These unicorns didn’t take the IPO route
These 10 Bay Area unicorns chose to sell, instead of IPO, in the past 3 years
When SignalFx Inc. agreed to be acquired by Splunk Inc. last week for slightly more than $1 billion, it took the road less traveled by Bay Area unicorns.
Only 10 venture-backed businesses from the region that are valued at $1 billion or more opted to accept a buyout offer rather than take their chances on Wall Street as a public company.
Two of them, San Francisco-based AppDynamics Inc. and Palo Alto-based Adaptive Insights Inc., were acquired shortly before the planned IPOs they had announced.
There have been 15 already this year who went the other way, exiting their startup stage through IPOs.
While more than 80 percent of venture-backed companies exit via an M&A deal rather than a Wall Street debut, most of those sales happen when they are in the seed, Series A or Series B stages — well before most get a valuation of $1 billion or more.
By the time they get to a $1 billion-plus valuation, their lofty ambitions and potential price tags may hinder productive acquisition talks.
There is no guarantee, though, that they will get a higher price after going public. The stocks of half of last year’s Bay Area IPO companies is trading below the price they went public, as are two of this year’s most highly valued companies — Uber Technologies Inc. (down 26 percent) and Lyft Inc. (down 29 percent).
The photo gallery that accompanies this story shows the 10 most recent unicorns from the region who sold out rather than go public.