Go Digit, an Indian insurance startup, has raised $141 million from investors including Goldman Sachs, ADIA, and Morgan Stanley as part of its IPO.
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Zeekr’s market hype is noteworthy and may indicate that investors see value in the high-quality, low-price offerings of Chinese automakers.
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Line Man Wongnai, an on-demand food delivery service in Thailand, is considering an initial public offering on a Thai exchange or the U.S. in 2025.
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News that Jack Dorsey is out at Bluesky caused a stir this weekend. After all, Dorsey is a former Twitter co-founder and CEO, so his investment of time into the rival social network carried weight. The decentralized social networking service said that it is looking for a new board member.
But while we had to talk about Dorsey’s latest on Equity today, it was far from the only topic we got to chat about. Past a busy earnings week ahead of us, we also dug into the latest employment news concerning China’s tech giants. Like many large U.S. tech shops, they are shedding staff. Tech shops around the world are showing that they can do more with less.
Sticking to China, the country is set to deliver another IPO, this time in the United States. Momenta could raise up to $300 million in its debut, meaning that its upcoming listing is is going to carry real weight. (More on Momenta here.)
And to close out we took a look at new capital that the U.S. government is putting into digital twins, and why alt-clouds are making real progress but could run into growth speedbumps in time. Equity is back on Wednesday — we’ll chat with you then!
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
You also can follow Equity on X and Threads, at @EquityPod.
For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast.
This year already proved that startups are willing to go public in a less-than-ideal market — and get rewarded for it, too. But bankers, lawyers and investors said the recent IPO successes aren’t enough to foster more than a dozen tech IPOs this year.
“I don’t think we will have the floodgates open like I might have thought,” Greg Martin, co-founder and managing director at Rainmaker Securities, told TechCrunch. “The trickle was delayed; I thought it would happen sooner in Q1. Because of that, I think the floodgates can’t open til 2025, but we could have a healthy flow of 10 to 15 companies for the year.”
Jeremy Glaser, a lawyer and co-chair of Mintz’s venture capital and emerging companies practice, said that despite how the recent IPOs have performed thus far, people need more data than just a few weeks, or a month, of trading to feel confident.
Looking at how Klaviyo and Instacart are performing today shows why people remain cautious. Klaviyo is currently trading at a $5.94 billion market cap, down from its $9.2 billion IPO price. Instacart is faring better, but still trading under its initial IPO price of $9.9 billion. It’s currently trading at $9.47 billion.
“I’ve lived through a lot of IPO cycles, you really do need an extended period of time where you are seeing multiple IPOs staying above the IPO price,” Glaser said. “I don’t know if we are there yet. We have some positive signs but we need to see more companies staying above the IPO price for an extended amount of time.”
Timing plays a big factor here, too, due to the election. If a couple of companies had come out and made their public debuts at the beginning of the year — and had they done well — it might have given other companies enough time and confidence to get through a full S-1 process before the election. But due to the timing of the recent IPOs, companies would be crunched for time.
Martin added that despite the successes, he’s not sure this is really a good market to go out in anyway. Interest rates aren’t being cut the way many predicted and were hoping for this year, and Martin isn’t convinced that the economy is fully in the clear yet after 2022’s bear market — especially with uncertainty about how the markets will react after the election in November.
“I still feel like recession is not out of the woods yet,” Martin said. “We had, what, 1% growth in Q1? Mostly macro economic factors, it feels like the market is sensing relative stability right now but there [are] a lot of things that could turn that. I’m hopeful [the market] remains stable. I’m remaining optimistic at this point.”
The sentiment from Glaser and Martin seems to align with what other folks in the market are saying, too. A top-tier venture fund recently told TechCrunch that it was advising all of its portfolio companies that could potentially IPO to wait until next year. Colin Stewart, Morgan Stanley’s global head of technology equity markets, recently told CNBC that he thinks 10 to 15 companies could go public this year — right in line with Martin’s prediction — and that 2025 will be better.
