The New IPO Frenzy

The New IPO Frenzy

Written by: Jack Lau

Guilty.  Yes, indeed, guilty.  Kept bumping into friends over past months (felt like centuries) complaining that we have been too lazy.  No writeup, nothing!    And, we are  not that active on social media either (with the exception of hitting the LIKE button occasionally), friends are right to assume that either this has been an inexplicable writer’s blog, or that this guy is probably having too much fun on the golf course.

Well, the truth is that, frankly, there are too many  things happening.  And, it is really an exciting time for technology folks.

But, being half-Shanghaineses, it is probably a crime to pay for a web hosting service and not using it at all.  Surely, the value-for-money mantra that is so inscribed somewhere on our skulls, they are calling our innermost conscious.  Write something!

So, let’s begin.

Pinterest, Lyft and Uber

One of the most interesting forthcoming events in the tech space is the pending IPO of a few super Unicorns.  As we wrote, Lyft has already gone public with a valuation of US $24 Billion, raising more than US $2 Billion.  If you add the nearly US $5 Billion it has raised in 18 rounds before, then Lyft has captured the imagination of investors to the tune of US$7 Billion.

Right after Lyft, it is wildly expected that Uber, the larger rival of Lyft, would go public and then there will also be Pinterest (I use Pinterest personally).

Just for fun, we have put some of the interesting numbers of these three super unicorns side by side.

For readers who have been following our blog, you would have noticed that we often said (or implied) that we are pretty old fashioned.  Look at the tremendous amount these super unicorns have raised thus far.  And, almost all of them are still losing money — or barely breaking even.  This is a new world.  And, history will tell.

But, to be fair, back when Facebook went IPO in 2012, people were trying hard to comprehend too.   Back then, the shares were so hot that they allowed more shares to be subscribed, pushing the valuation to over US$100 Billion.  However, if we are not mistaken, Facebook was nearly profitable or breaking even.  In Q4, 2012, Facebook reported a revenue of $1.58 Billion in revenue with a net income of $64 million.

In 2004, Google went public with a then unthinkable valuation of $23 Billion — but, with a Price-Earning Ratio of 80.  So, Google was profitable back then already for sure.  It went public only after being founded 6 years earlier.

So, folks, 15 years apart, today’s Lyft (Year 2019) has a valuation that of Google (Year 2004).   Exciting world, isn’t it?

And, as a closing, please don’t forget to root for our own local heroes. Here we just highlight two to showcase.  One is a cool company called Qupital. https://www.qupital.com/ . It does Small and Medium Enterprise invoice financing.  And, thus far, it has processed US$250 Million loan already.  Congratulations.  This is a completely local Hong Kong story.

Another interesting company is called Klook ( www.klook.com). If you travel, you can get discounted tickets to theme park, nice airport limo pickups etc.  Founded in 2014 by some local Hong Kong folks, it has raised US$300 Million thus far and is going strong . Good for them.


Most of the numbers above are sourced through Crunchbase, Wikipedia, WSJ, Reuters, Forbes, and other sources.