Investments

Will Unicorns Take Flight with IPOs?

2017 for Unicorn IPOs?

It’s raining IPOs! Well, not really, but if Bain’s Blue Coat goes public, the grand total of tech-related IPOs this year will reach — three. But other unicorns are mulling making the switch from private to public entities, with all the rewards and pitfalls that entails. Maybe keep the champagne corked — at least for a while.

It’s raining IPOs. OK, not really, but in this desert of initial public offerings that has marked 2016, our unicorn might be seeing the stirrings of interest in bringing shares to market. With two publicly traded firms and one that has just listed via a placeholder document with the SEC — Blue Coat Systems — the question remains whether these are tremors that may morph into something larger.

The jury is still out, of course, and with the fact that Bain is looking to recoup its $2.4 billion investment in the cybersecurity firm — and then some — after only a year in the private trenches, a few headlines bear mentioning.

Interestingly, some of the most visible IPOs perhaps being groomed are tied to firms that do business, and are domiciled, outside the United States. As noted in the financial trade press, Souq.com, which is based in Dubai and is also the largest online retailer there, may be bringing itself public within the next year and a half to two years. OK, that’s a pretty long runway. But consider that this unicorn, which is valued at around $1 billion, has some plans in the works to be brought to market, as management has noted, but there is no real sense as to how much of the firm will be sold, or even where the common stock might be listed.

Likewise, Indian unicorn ShopClues, which hit the magic $1 billion valuation mark earlier this year, is thinking about bringing shares public, with one important milestone: The firm is on track to turn a profit as soon as next year, and that will trigger the movement toward an IPO, management has said. That would be an aberration but a nice change of pace, wouldn’t it? Black ink rather than the deluge of red that has marked so many others?

Looking at other metrics, there were no down rounds marked the week. But in one notable round of layoffs, WeWork said last week that it would be letting go about 7 percent of its staff, and this comes as the $16 billion valuation tied to the worksharing space company may be a note of caution, as the firm raised $430 million just a few months ago.

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