Tech IPOs are coming back — now they have to perform
InstaCart employees fulfill orders for delivery
Patrick T. Fallon | Bloomberg | Getty Images
Tech investors last week finally heard utterance of their favorite three-letter acronym: IPO.
It’s been 20 months since a notable venture-backed tech company went public in the U.S., and the chatter in Silicon Valley has centered around who will break the ice. On Friday, grocery delivery startup Instacart and data and marketing automation company Klaviyo filed for stock market debuts.
Earlier in the week, chip designer Arm, which is owned by Japan’s SoftBank, said it plans to hit the Nasdaq seven years after being taken private in a $32 billion acquisition.
The three companies have very little in common, but collectively they represent a test of the excitement level among public market investors for new opportunities. Depending on how they perform out of the gate, their offerings could propel others to follow in the fourth quarter.
“Other teams will watch the reception of these and it could encourage some of those management teams to stop waiting around for yesteryear and just get it done,” said Lise Buyer, founder of IPO consultancy Class V Group.
By “yesteryear,” Buyer is referring to the kinds of valuations tech companies were achieving in 2020 and 2021, which were record years for tech IPOs. Software vendor Snowflake, which debuted in late 2020 and saw its price-to-sales multiple shoot up to about 50, now trades at under 17 times revenue. Food delivery company DoorDash has seen its stock drop by more than two-thirds since its high in 2021, even though revenue has since grown by over 60%.
“We aren’t going back to 2021 anytime soon,” Buyer said.
Instacart, backed at high prices by venture firms including Sequoia and Andreessen Horowitz, has had a big valuation haircut ahead of its IPO. After raising private cash at a $39 billion valuation in early 2021, the company slashed that number to $24 billion in March of last year as tech stocks sank and growth slowed dramatically in a post-Covid world. The valuation reportedly fell by another 50% by late 2022.
DoorDash, which is probably Instacart’s closest public market comparison, currently trades at 3.8 times revenue. That kind of multiple would value Instacart at around $11 billion.
Instacart, which reported revenue growth of 15% in the latest quarter to $716 million, has managed to turn a profit for five straight periods by keeping costs in check and slashing head count. Net income increased to $114 million from $8 million a year earlier.
Klaviyo, which was valued at $9.5 billion in a 2021 funding round, has not been forced to reduce its valuation, according to Pitchbook and public reports. Founded in 2012, the company’s technology helps clients store user data and build profiles that enable targeted marketing via email, text messages and other channels.
Andrew Bialecki, CEO and co-founder of Klaviyo, poses for a portrait in Boston on Sep. 5, 2019.
Barry Chin | Boston Globe | Getty Images
Even though it has a much lesser-known brand, Klaviyo is growing significantly faster than Instacart, with revenue in the second quarter climbing 50% to $164.6 million. The business swung to a profit of $10.9 million in the period after losing close to $12 million a year earlier.
When looking for comparisons, the Bessemer Cloud Index, which consists of about 70 publicly traded cloud companies, provides the cleanest data. Klaviyo’s growth rate would put it near the top of the index, where companies trade at around 12 times revenue. That would imply a valuation for Klaviyo in the neighborhood of $7 billion.
Klaviyo’s biggest institutional backer is Summit Partners, followed by e-commerce software vendor Shopify, which is a key business partner. Venture firm Accel is also an investor.
According to Buyer, it’s not surprising to see companies filing to go public right now. The way SEC rules work, management teams and bankers have to wait at least 15 days after the IPO filing before they can start their roadshow. The offering could take place two weeks later.
Companies that filed last week can hit the road in early September, right after Labor Day, and go public in the middle of the month.
“Historically, late August is when you see filings for companies that want to be first in the back-to-school season,” Buyer said. “The timing makes all sorts of sense. People are coming back from the summer holidays with a fresh look at the market and interest in adding new names in Q4.”
While Instacart and Klaviyo could have significant implications for startup investors as they look at what to expect for the rest of 2023 and into next year, Arm has a slightly different audience.
The chip designer is owned by Masayoshi Son’s SoftBank, which is seeking liquidity after losing billions of dollars in recent years on mistimed and overly aggressive investments in names like WeWork, Chinese ride-hailing company Didi and Indian hotel company Oyo.
Not only is Arm much bigger than a typical venture-backed company at the time of IPO, but it’s based in the U.K. and was a public company in the past.
Arm, whose technology is critical to almost all of the world’s smartphones, reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March, according to its filing. Arm’s 2023 revenue was slightly down from the company’s 2022 sales of $2.7 billion.
To capture a public market valuation of $32 billion, Arm would need a multiple of roughly 61 times earnings. Within the semiconductor market, Nvidia towers over everyone, with a price-to-earnings ratio of 114. But that’s a company that’s tripled in value this year and just told investors to expect 170% sales growth in the current quarter. Elsewhere in the chip space, Qualcomm trades for 15 times earnings and Applied Materials has a ratio of 19.
The technology sector may be starting to slow again. The Nasdaq is up 30% this year, coming off its worst year since 2008, but an outsized portion of the gains come from huge rallies in shares of Nvidia and Meta. So far in August, the Nasdaq is down 5.3% and is headed for its first monthly drop since February.
But at some point, companies have to stop focusing on market conditions and just decide it’s time to be public, Buyer said, as there hasn’t been a significant VC-backed tech IPO in the U.S. since HashiCorp and Samsara went public in December 2021.
The market will determine a company’s value, and if it performs over time, there will always be opportunities to sell shares at a higher price.
“You’ve got to prove your worth in the marketplace,” she said.
