The pendulum of funding fashion appears to be swinging back from very large and expensive late-stage private rounds back to public markets. We witnessed the start of this trend in the second half of 2016 when investors marked down the values of some of their private company investments.
If it proves right, we will be in for a fun and busy year here, covering the new deals and also highlighting fresh opportunities in our existing IPO universe.
In 2016, January was a bad month for the market and the IPO window didn't open until February. This year is different (so far) and it looks like we will have companies in active marketing this month.
Here's a taste of some of the companies that are on deck for this year with links to discover more on some that you might not know.
In the enterprise technology space, we know AppDynamics has already filed. They are a bit similar to New Relic (NEWR) and Splunk (SPLK) which have both done very well. AppDynamics may be the first 2017 technology IPO priced. Dropbox may finally pull the trigger and do an IPO although Box (BOX) hasn't done so well as a compare. Other technology names on the list include Qualtrics which is an online research platform and Cloudera in the big data space. A Cloudera IPO might also ignite some new interest in Hortonworks (HDP) which might be worth another look. Finally, Zuora has been mentioned by many as a top prospect, but I'm not so sure.
On the consumer side Snap is the big dog everyone wants to see bark. (Uber and AirBnB are said to be 2018 but in a strong market you never know.) Some others we are looking for are Blue Apron (home food delivery), Ancestry.com (maybe also 23andMe too) and more names in the online travel space like Hotel Tonight. We note that Trivago did pretty well with their IPO in December, and it looks like that whole space may be in for some new leadership. See our post on TRVG for more.
Some major themes are alive and well and will keep driving the market in newly public names. These are the themes and trends we are tracking closely this year:
- We're in the "Second Machine Age" and no matter what Trump and his people do we will be in a world where jobs continue to disappear thanks to better software, including "AI" and other advanced programming methods that tackle more of our tricky problems. We like some of the "plumbing" that supports this space. Apigee (APIC) got acquired already. We expect Twilio (TWLO) to do very well indeed and note that Mulesoft (terrible name) is looking at an IPO in 2017.
- More connected "IoT" plays from big ones like cars (think MobileEye, MBLY) to tiny wearables (think Fitbit, FIT). The breakout success of Amazon's Echo and similar products will fuel a boom in "smart home" solutions. Either Sonos will get it right or be acquired.
- Virtual and augmented reality. We're bigger fans of augmented applications in the near-term but VR is getting pushed. Just this week IMAX announced their plans for specialized "VR theaters" to test consumer demand.
- Biotechnology and medical devices always find ways to reinvent themselves. Last year we saw the start of gene modification (Editas, EDIT) and this will continue.
- Demographically we'll be watching for ideas that fit the "barbell" age distribution we have now - some for the aging population and others for the "millennial" market that does many things in different ways. This opens the door for disruption in industries ranging from entertainment (Spotify) to investing (Wealthfront.)
- Massachusetts voted to legalize recreational marijuana. It's just another signal that the use of the substance will continue to grow rapidly in the US. We are bound to see a flowering of new listings in the US market this year.
For all these themes you will see some specific stock ideas and more in-depth reports during the year.
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