For most startups, one of the main goals is to take the company public when the time is right. This year, it seems that the startups that went public and were expected to knock it out of the park failed to do so, whereas some of the lesser known names ended up killing it. Here is a brief look at the notable IPO activity that occurred this year:
The good news is that overall IPO activity increased this year compared to last, and many of the companies that have gone public have fared relatively well over the course of the year. Some of the companies that went public that are worth mentioning include:
This app development company focuses on providing its clients with business process management tools and had been around for almost twenty years when it decided to go public this year. Its business application services rival that of Salesforce, the mammoth company with which many people are likely more familiar. Appian’s clients include a number of Fortune 500 companies and federal agencies, and since going public, the trading price per share has increased by almost 80%.
This television and video streaming device company went public just a few months ago, and within weeks of doing so, witnessed a share increase of more than 50%. Of course, the company will have its work cut out for it as it goes forward, given the dominance of Amazon in all things web, including content streaming. Even still, Roku managed to bring in revenue via both subscription pricing and advertising. This slightly different approach to revenue generation should continue to help bolster its early success.
Data security continues to be an incredibly hot topic, so it is not surprising that a company that helps other companies maintain digital security is doing so well post-IPO. Their cloud-based software is designed to protect a company’s employees’ accounts, and big name users include Linkedin and Twentieth Century Fox. Between the big names it attracts, the need for tight data security, and its subscription-based model, this now public entity is expected to grow.
Perhaps the most surprising IPO disappointments this year were Snap and Blue Apron. Despite millennials’ incessant use of Snap, the message sharing app, its post-IPO performance just did not pan out as expected, with a price drop of over 15%, due in large part to competition from Instagram. Blue Apron also had a mega rival to contend with once Amazon announced its intentions to buy Whole Foods. Even though Blue Apron is the top name in its niche, pricing and customer retention have proven problematic, causing a near 50% decline in share price.
The technology and biotechnology sectors experienced the most IPO success. This really is not all that surprising as both industries tend to offer virtually unlimited innovation and growth potential. The need for technology cuts across all sectors, and the convergence of many industries, including pharmaceuticals and biotechnology, will continue to be strong economic drivers for both markets.