View the San Francisco for Sunday, March 23, 2025
At the end of last year, it looked like the tech industry’s yearslong drought in initial public offerings was finally going to break.President Donald Trump’s on-and-off, up-and-down tariffs and other radical policy changes have sparked fears of increasing inflation and a recession, leading to a huge stock market sell-off that started last month and has continued into this one.
That sell-off depressed the shares of recently public companies, as well as those of the companies to which the tech startups that aspire to go public peg their valuations. That uncertainty is likely spurring at least some companies to push back their IPO plans, market watchers told The Examiner. Even if there’s an uptick in offerings later this year, 2025 is not likely to see a breakout number of tech companies going public, they said. “Looking at everything that’s going on right now … it’s tough to expect it to be as strong of a year as maybe people hoped at the end of 2024,” said Kyle Stanford, the director of research for the U.S. venture industry at PitchBook, an industry research firm. The fate of the tech IPO market is particularly important to San Francisco, because it has a huge group of companies that are— and local venture-capital investors eager for them to do so. Of the 1,258 global unicorns — startups worth $1 billion or more, a rough indicator of companies that traditionally were ready to go public —would finally be the one in which the window would start to open wide for public offerings. The economy was relatively strong. With inflation slowing, the Federal Reserve was widely expected to cut rates in the near future, which could help juice stock markets. The shares of companies that had recently gone public had performed well. On top of that, the election was over, and with it, the uncertainty over who would be the next president. And among many on Wall and Main streets, Trump’s policies were expected to be more business-friendly than Joe Biden’s. But things haven’t turned out as many expected. So far this year, there have been eight tech IPOs, up from five in the first quarter last year, according to data from Renaissance Capital, which runs an exchange-traded fund consisting of the shares of newly public companies. But none of those companies that have gone public this year are based in the Bay Area, and only one of them — SailPoint — raised more than $25 million in its offering. By contrast, two Bay Area companies — Astera Labs in Santa Clara and San Francisco-based Reddit — went public in the first three months of last year, and they both raised more than $700 million in their offerings. “At the end of last year, signs definitely pointed to a more material revival in the tech sector this year, and we just haven’t really seen that yet,” said Avery Marquez, director of investment strategies at Renaissance, which also provides research on pre-IPO companies. Much of the reason for that has been the Trump-ignited uncertainty in the economy and market. In particular, his tariffs on key American trading partners such as Canada, Mexico and China have led to worries about a wide and damaging trade war that could depress the U.S. and global economy and set off a sharp increase in prices, delaying interest-rate cuts.Since hitting its all-time high last month, the Standard and Poor’s 500 index has fallen more than 10% in about three weeks. Since hitting its all-time high last month, the S&P 500 index has fallen more than 10% in about three weeks. Earlier this month, the Nasdaq composite index, which is largely comprised of tech stocks, was down as much 15% from the record high it set in mid-December. “There’s been a reset the last month,” said Rick Kline, an attorney with law firm Latham & Watkins who advises startups contemplating public offerings. The market slump has weighed heavily on the shares of many newly public companies. Renaissance’s IPO exchange-traded fund fell 22% between early February and early March. While Reddit and Astera Labs are still trading well above their public offering prices, both have seen their share prices drop by more than half since reaching record highs earlier this year. The tech IPO market tends to do well when multiples — the ratio of companies’ stock prices to their per-share revenues or earnings — are high and market volatility is low, Stanford said. When prices are unstable and falling, the number of offerings drops, he said. “What we’ve seen, obviously, the last month, volatility has spiked, prices have come down,” Stanford said. “ really throws the outlook of the market into much more uncertainty.” For at least some companies, the sell-off has likely shaken their confidence about going public in the near term, Kline said. Even companies that have recently filed to go public might wait a bit longer than normal to go out, hoping the markets settle down, Stanford said. The end result is likely to be that this year looks a lot like last year in terms of the number of tech companies that go public, analysts say.in offerings that priced their shares at $5 or higher, according to data from Jay Ritter, a finance professor at the University of Florida who closely tracks the IPO market. That was up from nine in 2023 and six in 2022, but well off the recent high of 121 in 2021. Throughout the 2010s, the number of tech companies that went public each year generally ranged from the 30s to the 50s, according to Ritter’s data. For their part, Marquez and Kline both said they think the market could still pick up later this year. They both said they believe the market will calm down in coming weeks and months. Investors might have been initially surprised about Trump’s tariffs and other policies, but most have experienced a Trump presidency before and will likely learn to live with it, Kline said. “I think it’s going to calm down fairly quickly and ... by summer, it will just be the new norm, and I think the volatility is likely to wane,” he said. At a conference Marquez went to earlier this month, private-equity and venture-capital investors professed their faith that the IPO market is going to rebound and said they still planned to take companies public this year, she said. “That’s probably, in my mind, the biggest reason to believe that we will actually see a pickup this year,” Marquez said. There have recently been increasing numbers of startups that are interested in having discussions about going public or actually taking the first step of meeting with IPO bankers and lawyers, Kline said. Meanwhile, in recent weeks, four bigger tech startups — CoreWeave, MNTN, Klarna and San Francisco’s Hinge Health — have actually filed to go public. CoreWeave is expected to head to Wall Street by the end of the month and raise $3 billion in the process. If those companies successfully complete their offerings, it could encourage more startups to go public, Kline said. The second half of the year will likely see a significant uptick in offerings, setting up the market for a better year in 2026, he said.