Lyft, Uber and the new IPO class will help the rich get richer — the losers are public investors
div > div.group > p:first-child"> Lyft, Slack, Pinterest and Postmates have already filed. Uber and Airbnb are expected to join before the end of the year. But even with this anticipated consumer tech IPO bonanza, there is strong evidence that the traditional IPO is dying. These companies themselves have stayed private longer than they have in previous decades.
Carta data from more than 6,000 primary financing rounds raised by 4,500 U.S.-based, venture-backed companies over the last four years show that more money was raised per round in 2018 than in 2017. Valuations increased at all stages of a company's lifecycle, and Series D valuations increased by a whopping 128 percent. Moreover, when these later-stage companies raised money in 2018, they gave away less of the company despite receiving record-high valuations.
But don't expect to see all of these companies to go public in the traditional way. Many will break tradition by doing a direct listing, which allows a company to IPO faster and cheaper because they don't have to hire an underwriter or spend time preparing and conducting a roadshow with institutional investors. Moreover, a direct listing allows a company to go public without diluting its shares.
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