Will Twilio reopen tech IPO window?

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Twilio, the cloud communications platform, has revealed its IPO filing, signifying that it could enter the public markets as early as next month.

If the company ends up going through with its plans, it would likely be just the third tech IPO of the year. This has been the worst year for public offerings since the 2009 recession.

Twilio has been rumored to be entering the public markets for a while. We included them on our predictions list for 2016 IPOs. But like most of the companies on this list, lackluster performance of last year’s tech IPOs and perceived sub par market conditions made it unclear whether it was the right time to list.

The JOBS Act has made it so that companies can file privately, without the public scrutiny, until just weeks before the actual IPO event. Twilio’s decision to reveal its filing right now indicates that the company believes it’s on track to go public very soon.

Many who follow tech IPOs are excited to see that it’s inching closer. “It all feels like a concert where the headliner is running late, and the crowd has been getting antsy,” said Atish Davda, CEO at EquityZen. “Finally, Twilio walks on the stage and gives everyone a reason to calm down.”

Twilio is not profitable — the company reported a loss of $35.5 million on $166.9 million in revenue for the full year last year. This compares with a loss of $26.8 million on $88.8 million in revenue for the year before. In the first quarter of this year, Twilio lost $6.5 million on $59.3 million in revenue.

In the filing, Twilio said it plans to raise $100 million. This is a placeholder and is subject to change. Twilio also revealed that it plans to list on the New York Stock Exchange, under the ticker “TWLO.”

The company cited some possible risk factors, including “our use of open source software could negatively affect our ability to sell our products and subject us to possible litigation.”

“We expect a modest valuation and a small float but a reasonably successful run for Twilio,” said Max Wolff, chief economist at Manhattan Venture Partners.

In the public markets, tech IPOs are evaluated as a broader category, even if the companies themselves have fundamentally different business models. The favorable performance of Acacia Communications could have reopened the perceived window and a positive Twilio debut could push it open further.  

“As a B2B name with many marquee clients Twilio is worth watching, if an imperfect bellwether,” said Wolff. “We don’t see this as reopening the flood gates, but we are sure it will be watched and will influence timing decisions.”