“I will admit I’ve said this before,” he said.“Family is always Forever” sign at a homeless encampment on Merlin Street off of Harrison Street in San Francisco during a sweep on Wednesday, Nov. 1, 2023. Sam Cobbs likened San Francisco’s interminable struggle against homelessness to a faucet inadvertently left running. The first thing you must do is turn off the faucet, Cobbs said, before addressing the damage left in its wake.It’s billed as a public-private partnership — and if it’s successful, it could provide The City with a model to follow in its quest to prevent people from ending up on the streets. “One of the things that we’ve learned at Tipping Point over the years is we need to prevent people from becoming homeless before they actually do,” said Cobbs, the CEO of Tipping Point Community, in an interview., who founded the nonprofit, heralded the new pilot program when it was announced earlier this month. But the concept was in development prior to Lurie taking office, according to Cobbs, and the nonprofit had also worked with former Mayor London Breed’s administration on its formation. The pilot program comes as Lurie seeks to make good on promises not only to hold nonprofits to a higher standard, but spend The City’s finite resources widely while tackling its most entrenched social problems. “I want families who are struggling right now to know that you are not alone,” Lurie said Monday during a press conference in which he announced his vision for homeless and addiction services. “Our community and this administration stand ready to support anyone ready to break the cycle of homelessness for good.”Mayor Daniel Lurie, with Tenderloin resident John Lauw, 68, at St. Anthony’s Dining Room on the morning of his inauguration in San Francisco on Wednesday, Jan. 8, 2025. The $11 million pilot is predicated on the idea that providing cash assistance, such as in the form of a rent payments, might not be enough to stop a family’s slide into homelessness. The new program brings together five community-based nonprofits that, in theory, will coordinate to ensure that people receiving help not only get the quick cash they need to stave off disaster, but are in a more stable position moving forward. A hypothetical example Cobbs provides is that of a person who receives a rent payment, but has unaddressed mental-health issues. Linking that person to treatment could help stabilize them and ensure they’re able to pay rent on their own moving forward. Tipping Point is not a service provider, but a grantmaker that funds organizations providing those services. The Booker T. Washington Community Service Center is one of five San Francisco-based nonprofits that Tipping Point tapped to implement its vision. By joining together the nonprofits, Tipping Point is betting that it can help ensure people don’t slip through cracks in the system. When one organization might lack the know-how or program to assist a person in need, another might be able to step in. It’s also a wager on the value of including organizations that have built trust in certain communities, even if they aren’t as well-resourced as larger nonprofits. Booker T. Washington Community Service Center has long been an anchor in the Black community, while APA Family Support Services is similarly rooted among Asian American and Pacific Islander residents. Mission Neighborhood Centers has more than 100 years of history in its namesake neighborhood. The initial focus of the work will be limited to 1,500 families deemed to be at risk of homelessness because families are the “Prevention has and always will be the strongest tool in all of our toolbox,” Erica Kisch, CEO of Compass Family Services, said Monday at the press conference.The 2024 Point-in-Time Count found 1,103 homeless people in families — a 94% increase from the previous tally in 2022, when 605 such people were counted. City officials lauded the results of the 2024 Point-in-Time Count, a biennial census of the homeless population, which showed continued progress in reducing the number of people living without shelter on the street.There were 1,103 homeless people in families in 2024, according to the Point-in-Time Count. That was a 94% increase from the previous tally in 2022, when 605 such people were counted. Compass Family Services has attributed that increase in part to efforts to better count homeless families in last year’s census.starting in 2022 as rental-assistance and other social-support programs implemented during the pandemic began to expire, according to federal data,released by the nonpartisan Center on Budget and Policy Priorities released last month came to two key conclusions — rental assistance is effective at preventing homelessness, but the government should also “provide adequate, sustainable funding to make supportive services available to anyone who needs them to find and maintain housing.” The City has significantly expanded shelter and permanent supportive housing in recent years, but it has struggled to adequately preventin the first place. San Francisco’s Department of Homelessness and Supportive Housing estimates that three new people become homeless for every oneBrian Wheelihan, 39, moving out of a homeless shelter in San Francisco on Monday, Dec. 23, 2024 preparing to move to his own apartment on Christmas Eve. The number of homelessness-prevention grants distributed by the department has not radically changed in recent years. It counted 