With Reddit the latest tech firm set to take the IPO plunge, which venture capital-backed startups are next in the initial public offering pipeline? Gaming juggernaut Epic Games, digital-health startup Noom and fintech giant Stripe, among others.
That's according to venture-capital data firm PitchBook, which recently published its list of 20 VC-backed startups primed for a potential IPO this year.
As the stock market hits new heights in 2024, startups and their venture-capital backers wonder if the IPO window may finally be opening after two years of little IPO activity from the tech sector.
PitchBook identified 20 possible IPO candidates this year based on factors like revenue growth, business model and the quality of their management teams. PitchBook also quantified each startup's chances of an IPO by using its VC exit predictor methodology, a machine-learning tool it uses to determine the likelihood a startup goes public, based on data PitchBook collects.
Below are the 20 VC-backed startups PitchBook says are potential IPO candidates in 2024.
Reddit's IPO filing could be an indicator more startups are finally ready to take the leap to go public, but PitchBook warns enthusiasm for public offerings may still be muted. The market's gains have largely been fueled by "technology stalwarts with strong operating fundamentals," rather than "speculative startups with unproven track records."
PitchBook said its data shows tech startups have "dramatically underperformed" the broader market over the past five years, which could lead to a slower trickle of tech IPOs in 2024.
"Still, with public market multiples holding steady at healthy levels and a long-term IPO drought leaving dealmakers chomping at the bit, it’s likely some VC-backed companies will test the public waters in 2024," the report said.
Reddit, which is seeking a valuation of up to $6.5 billion in its IPO, would be the first social-media startup to go public since Pinterest in 2019. Reddit, which will trade under the ticker symbol RDDT, was last valued at $10 billion in 2021, when it raised $410 million.
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