Investors weren’t sure what to think about the IPO market heading into 2024. Some thought that activity would start to pick back up while others thought it would be another quiet year, according to a TechCrunch survey. The one thing they all seemed to agree on was that any rise in activity wasn’t likely until the second half of the year.
But then Astera Labs filed to go public in February, and Reddit followed shortly after. Ibotta was next in March, followed by Rubrik just a week later. All four have since floated and popped on their first day of trading. While the respective stocks retreated since then, they are all currently trading above their IPO prices — which were all priced above their initial target ranges.
Watching these four stocks hit the market successfully makes us wonder: Were investors wrong about the timeline of the return of IPOs? But based on sentiment from folks like Martin and Glaser, probably not.
This means that VCs likely have to wait another year for the IPO market to be a meaningful source of liquidity. However, exits aren’t fully off the table this year. Glaser said that he isn’t working on IPOs, but his M&A practice has been the busiest it’s been in a long time. For investors looking for returns this year, that’s good news.
When Asheem Chandna drove up to Rubrik’s office in Palo Alto on a Friday night in early 2015, he was looking forward to learning what the young company that had yet to build its product would show him. The Greylock partner wasn’t disappointed.
The company’s CEO, Bipul Sinha, drew Rubrik’s plan to revamp the data management and recovery market on a whiteboard. “The old versus new architecture he presented was very compelling,” Chandna said. “Based on my knowledge of the sector, I knew it could be built into a large business.”
That was a prescient call. On Thursday, nine years after that meeting, Rubric began its life as a publicly traded company with a market cap of over $6 billion. Greylock holds a 13% stake, according to the latest SEC filings. By the close of market Friday, with shares priced at $38, those nearly 19.9 million shares were worth over $756 million.
But Chandna says it was much more than Rubrik’s desire to take on the arcane data recovery market that motivated him to lead Rubrik’s $40 million Series B in May 2015. (The Series B round sold for $2.45/share, adjusting for splits, according to those SEC documents. While Greylock also participated in later rounds at higher prices, Chandra’s returns on this one are hefty.)
“The longer I do what I do, the more I fundamentally believe that venture is a people business,” said Chandna, who has been an investor for over 20 years and has an enviable track record of successful exits. He has helped incubate Palo Alto Networks in Greylock’s offices and was on the nearly $100 billion-worth company’s board until last year. Chandna was also an early investor in AppDynamics, Sumo Logic and Arista Networks.
Chandna looks for people who are not only motivated and ambitious, but are also self-aware of their weaknesses, and can recruit people who can get things done in areas that are not the founder’s strong suits.
Another essential ingredient for a founder is grit. “If you had technology that was adequate, but slightly inferior to my technology, but you were very self-aware and persistent, you will beat me,” he said.
That’s what he saw in Sinha. Rubrik’s founder had a lifelong dream of starting a company. When he founded the data management and recovery startup in 2013, he couldn’t find strong engineers who wanted to come work there, Chandra recalled. The business he was trying to build was inherently not sexy at the time.
Despite having been an investor with Lightspeed for four years before launching Rubrik, recruiting talent turned out to be a big challenge for Sinha. But he didn’t give up. He pinged engineers on LinkedIn and then invited them for coffee blocks away from where they worked.
“Startup journeys are very hard, even for the most successful companies,” Chandna said. “I want people who won’t take ‘no’ for an answer.”
Perhaps it was Sinha’s grit and ambition that compelled him to take his company public despite the lukewarm IPO environment.
“Rubric has just under $800 million in annualized recurring revenue,” Chandna said, “That’s larger than most companies that went public in the last many years. I think they just wanted to get on with it.”
Chandna declined to say if he expects other Greylock portfolio companies to follow Rubrik’s lead but added emphatically that the firm’s best-performing late-stage businesses are Abnormal Security, Cato Networks, Discord, Figma and Lyra Health.