A screen showing the price of various cryptocurrencies against the US dollar displayed at a Crypto Panda cryptocurrency store in Hong Kong, China, on Monday, Feb. 3, 2025.
Lam Yik | Bloomberg | Getty Images
The crypto market slid Friday after President Donald Trump unveiled his modified “reciprocal” tariffs on dozens of countries.
The price of bitcoin showed relative strength, hovering at the flat line while ether, XRP and Binance Coin fell 2% each. Overnight, bitcoin dropped to a low of $114,110.73.
The descent triggered a wave of long liquidations, which forces traders to sell their assets at market price to settle their debts, pushing prices lower. Bitcoin saw $172 million in liquidations across centralized exchanges in the past 24 hours, according to CoinGlass, and ether saw $210 million.
Crypto-linked stocks suffered deeper losses. Coinbase led the way, down 15% following its disappointing second-quarter earnings report. Circle fell 4%, Galaxy Digital lost 2%, and ether treasury company Bitmine Immersion was down 8%. Bitcoin proxy MicroStrategy was down by 5%.
Bitcoin falls below $115,000
The stock moves came amid a new wave of risk off sentiment after President Trump issued new tariffs ranging between 10% and 41%, triggering worries about increasing inflation and the Federal Reserve’s ability to cut interest rates. In periods of broad based derisking, crypto tends to get hit as investors pull out of the most speculative and volatile assets. Technical resilience and institutional demand for bitcoin and ether are helping support their prices.
“After running red hot in July, this is a healthy strategic cooldown. Markets aren’t reacting to a crisis, they’re responding to the lack of one,” said Ben Kurland, CEO at crypto research platform DYOR. “With no new macro catalyst on the horizon, capital is rotating out of speculative assets and into safer ground … it’s a calculated pause.”
Crypto is coming off a winning month but could soon hit the brakes amid the new macro uncertainty, and in a month usually characterized by lower trading volumes and increased volatility. Bitcoin gained 8% in July, according to Coin Metrics, while ether surged more than 49%.
Ether ETFs saw more than $5 billion in inflows in July alone (with just a single day of outflows of $1.8 million on July 2), bringing it’s total cumulative inflows to $9.64 to date. Bitcoin ETFs saw $114 million in outflows in the final trading session of July, bringing its monthly inflows to about $6 billion out of a cumulative $55 billion.
Google CEO Sundar Pichai gestures to the crowd during Google’s annual I/O developers conference in Mountain View, California, on May 20, 2025.
David Paul Morris | Bloomberg | Getty Images
Google has purged more than 50 organizations related to diversity, equity and inclusion, or DEI, from a list of organizations that the tech company provides funding to, according to a new report.
The company has removed a total of 214 groups from its funding list while adding 101, according to a new report from tech watchdog organization The Tech Transparency Project. The watchdog group cites the most recent public list of organizations that receive the most substantial contributions from Google’s U.S. Government Affairs and Public Policy team.
The largest category of purged groups were DEI-related, with a total of 58 groups removed from Google’s funding list, TTP found. The dropped groups had mission statements that included the words “diversity, “equity,” “inclusion,” or “race,” “activism,” and “women.” Those are also terms the Trump administration officials have reportedly told federal agencies to limit or avoid.
In response to the report, Google spokesperson José Castañeda told CNBC that the list reflects contributions made in 2024 and that it does not reflect all contributions made by other teams within the company.
“We contribute to hundreds of groups from across the political spectrum that advocate for pro-innovation policies, and those groups change from year to year based on where our contributions will have the most impact,” Castañeda said in an email.
Organizations that were removed from Google’s list include the African American Community Service Agency, which seeks to “empower all Black and historically excluded communities”; the Latino Leadership Alliance, which is dedicated to “race equity affecting the Latino community”; and Enroot, which creates out-of-school experiences for immigrant kids.
The organization funding purge is the latest to come as Google began backtracking some of its commitments to DEI over the last couple of years. That pull back came due to cost cutting to prioritize investments into artificial intelligence technology as well as the changing political and legal landscape amid increasing national anti-DEI policies.
Over the past decade, Silicon Valley and other industries used DEI programs to root out bias in hiring, promote fairness in the workplace and advance the careers of women and people of color — demographics that have historically been overlooked in the workplace.
However, the U.S. Supreme Court’s 2023 decision to end affirmative action at colleges led to additional backlash against DEI programs in conservative circles.
President Donald Trump signed an executive order upon taking office in January to end the government’s DEI programs and directed federal agencies to combat what the administration considers “illegal” private-sector DEI mandates, policies and programs. Shortly after, Google’s Chief People Officer Fiona Cicconi told employees that the company would end DEI-related hiring “aspirational goals” due to new federal requirements and Google’s categorization as a federal contractor.
Despite DEI becoming such a divisive term, many companies are continuing the work but using different language or rolling the efforts under less-charged terminology, like “learning” or “hiring.”
Even Google CEO Sundar Pichai maintained the importance diversity plays in its workforce at an all-hands meeting in March.
“We’re a global company, we have users around the world, and we think the best way to serve them well is by having a workforce that represents that diversity,” Pichai said at the time.
One of the groups dropped from Google’s contributions list is the National Network to End Domestic Violence, which provides training, assistance, and public awareness campaigns on the issue of violence against women, the TTP report found. The group had been on Google’s list of funded organizations for at least nine years and continues to name the company as one of its corporate partners.
Google said it still gave $75,000 to the National Network to End Domestic Violence in 2024 but did not say why the group was removed from the public contributions list.
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