These were relatively quiet years for public debuts.
Initial public offerings (IPOs) have plummeted since the record-breaking 2021, when companies like Roblox, UiPath and Rivian went public.
Rising interest rates and a collapse in venture capital funding that slowed activity at late-stage startups haven't helped the market.
But two years later, cautious optimism is growing. While IPO volume fell 7% in the opening quarter of 2024, revenue from those IPOs rose 7% to $23.7 billion, according to EY.
In addition, there has already been a high-profile entry this year with the social media giant Reddit. This was followed by listings from companies such as Instacart and Klaviyo as well as chip designer Arm at the end of last year.
Although these listings did not result in a blockbuster exit effect as expected, companies like Arm have done well post-IPO as shares rose amid rising demand for semiconductor chips.
Given the large backlog of startups waiting for the right opportunity to exit, it seems like momentum is picking up again.
BI examined PitchBook data on which startups could go public this year. PitchBook uses a proprietary method called Exit Predictor to calculate the likelihood of companies going public. Machine learning and a database with information about startup financing, investors and references are used to estimate how likely an exit is.
The main component that decides the probability of a startup exit is PitchBook's classification model. These probabilities are used to calculate “a naive expected return on an investment in the startup's next funding round, using historical returns by series derived from cap table data,” according to PitchBook's methodology document.
PitchBook normalizes these expected returns using a percentile scale; This means that the final probability of an IPO is determined as a number between zero and 100, with the latter representing the most “attractive” option for a startup to go public.
According to PitchBook analysts, BI has narrowed down the startups with over a 90% chance of going public. Here are the candidates.
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