"A FLOTATION is like your own funeral. You usually do it only once,” deadpans the chief financial officer of a software company that recently staged a blockbuster initial public offering (IPO). Some compare a listing to a wedding, requiring much frantic preparation and ending with a big celebration and bell-ringing. Others liken it to an 18th birthday, marking the moment a young company is launched into the harsh realities of adult life.
Whichever metaphor you choose, going public combines mixed emotions, much complexity and myriad idiosyncracies. Despite that, and undeterred by recent wobbles in equity markets, startups have been listing in droves. So far this year tech firms have raised $60bn, according to Dealogic, a data provider, more than at the height of the dotcom bubble in 2000. Include all types of business and the figure is close to $250bn (see chart 1). One headhunting agency is said to have more than 50 searches under way for finance chiefs at startups hoping to go public soon.
This week alone will see a handful of blockbuster flotations. They include Amplitude, a data-analytics company most recently valued at $4bn, Olaplex, a hair-care-products firm seeking a valuation of $10bn, and Warby Parker, a maker of spectacles popular among hipsters that could be worth nearly $3bn. Investors can’t get enough of the fresh blood. Despite a sharp drop in the first half of the year, recently listed firms are back in favour, and have handily outperformed the stockmarket as a whole since the start of 2020 (see chart 2).