Fast-casual Mediterranean chain Cava, celebrating its public debut, handed out spicy falafel outside the New York Stock Exchange earlier today. Investors must like feta. The company’s stock finished the day up 99% from its initial public offering selling price. That’s a positive sign for the dormant IPO market, no doubt. But those venture capital investors seeking to sell their shares in hot startups might still have to wait, possibly until next spring. Despite Cava’s success, 2023 is looking to be another dead zone for tech IPOs.
At the start of this year, bankers and investors identified four VC-backed names that could open up the IPO market: Instacart, Reddit, Databricks and Stripe. None of those companies appears to be racing to the IPO market, despite the fact that the stock market is roaring and big tech stocks are back. Instacart’s growth slowed to a halt in the first quarter, I reported this month. Reddit is facing a firestorm from its users. Databricks’ CEO this week said it was important for the enterprise software firm to stay private while it invests in artificial intelligence. And Stripe raised $7 billion privately to resolve employees’ stock compensation issues and allow it to remain private for a good while longer.
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