We will be following their fate closely.
Swiggy plans to raise $1.25 billion in an initial public offering and has secured approval from its shareholders, the Indian food delivery and instant commerce startup disclosed in a filing to the local regulator.
The Bengaluru-headquartered startup, which competes with publicly-listed Zomato and StepStone Group-backed Zepto, plans to raise $450 million through issuance of new shares and offer $800 million of shares from existing backers in the IPO, it wrote in a filing to Ministry of Corporate Affairs.
The Indian startup ecosystem has been eagerly anticipating Swiggy’s public debut, which is slated for later this year. Swiggy counts Prosus, Accel, SoftBank and Invesco among its backers. It was last valued at $10.7 billion in a funding round unveiled in early 2022. Some of its investors, including Invesco and Baron, have since publicly marked up the valuation of Swiggy to over $12 billion.
Swiggy had earlier intended to go public in 2023, TechCrunch previously reported, but deferred the plan due to not-so-favorable market conditions.
This is a developing story. More to follow.
It’s going to be a big week! Tech earnings are coming up, the EV wars are on (and how!), and it feels like venture capital has its head in the clouds. All that adds up to one packed Equity episode!
Today, we dug into the latest markets news, including upcoming earnings, IPOs, and what impact — if any — the bitcoin halving has had on the value of the cryptocurrency.
We also had two new venture capital funds to discuss: A new vehicle from Seraphim focused on space, and TLcom Capital’s new Africa-focused fund. From there, it was time to chat EVs and what impact recent price cuts are having on the value of EV companies.
To close out, we dug into the emerging startup cluster in vector databases and search. In short, normal databases are hot garbage when it comes to the sort of queries we need for AI, but vector search is pretty good at it. Enter startups, venture capital and the biggest tech companies. May the startups win.
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
You also can follow Equity on X and Threads, at @EquityPod.
For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.
Ibotta began it’s path as a public company on Thursday by opening at $117 per share, a big increase from its IPO price of $88, itself an increase from its proposed range of $76 to $84 per share.
And this pop is despite boosting the size of its offering earlier in the week, with existing shareholders expanding their sale by just under one million shares.
Shares are not continuing to climb in early trading, but are holding steady above its IPO price, at around $100 at the time of writing.
The company left money on the table “for investors who are very bullish on it [expanding] its third-party platform beyond just Walmart,” which has become a key partner for Ibotta and represents much of its current revenue, said Nicholas Smith, a senior research analyst at pre-IPO research company Renaissance Capital. Given that its started trading far above its IPO price today, some critics may argue that it left too much money on the table, and could have raised more for itself.
Its successful debut marks the third major tech IPO in the United States this year, and is the third in a row to price well and immediately trade higher. It is also the first half of a pair of technology offerings that will list this month, with data management and security company Rubrik expected to list its own shares next week. The two companies follow Reddit and Astera Labs out of the private markets, after both the social media company and datacenter connectivity hardware play continue to trade above their IPO prices.
Investor eagerness for Ibotta indicates that “there is an increasing appetite for IPOs again” Smith said, “particularly in the tech space.”
Don’t pop the champagne yet for the tech IPO market coming roaring back, however. Ibotta pivoted to business sales over a direct-to-consumer model, which helped it reach profitability in recent periods. Classic tech IPOs tend to feature tech companies still in growth mode and deeply in the red.
Rubrik could be a better test of IPO appetite. Its products are in the data management and security worlds, and the company is deeply unprofitable and growing more slowly than Ibotta. That said, it does have a strong cloud revenue story to tell. If its debut goes well, we could see more yet-unprofitable unicorns try a shot at the public markets.
Smith agrees, calling the upcoming Rubrik IPO “an even bigger test” for tech debuts “given its weaker current financial picture.”
We’ll find out next week.
