The first group of upcoming potential unicorn IPOs is shaping up well

Sure, it’s demo day week over at Y Combinator, but that doesn’t mean we have to¬†only discuss the smallest and youngest startups out there. In fact, a small news item from today reinforces our view that the list of companies we’re earmarking as strong possibles for an IPO when the window for public debuts opens is getting rather long.

It’s even more extensive than we know, given the number of late-stage software startups that have likely reached public-company revenue scale and, provided that the economy holds up this year, are likely growing quickly enough to pursue an IPO if they are willing to settle for a smaller valuation.

But the list is long indeed: Several startups that have said they are eyeing a debut are making the right hires or simply have IPO filings in the wings. Let’s talk about who we have in mind.

The new names

We’ll start with some new entrants to our list of late-stage startups that are gearing up for a public offering:

  • Klaviyo: According to media reports, Klaviyo is going public later this year. Or, is likely to do so, provided market conditions don’t get worse. With reported ARR of around $600 million and a last private valuation of around $9.5 billion, the marketing automation company could make a material splash when it goes public. Given that it is a pretty pure-play software company by our understanding, it could help the market figure out how to price former startups that want to list their shares.
  • Remote: Guess who just announced that they hired a CFO? Remote did; it announced today. The company sits in an interesting market segment (remote employee support) and most recently raised $300 million against a valuation of more than $3 billion. Now, a CFO doesn’t mean that an IPO is around the corner, but it does mean that Remote is getting its books in order. Given that it could take a while for the IPO window to truly open, we’re content to place Remote into the “first cohort” list, even if a 2023 debut is not likely in the cards.

Remote makes for a good segue to a group of companies we’ve been writing about quite a bit lately:

The HR unicorn herd

After Rippling raised a fresh nine-figure round at a flat valuation and competing startups started dropping revenue figures, it is clearly time for a lot of HR tech unicorns to get the heck out of the private markets:

  • Rippling and Gusto are both worth around $10 billion. The nuance in their last private valuations doesn’t matter much because we’ll learn a lot more when they are priced by public-market investors. What does matter is that these two companies alone represent $20 billion or more of venture capital marks, meaning there is a pretty hefty chunk of institutional pressure on them to get off their backsides and go public. Their numbers are presumably good, but the small facts and figures that we have collected on each are hardly GAAP-compliant income statements. If either of these companies misses the first IPO window, it will likely be an uncomfortable data point about their historical operating results.
  • Velocity Global is another name from this group. Firstbase as well, though we’re less sure of how IPO-ready it is.

This group matters because helping companies hire and pay workers at home and abroad is a massive business. Startups have succeeded in building huge businesses in the space, and now it is past time to graduate.

The known knowns

This group is simpler:

  • Turo: The peer-to-peer car rental company has had an IPO filing on ice for some time. To its credit, it has filed publicly and updated its results throughout the last year. We have notes here on its results, but of all the companies in today’s post, Turo has shown the most guts by growing in the public eye.
  • The privately filed duo: Reddit and Instacart have long been “next year’s IPOs” in our view. Perhaps this is the year the two companies, both of which have filed privately to go public, will be able to get off the sidelines and kick a field goal or whatever the football analogy is for an IPO. Don’t forget that these two companies have massive private-market valuations even by unicorn standards. Their offerings are going to be big damn deals.

Who else?

Want to get a little spicy? Here are a few more companies that The Exchange’s Anna Heim and I wanted to toss into the mix as possibles:

  • Databricks: Remember when Databricks was raising new rounds every other minute and stacking ARR like it was firewood for a cold winter? Last valued at $38 billion with $600 million in ARR to back it up in August of 2021, the company is surely larger now. The question is whether it can defend that final private mark. A Databricks S-1 would be akin to a surprise birthday present wrapped in gold for me, so we may be including it in this list prematurely out of sheer curiosity.
  • Anna has Doctolib, BlaBlaCar and Rappi on her mind. These companies hail from outside the United States, so we could see them list somewhere else. It’s key to remember that unicorns are hardly creatures confined to the U.S. There’s another ocean of startups around the world that are potential early IPO candidates.
  • eToro and Acorns: What happens when you call off your SPAC and instead raise more private money? We presume that the next step is a traditional IPO. Given that both of these consumer fintechs had to get their books public-markets ready during their SPAC march, they are presumably in fine operational shape for an IPO. The question is just a matter of price and timing. More here and here.

This list is going to get longer. Stability AI wants to go public, for example.

When the IPO dam breaks, I expect to be contentedly swamped. The companies herein are each fascinating in their own way. Bring on the S-1s!