Multiple Challenges for 2018 Tech IPOs

TechCrunch’s Danny Crichton has offered some thoughts on the headwinds facing tech companies looking to go public in 2018.

He notes that the year to date has been a positive one for IPOs, with Spotify and Dropbox among the companies listing.

There are strong economic trends driving their moves, and many unicorn startups in the tech sector that make good candidates for late 2018 IPOs.

No major startup has put itself forward as a headliner in the IPO calendar, however, which has dampened excitement for the remaining months.

Eventbrite and SurveyMonkey are two recognisable brands that have filed with the SEC, but leaders like Airbnb and Uber appear to be holding off.

Lyft may look to list in early 2019, Crichton reports, but this would still leave Dropbox and  Chinese electronics company Xiaomi as the largest issues in tech for 2018.

Another factor constraining what might otherwise be a busy period for IPOs is the tech scene in China.

A combination of forces, including interventionist moves by the Chinese Communist Party and tensions with the Trump administration, have reduced the attractiveness of Chinese tech stocks.

China suddenly froze the approval of game licenses earlier this year, for example, hitting Tencent’s share price. This is said to be “creating a cascade of concern for other high-flying Chinese consumer tech companies.”

A final consideration for tech companies with high valuations is that the relative advantages of IPOs may look different a few years down the line. SEC chairman Jay Clayton recently discussed whether private companies might benefit from an expansion of ownership rules.

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