Investments

Unicorns Eye Public Markets, Leaving Anemic 2016 IPOs Behind

Unicorn tech firms

Stocks are at all-time highs, as measured in the United States. And yet the torpor that marked the IPO market this past year, especially for unicorns, may be setting up for a reversal in 2017.

Two encouraging data points emerge here, with two far-flung companies in different industries gunning for public listings. In India, ShopClues, the eCommerce play that plies its trade in what are known as tier-two and tier-three cities, has said that it looks to be EBITDA-profitable within the next year (EBITDA is sometimes used as a rough proxy for cash flow). And even in the wake of demonetization, which has hobbled other parts of India’s economy, management has been on record as stating that the firm could be breakeven even at sales of $2 billion, below previous forecasts. That would stand in stark contrast to the losses incurred by eCommerce peers such as Flipkart.

And speaking of Flipkart, Sachin Bansal, who cofounded the firm, said in a speech to the Carnegie India Global Technology Summit that the government there should help local companies thrive (ostensibly in their battle against, say, Amazon).

Closer to home, AppNexus filed paperwork with the SEC for an IPO that could come by the second quarter of next year. The adtech company had been valued most recently at about $1.6 billion.

Granted, two IPOs do not a trend make, but it should be noted that a recent report from Ernst and Young looks toward a robust IPO market in the next year, globally speaking, as IPOs slipped by 16 percent this year over 2015 levels. One beneficiary subsector, said the company, could be unicorns.

Beyond the IPO speculation, Airbnb dropped a lawsuit against New York City (and a host of NYC officials, including the mayor) in a spat over fines that target hosts who post listings that run contra to short-term rental laws in New York. Thus, said TravelWeekly.com, the firm might face the impact of truncated business in that city, among its largest markets.

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