Explore the dramatic shift in IPO revenue expectations over the last decade. Companies now need at least $500 million in revenue to even consider going public. Delve into the evolution of successful IPOs from the SaaS boom to high-profile deals like Coinbase and Airbnb. Discover the implications of the recent market freeze and look ahead to potential IPO candidates in 2025, including Stripe and Databricks. It's a new landscape, and the stakes have never been higher!
The revenue threshold for IPOs has risen significantly from $100 million in the 2010s to $500 million by 2024.
The IPO market experienced a slowdown in 2022-2023, but signs of recovery began in 2024 with companies approaching $1 billion in revenue.
Deep dives
The Evolution of IPO Revenue Requirements
The revenue threshold required to go public has significantly increased over the past decade, reflecting changed investor expectations. In the early 2010s, companies with revenues as low as $100 million, such as RingCentral and Etsy, could successfully complete an IPO, drawing on early industry advantages. However, by the late 2010s, the landscape shifted dramatically, with companies like DoorDash and Airbnb going public with revenues exceeding $2 billion. As of 2024, the bar has been raised even higher, with successful IPO candidates now expected to have revenues closer to $500 million, indicating a distinctly different market environment.
Impact of Economic Conditions on IPO Trends
The IPO market experienced a dramatic slowdown in 2022 and 2023 due to rising interest rates and a decline in growth stock valuations. Many companies that could have gone public refrained from doing so, concerned about potential valuations and market conditions, leading to a notable lack of major IPOs during this period. However, indications of recovery began in 2024, with several companies nearing or exceeding $1 billion in revenue preparing for public offerings, signaling a renewed momentum for the market. The landscape now favors companies that demonstrate substantial growth and established market positions, which are critical for a successful IPO.
The IPO bar has risen—big time. In the 2010s, companies like RingCentral and Etsy went public with $100M-$250M in revenue. But today? You likely need $500M+ just to get a shot.
We’ll break down how IPOs evolved from the SaaS boom to the 2021 mega-deals (think Coinbase, Snowflake, and Airbnb), the 2022-23 freeze, and why 2024’s IPO class—Reddit, Klaviyo, Instacart—looks different.
Plus, we’ll preview 2025’s biggest potential IPOs, including Stripe, Databricks, and Deel. What’s the new rule? If you want to IPO, bring half a billion in revenue—or a damn good reason why you deserve to be public.