1,738 households that were able to secure or maintain housing thanks to city grants in fiscal year 2019;in the most recently completed fiscal year. “San Francisco has always had prevention services,but they haven’t necessarily been coordinated in a way that people understand where to go and what the focus is,” Cobbs said. “We want to make sure that we are building a real system as opposed to playing whack-a-mole.” The Tipping Point pilot program will kick off next month and run until June 2026. Results are expected to be announced in fall 2027, more than a year after the program ends, allowing time to assess whether families have stayed housed. Tipping Point will also look to see whether the program was cost-effective. If successful, Tipping Point and The City hope the model can be expanded and used not only for families, but other people at risk of homelessness, as well. “After you’ve shown that it works, then you can go back and ask government to invest in it,” Cobbs explained. Asked if Lurie’s administration would judge Tipping Point’s findings more hospitably, given that Lurie founded the nonprofit, Cobbs laughed.A new report from UCSF found that among the half of the unhoused population struggling with drug addictions or mental illnesses, 42% of survey respondents said that they began to regularly use substances only after they fell into homelessness.and then a downward spiral into homelessness: That’s the linear, causal progression — drugs and mental-health problems leading to homelessness — that many think of when imagining how people end up on the street.“There is no question that substance use and mental-health challenges increase an individual’s risk of homelessness,” said Dr. Margot Kushel, who directs the university’s Benioff Homelessness and Housing Initiative. However, the reverse seems to be true as well, said Kushel during a webinar held Thursday to present the findings of the report authored by her team. “Homelessness increases the risk of behavioral-health challenges through a variety of mechanisms,” she said, pointing to the stresses, dangers and traumatic experiences that often accompany life on the street.— which included thousands of questionnaires and hundreds of interviews — that the UCSF team describes as “the largest representative study of homelessness in the U.S. since the mid-1990s.” The report’s release comes as the administration of Mayor Daniel Lurie works to firm up its plans to move the Among its key findings, the report found that among California’s homeless population, mental illness and drug abuse are widespread — though not universal — with about 48% of respondents reporting one or both problems. That figure is The UCSF report also examined how the half of the unhoused population struggling with drug addictions or mental illnesses first became homeless. Among that group, it found that 8% of people cited drug or alcohol use as the primary reason that they lost housing. However, far more, 42% of respondents, said that they began to regularly use substances only after they fell into homelessness.For example, the survey found high rates of assault and sexual-abuse reports among respondents. Many homeless people also said they hadAn unhoused person stands with their belongings on 13th Street near Bryant Street in San Francisco on Monday, March 18, 2024. Sometimes, homeless people — a population that the report found suffers from depression and anxiety at high rates — turn to drugs as a coping mechanism. Other times, many homeless people, fearing for their safety, turn to methamphetamine as a means of staying awake and alert at night, the researchers said. The findings suggest that earlier interventions are more effective when it comes to arresting the downward spiral that often accompanies the fall into homelessness, said Marc Dones, the policy director at the Benioff Homelessness and Housing Initiative. “Let’s not get to four weeks; let’s not get to six months,” Dones said. “If we resolve people’s experiences of homelessness faster, then we might not need to couple as many behavioral health supports to the homelessness system as we are currently seeking to do.”. It also calls for a broad overhaul of San Francisco’s homeless initiatives, including the introduction of streamlining and accountability measures for The City’s rehousing efforts, and its various programs to provide support services and rental assistance to homeless people. Earlier this month, Lurie’s office also announced the launch of an 18-month pilot program that aims to prevent family homelessness before it begins by offering assistance to families on the brink of losing their homes. The program will be funded with $11 million from Tipping Point Community, the nonprofit that Lurie once led. Researchers behind the UCSF report have put forward their own list of policy recommendations that they say will help to prevent the slide into homelessness. Among them, the researchers said local governments should expand the use of support services that have a low barrier to entry for those who need help. They pointed to things like sober centers, the use of medications for opioid-use disorders, and outreach teams that are trained in crisis intervention. Dones also cited a pilot program currently underway in Los Angeles that uses artificial intelligence to better direct resources towards helping to. The program tracks things like arrest reports and the use of food support to identify residents that are at heightened risk of homelessness. “That’s the work that is for our team on the prevention side of things really exciting,” Dones said. “And we would love to see more jurisdictions really aggressively pursuing prevention, to really tamp down on the inflow into the system.”Click and hold your mouse button on the page to select the area you wish to save or print. You can click and drag the clipping box to move it or click and drag in the bottom right corner to resize it. When you're happy with your selection, click the checkmark icon next to the clipping area to continue.This is the name that will be displayed next to your photo for comments, blog posts, and more. Choose wisely!Create a password that only you will remember. 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