Half a dozen Indian tech startups draw up plans to tap public markets in two years

Photo: Reuters

At least half-a-dozen tech startups, including unicorns such as FreshworksOla and Oyo, are looking at going public in the next couple of years, according to four people aware of the development.

The development comes amid some of the world’s top tech startups—including ride-hailing companies Uber and Lyft—experiencing disappointing debuts on stock exchanges, followed by WeWork’s decision to withdraw its IPO. Indian startups are, however, confident of pulling off successful public offerings.

The botched WeWork IPO and the underwhelming investor response to Uber and Lyft’s share sales have sowed doubts among investors about the lofty valuations assigned to these startups and could potentially threaten the IPO prospects of their Indian counterparts.

Some say Indian startups declaring their intention to go public has more to do with their investors seeking exits.

“There is going to be a spate of IPOs starting two years from now. Globally, capital is slowly starting to dry up—as that changes, entrepreneurs will realize that it is important to opt for an IPO even as a source of funding,” said Niren Shah, managing director at Norwest Venture Partners, India. “Moreover, venture capitalists are seeking exits which don’t come that easily through a merger and acquisition, which is why IPOs would become a way for investors to exit.”

As unit economics improve and Indian startups become profitable, more and more of them would turn to public markets for funding, he added.

For instance, furniture seller Pepperfry expects to file for an IPO in the next 15 months, co-founder Ambareesh Murty said. This, he said, is possible because Pepperfry has a “differentiated business with high margins”.

“We are a high-growth company with high margins and expect to get profitable over the next 12 months or so,” said Murty. “We will have a compelling proposition for the public markets.”

Cab hailing firm Ola recently raised 35.9 crore in funding from investment fund ARK Ola Pre-IPO Private Investment Trust. Ola, which has kept its bigger investor SoftBank at bay and has been raising tranches of funds from other investors, could be looking at an IPO as a source of funding.

Mint recently reported that SoftBank-backed Oyo is also looking to go public in the next three years. However, the firm that’s perhaps closest to getting listed is Chennai-based software product firm Freshworks, which will start preparing for an IPO in the US before the end of 2019, as reported by Mint.

The article was first reported on Livemint.com 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.