The venture-capital offices around Silicon Valley remain largely empty, but their coffers will soon be brimming after what has shaped up to be a surprisingly resilient year for technology startups.
The initial public offerings this week of DoorDash Inc. and Airbnb Inc. cap a string of listings that have helped make this the most lucrative year on record for IPOs in terms of money raised. More than $157 billion has been raised as of Thursday, according to data provider Dealogic—over a third of that in the past 11 weeks—and the number of listings is the largest since the final hurrah of the dot-com boom in 2000.
The soaring public offerings are showering returns on some of the biggest names in tech investing, in particular Sequoia Capital, which backed both DoorDash and Airbnb as well as cloud-computing company Snowflake Inc. and videogame company Unity Software Inc., all of which ranked among the year’s 15 biggest listings, according to Dealogic. The outcome is a far cry from the warning Sequoia sent to its founders and CEOs in March urging them to prepare for turbulence and disruption because of the pandemic.
The startup bonanza hardly seemed certain earlier in the year, as the coronavirus pandemic gripped the country, laying waste to millions of jobs and entire industries, and venture firms braced for depressed valuations and startup failures. Instead, the technology industry went on a tear as services like food delivery and collaboration software became more valuable in the remote-work era.
Startups that had long sought the relative shelter of the private markets are now trading at valuations unthinkable early in the year. Airbnb and DoorDash both priced their IPOs well above their initial guidance and their stock jumped from there.