Tucked into Rubrik’s IPO filing this week — between the parts about employee count and cost statements — was a nugget that reveals how the data management company is thinking about generative AI and the risks that accompany the new tech: Rubrik has quietly set up a governance committee to oversee how artificial intelligence is implemented in its business.
According to the Form S-1, the new AI governance committee includes managers from Rubrik’s engineering, product, legal and information security teams. Together, the teams will evaluate the potential legal, security and business risks of using generative AI tools and ponder “steps that can be taken to mitigate any such risks,” the filing reads.
To be clear, Rubrik is not an AI business at its core — its sole AI product, a chatbot called Ruby that it launched in November 2023, is built on Microsoft and OpenAI APIs. But like many others, Rubrik (and its current and future investors) is considering a future in which AI will play a growing role in its business. Here’s why we should expect more moves like this going forward.
Some companies are adopting AI best practices to take the initiative, but others will be pushed to do so by regulations such as the EU AI Act.
Dubbed “the world’s first comprehensive AI law,” the landmark legislation — expected to become law across the bloc later this year — bans some AI use cases that are deemed to bring “unacceptable risk,” and defines other “high risk” applications. The bill also lays out governance rules aimed at reducing risks that might scale harms like bias and discrimination. This risk-rating approach is likely to be broadly adopted by companies looking for a reasoned way forward for adopting AI.
Privacy and data protection lawyer Eduardo Ustaran, a partner at Hogan Lovells International LLP, expects the EU AI Act and its myriad obligations to amplify the need for AI governance, which will in turn require committees. “Aside from its strategic role to devise and oversee an AI governance program, from an operational perspective, AI governance committees are a key tool in addressing and minimizing risks,” he said. “This is because collectively, a properly established and resourced committee should be able to anticipate all areas of risk and work with the business to deal with them before they materialize. In a sense, an AI governance committee will serve as a basis for all other governance efforts and provide much-needed reassurance to avoid compliance gaps.”
In a recent policy paper on the EU AI Act’s implications for corporate governance, ESG and compliance consultant Katharina Miller concurred, recommending that companies establish AI governance committees as a compliance measure.
Compliance isn’t only meant to please regulators. The EU AI Act has teeth, and “the penalties for non-compliance with the AI Act are significant,” British-American law firm Norton Rose Fulbright noted.
Its scope also goes beyond Europe. “Companies operating outside the EU territory may be subject to the provisions of the AI Act if they carry out AI-related activities involving EU users or data,” the law firm warned. If it is anything like GDPR, the legislation will have an international impact, especially amid increased EU-U.S. cooperation on AI.
AI tools can land a company in trouble beyond AI legislation. Rubrik declined to share comments with TechCrunch, likely because of its IPO quiet period, but the company’s filing mentions that its AI governance committee evaluates a wide range of risks.
The selection criteria and analysis include consideration of how use of generative AI tools could raise issues relating to confidential information, personal data and privacy, customer data and contractual obligations, open source software, copyright and other intellectual property rights, transparency, output accuracy and reliability, and security.
Keep in mind that Rubrik’s desire to cover legal bases could be due to a variety of other reasons. It could, for example, also be there to show it is responsibly anticipating issues, which is critical since Rubrik has previously dealt with not only a data leak and hack, but also intellectual property litigation.
Companies won’t solely look at AI through the lens of risk prevention. There will be opportunities they and their clients don’t want to miss. That’s one reason generative AI tools are being implemented despite having obvious flaws like “hallucinations” (i.e. a tendency to fabricate information).
It will be a fine balance for companies to strike. On one hand, boasting about their use of AI could boost their valuations, no matter how real said use is or what difference it makes to their bottom line. On the other hand, they will have to put minds at rest about potential risks.
“We’re at this key point of AI evolution where the future of AI highly depends on whether the public will trust AI systems and companies that use them,” the privacy counsel of privacy and security software provider OneTrust, Adomas Siudika, wrote in a blog post on the topic.
Establishing AI governance committees likely will be at least one way to try to help on the trust front.
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