Last Monday will go down in the books as a historic day for unicorn liquidity, as company after company dropped their IPO filings onto the internet for the world to read. It was great.
But this week is still managing a good grip of IPO news, with Wish announcing yesterday that it has filed privately to go public, and Bumble talking to bankers about a possible 2021 debut at a valuation of $6 to $8 billion, according to Bloomberg.
If you are tired of IPO news, it’s going to be a tough few quarters — I doubt that we are done seeing tech and otherwise venture-backed companies file and go public in the United States. We’re going to be busy.
Let’s start with Wish as it is closer to getting out the door by a few quarters.
Wish is a well-funded e-commerce company that has raised around $1.4 billion, according to Crunchbase data. It most recently raised $300 million in a Series H that valued it at around $11.2 billion last August.
Those are big numbers. Behind them, it appears, has been a history of quick revenue growth. According to Forbes, Wish generated $1.9 billion in 2019, double what it brought in the year before. Wish, the same article notes, takes a cut of purchases, so the number we’re discussing is not gross merchandise value, but net revenue.
Given the global shift towards e-commerce in 2020, Wish could be enjoying another year of growth, easily pushing its annual revenue run rate into the $2 billion range. eBay has a price/sales ratio of around 4x, but with Wish growing much more quickly, it can likely surpass that figure. So, you can eyeball the math and see that Wish will likely be able to defend its final private valuation, provided that its losses aren’t too steep.