act as a public firm by self-reporting business performance, as it waits for the right moment to commit to an IPO. This is what IPO readiness looks like. This is what preparing for an IPO well before you plan to IPO looks like. Databricks can choose their preferred market conditions. There is no rush or panic. This is why I will continue to talk about the immense value in not simply going public- but in IPO preparedness. Doing this teaches you the value of operating as a public entity before going public. That’s exactly why CEO Ali Ghodi says, “It feels like having your cake and eating it, too.”

Good to see another successful IPO! "Ibotta's successful debut marks the third major tech IPO in the United States this year, and is the third in a row to price well and immediately trade higher. It is also the first half of a pair of technology offerings that will list this month, with data management and security company Rubrik expected to list its own shares next week." #ipo #goingpublic #listing #technology #techindustry #techstock

Databricks closes in on multibillion funding round at $55 billion valuation to help employees cash out. These transactions serve as a bridge to future #IPOs or acquisitions, enhancing morale, retention, and overall value for all stakeholders. ➡️ https://lnkd.in/dTWRh_tE In our coverage world, the rise of direct #secondarie is truly one of the most effective tools in today’s #venture capital landscape, providing much-needed #liquidity for #stakeholders in #growth-stage #companies. These transactions allow early #investors and employees to realize partial liquidity without requiring an IPO or acquisition. SpaceX is a prime example, launching a #tender offer in December 2024 to sell existing shares at $135 each, valuing the company at over $250 billion. Similarly, Stripe conducted a secondary sale in January 2024 at a $53.65 billion #valuation, enabling early investors and employees to cash out. Direct secondaries also extend operational runways for startups without raising new capital. #VentureCapital #PrivateMarkets #PrivateEquity

Some quick thoughts and notes while reading through the Cerebras S-1, with Aman Kabeer Themes: * The chip wars * Timing is everything? * The return of the small IPO? * Growth vs profitability * Hardware vs software * Revenue concentration

Based on Zanbato's data, the current ZX Index Value for Rubrik is close to $34/share. As shown in the graph below, which tracks the ZX Index Value for Rubrik from January 2021, the company has seen activity in the secondary markets between $32-$34/share over the last 6 months, a 35-45% premium to last round pricing. Rubrik ($RBRK) is expected to IPO between $28-$31 per share, following the successful tech IPOs of Astera Labs ($ALAB), which closed yesterday +103.4% since IPO, and of Reddit ($RDDT) +15.1% since IPO. Institutional secondary markets are predictive of IPO pricing -- many of the same institutions drive price discovery in both markets. If you're interested in learning how ZXData can empower your investment strategies, feel free to reach out to us @datainquiries@zanbato.com. This data is based on activity on ZX and its data partners without input from Rubrik. ZX Index Value is derived by applying Zanbato's proprietary weightings to the order flow data collected for the stated period (both bids and asks), based on the order type (firm order or indication of interest) and whether the order has been executed, with greater weight given to more recent orders. #Zanbato #ZXData #Rubrik #RBRK #RDDT #ALAB #IPO #Preipo #MarketIntelligence #PrivateData #PrivateTrading #venturecapital

Good to see a successful IPO! Who's next? "Since trading began, Astera’s shares have continued to climb, reaching $55.73 as of the time of writing, for a gain of around 54%. While the company’s strong early trading will certainly engender critiques that it was mispriced, and that the company left money on the table, its bull-rush into public life may help other private-market tech companies find the courage to list their own shares after a long period of limited IPO activity." #ipo #ai #technology #SWenabledHW #hw