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The IPO Drought 🥵

The IPO Drought 🥵
June 29, 2022

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As a California native, I know a thing or two about drought. Billboards dot the highways reminding us “Severe Drought–Conserve Water!” Consumers consider drought tolerance tags on plants when browsing Home Depot’s garden aisles. In stark contrast to the "it's raining riches" VC investing and IPO storms of 2021, private companies are taking a lesson from drought-familiar territories: conserve, conserve, conserve.

Consider a recent Bloomberg article:
“Companies have raised a combined $4.9BN via US initial public offerings this year, or less than 6% of the record sum raised in the first half of 2021…While 2021’s volume was a historical outlier, this year’s paltry total distantly trails the $47BN five-year average for the period.”

In graphic terms: 

Fall Forecast
Instacart famously put its IPO on hold and dropped its market valuation from $39BN to $24BN. The company will pause an initial public offering until the markets stabilize, a phenomenon which isn’t expected before September. Other companies delaying their debuts include social media giants Reddit and Discord, as well as payments platform Stripe.

Profit over Public
Turns out, when recession talk is in the air, profit becomes the North Star in business. It sounds almost too simple to be said, but after the bloated investment landscape of 2021, successful private companies are relying on profits rather than VC valuations and funding.

Food, Booze, and Dying
Recession-proof industries include grocers like Giant Eagle, a profitable company in 2021 despite supply chain woes. In good economic times and bad, alcohol sales continue, as evidenced by Rhinegeist Brewery’s financials. Legacy Funeral Group is one example of an industry that tends to survive economic recessions.

A dangerous shortage
War and weather threaten global food supply.
[WSJ]
The Battery King
Who is behind the largest supply of EV batteries?
[Wired Magazine]

 
Since last week, PrivCo has added:
2,006 Companies | 238 Funding Activities | 165 M&A Deals

Funding & Deal Highlights:


PicnicHealth raises $60MM from B Capital

Digital Health • Round C • Oakland, CA
 

Housecall raises $125MM from Permira 

SaaS • Equity • Denver, CO
 

Centerline Biomedical raises $33MM from Cleveland

Medical Devices • Round B • Cleveland,OH
 

Eneva raises $800MM from Banco Itau

Oil & Gas • Equity • Rio de Janeiro, Brazil
 

ShopBack raises $80MM from Asia Partners Fund

Fintech • Round F • Singapore City, Singapore
 

BioLumic raises $13.5MM from OurCrowd

Biotechnology • Round B • New York, NY
 

August Health raises $15MM from Matrix 

Digital Health • Round A • San Francisco, CA
 

Magnetic Insight raises $17MM from Celesta

Healthcare • Round B • Alameda, CA
 

Pocus raises $23MM from Coatue 

Software • Round A • San Francisco, CA
 

ConductorOne raises $15MM from Accel

Automation • Round A • Portland, OR
 

US Direct E-Commerce acquires Scalefast

Cloud • Acquisition • El Segundo, CA
 

GoGuardian acquires TutorMe

EdTech • Acquisition • Los Angeles, CA 

 

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