The fall of WeWork was a jolt to venture capital—how that could change VC investing

on January 22, 2020

When news broke in September that SoftBank-backed WeWork was pulling its doomed IPO, a chill ran across the capital markets.

Mere days before, entertainment and talent agency Endeavor had also pulled its IPO. In December, following disappointing growth, SoftBank sold back its nearly 50% stake in late-stage dog-walking startup Wag Labs to the company. And according to reports, pizza startup Zume was in talks with SoftBank to raise another funding round in late 2019, but the deal fell apart in December (the company subsequently laid off hundreds of workers in January).

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New stocks are red hot to start 2020 with IPO ETF tripling the return of the market

on January 22, 2020

IPO watchers expect the 2020 market to be front-half loaded due to a big second-half event: the presidential elections.

“In an election year, IPO issuance is traditionally strong in the first two quarters, slow in the third quarter, then picks up in the end of the fourth quarter,” said Santosh Rao, head of research at Manhattan Venture Research.

“My best guess is the biggest names will try to come out well before the election,” he said.

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Hedge fund puts $550m into technology stock option financing

on January 14, 2020

Privately held start-ups have typically not been keen to see employees enter contracts backed by their shares and options. But Andrea Walne, a partner at Manhattan Venture Partners, said with more than a dozen groups now offering financing tied to start-up stocks and options, she hoped a marketplace would develop.  “Companies have been leaning far too much on their inability to provide financial and tax advice as a cop out to supporting employees with their stock options,” Mrs Walne said.

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Phase I of Sino-US Trade trade pact a done deal, Phase II likely after the elections: Santosh Rao

on January 13, 2020

Santosh Rao of Manhattan Venture Partners, says both China and the US need the trade deal and it will be a step in the right direction for the global economy. In an interview with ETNOW, he said nothing can derail the US markets in 2020 unless a huge macro event takes place.

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What does the ‘WeWork effect’ mean for IPOs in 2020?

on December 31, 2019

Stripe surpassed Airbnb as the most valuable private company in 2019 thanks to a valuation of $35 billion as of a September 2019 funding round. The company sits in the hot intersection of payments and software, working with companies such as Lyft, Uber and Glossier on payment processing, payouts to contractors and card issuing. E-commerce sales are picking up, and Stripe “does the back end for those kinds of businesses,” riding the rising tide of the online economy, said Santosh Rao, head of research and a partner at Manhattan Venture Partners.

The company has been expanding geographically and adding new enterprise capabilities as it goes up against companies such as PayPal Holdings Inc. PYPL, -0.31% , Square Inc. SQ, +1.20% and Adyen NV ADYEN, +0.00% . Though co-founder John Collison told CNBC earlier this year that the company had “no plans” for an immediate IPO, the company still cracks Rao’s short list. A Stripe spokesman reiterated in an email that there are “no plans” for the company to go public.

There are two other fintech names on Rao’s list: Klarna, which powers installment-payment options and nabbed a $1.4 billion valuation on the private market back in 2014, and Toast, which makes payments products for restaurants and fetched a $2.7 billion private valuation in early 2019.

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Uber and other unicorns flopped on Wall Street this year. Will IPOs rebound in 2020?

on December 16, 2019

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Several unicorns flopped in 2019, will IPOs rebound next year?

on December 16, 2019

Stakeholders are also confident that Postmates, a food delivery company and mattress seller Casper are in an excellent position to hit the ground running if they make it to Wall Street.

“2020 could be a good year for the IPO market. There is a tremendous pipeline. IPOs are not broken, but the bar has changed. Before there was no bar. Investors are now more demanding and want sustainable business models,” Santosh Rao, head of research at Manhattan Venture Partners, told CNN in an interview.

According to Rao, the stocks of Airbnb and Postmates are likely to maintain a bullish position, if they go public in 2020. DoorDash, a close rival of Postmates is also on Mr Rao’s radar as he remains confident that it will also be one of the listings to look out for in the coming year.

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Snap Inc. Shares Close Up 44% In Stock Market Debut

on December 16, 2019

Alibaba raised $21.8 billion in its initial offering, but that total rose to $25 billion after underwriters also sold the so-called green shoe, extra shares companies make available at IPO time. Snap offered its underwriters the option to purchase up to an additional 30 million shares in its green shoe, and will disclose at a later date if they were sold.

Despite the share pop, Santosh Rao, head of research at Manhattan Venture Partners, said the sentiment from investors has been largely negative due to Snap’s expensive valuation compared with its revenue. The app launched in 2011, but generated no revenue until 2015. While advertising efforts have ramped up since, with total revenue reaching $404.5 million in 2016, .

Still, Snapchat is the first major venture-backed technology IPO of 2017, after the number of such offerings plummeted in 2016, and investors wanted to get in on it, he said.

“I think people just want to get in and say, ‘Hey, what’s the worst that can happen?,’” Rao said.

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In the months following listings, the stocks of leading companies languished

on December 13, 2019

In the absence of easy access to state markets, however, some companies are debating whether to revert for fresh financing to private market investors because many risk capital and private equity investors are looking for deals.

Rashaun Williams, the general partner of the All-Star Fund at Manhattan Venture Partners, said that the private sector market currently receives trillions of dollars in dry powder to further support private companies.

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Uber, other unicorns flopped on Wall Street

on December 13, 2019

Investors are also betting that food delivery service Postmates, trading app Robinhood and mattress seller Casper could make waves if they debut on Wall Street.

“2020 could be a good year for the IPO market. There is a tremendous pipeline. IPOs are not broken but the bar has changed. Before there was no bar,” said Santosh Rao, head of research at Manhattan Venture Partners, in an interview with CNN Business.

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