Q4 prediction

We have yet another IPO with Klaviyo listing yesterday and having a solid exit. That makes two VC backed tech IPOs this week and the IPO window is officially open.

There is a huge backlog of companies looking to go public and I expect a handful of these companies to follow Klaviyo and Instacart given the relative success.

I previously had thought that we’d see less than 5 VC backed IPOs in 2023, but I’d likely take the over at this point given where we stand. Of course that can all change very quickly.

I also think expectations need to be tempered. While Klaviyo and Instacart getting to an IPO is impressive nonetheless, it would be remiss not to mention that they both are still trading at discounts to their last private round. I expect most of the companies that go public to go at much more modest valuations and likely below their last private round if they raised in 2021.

I also expect secondary market activity to pick up quite a bit going into Q4. Investors are now hunting for pre-IPO stock and there is a huge need for liquidity.