We looked at the size (revenue) and revenue growth of 154 tech companies prior to going public to see how fast you need to grow prior to IPO. Data is below.
SaaS. Software companies posted median revenue of $105mm in the year prior to going public with 55% median growth. The range of growth was wide: the minimum level of growth was 6% by Survey Monkey, while the highest growth rate was Horton Works at 587%. The median level of revenue needed to go public has increased over time. For companies that filed their S1 in 2019, and 2018, median revenue levels each year were $169mm and $193mm. The bar to go public/exit has risen.
Social Media. Social media companies had median revenue of $361mm with 151% revenue growth prior to IPO. Facebook was the outlier with $1.9bln of revenue.
Marketplaces. Marketplaces had $196mm of revenue on median and 51% revenue growth.
E-commerce. On median these businesses had $282mm of revenue prior to going public with growth of 70%. It’s pretty incredible to think that Amazon went public with only $16mm of revenue, but that was actually a lot of revenue for a new tech company in the 90’s. Chewy alternatively had $3.5bln revenue at the time it went public earlier this year.
The themes: despite high revenue, growth needs to be quite high, and the amount of revenue needed to go public has increased dramatically over the past two decades.
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