Company uses the IPO route to scale their business higher and raise assets from the market to support the same. But for the investors it is an opportunity to put resources into a business that may have growth opportunities in future.
Startups who took the IPO route and their current status:
- Barbeque Nation: One of India’s fastest growing restaurant brands launched its IPO on March 24, 2021 and raised Rs 453 crore from its Initial Public Offering (IPO). The company plans to use the proceeds from the IPO to fund capital expenditure with respect to expansion and opening of new restaurants. In FY21, the firm increased its focus on the delivery vertical amidst the second wave of pandemic by launching products like Barbeque-in-a-box and giving the buffet feeling at home. The firm has raised sufficient funds and plans to open up 20 more outlets in this fiscal year.
- Poshmark: A social commerce marketplace for selling and buying of clothing, shoes and accessories reached a valuation of $3.5 billion with its IPO which was launched on January 14, 2021. The firm collaborated with Snapchat to introduce the resell platform to the Gen Z consumers. The company is also initiating a search for a new CFO as the present one, Anan Kahyap is departing soon.
- Bumble: An online dating app turning the traditional dating norms upside down by making it women centric. It launched its IPO on February 11, 2021 and raised $2.2 billion and took the total valuation of the firm to $7 billion. The firm didn’t roll out as expected after its IPO but the market looks promising with the vaccination drive at process and also with their new launches like pandemic-friendly features and BFF features, it’s still a big deal.
The major objective of an IPO is to raise capital for the business which can change the growth trajectory of the company.
- Coursera: The online education company listed its IPO amidst Coronavirus pandemic on March 31, 2021 raised about $520 million and valuing the company at $4.3 billion. It has announced that 16 new universities across Europe, Africa and the Middle East have embraced its initiative of Coursera for Campus. It has also come up with new courses regarding in-demand cloud skills to increase its consumer base.
- Burger King: A fast growing restaurant chain in India raised Rs 810 crore through its IPO that was launched on December 2, 2020. The company plans to use the proceeds for debt repayment and expansion. The company which operated 270 restaurants including sub-franchisees until December 2020 plans to open about 50 more restaurant chains in FY 21-22.
- IndiaMART: An online B2B marketplace to deal with business products and services connecting buyers and sellers at one platform, hit Dalal Street with its Rs 475 crore Initial Public Offer (IPO). The company is planning to upgrade existing technologies and support systems alongside retention and monetization. It also intends to invest in mobile platforms and attract large suppliers and leading brands alongside growing core SME segment supplier base.
How and when to go for the IPO?
There’s no benchmark for how and when a startup should go public. It is something that is decided by a company’s growth and potential and not by the size or time. The major objective of an IPO is to raise capital for the business which can change the growth trajectory of the company. While an IPO is a worthy objective with many potential benefits, there are many disadvantages as well. It is advisable to weigh the pros and cons, be patient and consider all your alternatives before going public.