Cheddar Crystal Ball: A Blockbuster Year for Tech IPOs Ahead in 2019

December 17, 2018

By Bridgette Webb

2019 is set to be a blockbuster year for tech IPOs. In preparation for the new year and all the public debuts it will bring, we're counting down the most likely and buzz-worthy candidates.

  • Uber and Lyft

The biggest IPOs on deck are the two brightest names in ride-hailing: Uber and Lyft.

Uber reportedly received proposals from Goldman Sachs and Morgan Stanley that valued the ride-hailing giant at as much as $120 billion dollars. Lyft, on the other hand, is valued at about $15 billion dollars.

According to the editor-in-chief at Crunchbase News, a key factor for the success of these two offerings will be timing. "I would say that Lyft gets out first," Alex Wilhelm told Cheddar Monday.

"It's a domestic business, it's simpler, it loses less money, I think it has a higher revenue growth percentage right now."

It's unclear whether investors will have the appetite for both ridehailing firm stocks, so whichever player comes to market first will likely have the advantage. This is especially important for the smaller of the two, Lyft.

Lyft is targeting an IPO as early as March or April, while Uber CEO Dara Khosrowshahi has said the company is on track for a listing in the second half of 2019.

  • Airbnb

Another San Francisco-based startup, Airbnb, is eyeing mid-2019 for its IPO. The home-share company claimed over $1 billion in revenue in its most recent quarter, and the firm is reportedly profitable on an EBITDA basis.

Recently, the company tapped former Amazon ($AMZN) executive Dave Stephenson as its chief financial officer, a position that had been vacant for nearly 10 months ー an addition that will presumably bring the company closer to its IPO dreams.

"Everyone who talks about ... IPOs of companies that are worth more than $10 billion is kind of dicey on Uber and very positive on Airbnb," Wilhelm said.

"[They have] great financials, great company, great brand. I don't see it stumbling much, unless its cost profile is higher than we expect, but given the profitability how bad could it be?"

Airbnb may have a more turbulent ride to the public market than its peers. Regulators worldwide have sharpened their restrictions on the company.

In Paris, hosts must now register with the city government and can only list their homes for 120 nights each year; in Amsterdam, new rules will restrict hosts to listing their rooms for 30 nights per year; and in New York hosts can only rent their units for 30 days or more unless they are in the apartment at the same time.

In an effort to compensate, the company has broadened its offerings ー in November it announced it's entering the home-building business through a new initiative, Backyard. The company is set to start testing prototypes for “adaptable” residences as early as next year.

  • Pinterest

And then there is Pinterest. The social network, which lets its users create a digital inspiration board of images, hasn't earned the same level of attention as its ride and home-sharing peers, but it does have a sky-high valuation of about $12 billion dollars. In 2017, it reported $473 million in revenues. According to Crunchbase, Pinterest will enter its IPO with something close to 1 billion in trailing revenue.

Wilhelm said he's bullish on the company if it does go public ー but he's skeptical about the timeline.

"People have predicted that Pinterest will IPO since 2015, so I am a little reticent to say that it will happen," he said.