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<ul><li>Even with the failures of <keyword id="8143915" type="UNKNOWN" weightage="20" keywordseo="uber-and-wework">Uber and WeWork</keyword> in the US market, Indian startups are optimistic about their public offer. </li><li>Here’s a list of India’s most prominent startups which could soon head for an IPO. </li><li>Recently, startups like Ola, Lenskart and Policybazaar had appealed to SEBI to make the rules easier for a startup listing.</li></ul>Startups might be looking at new avenues to raise money. And, thanks to their popularity with consumers, it is possible for them to raise it from the public. As the IPO fever has gripped the US markets, Indian founders are watching their performance closely. In spite of tepid response that Uber received and WeWork’s debacle, Indian startups are stubbornly working towards taking their companies public. However, to get funds en masse, companies should be able to show profits. And few startups would qualify. This too is not discouraging startup founders who are confident that their business model will find takers. Recently, <a href="https://inc42.com/buzz/ola-lenskart-and-policybazaar-demand-change-ipo-listing-sebi-guidelines/">startups </a>like Ola, Lenskart and Policybazaar appealed to market regulator SEBI to relax rules for startups to list. Here are the startups who could be making their market debut soon. Uber’s answer: Ola The homegrown ride hailing unicorn has set off strong rumours of an imminent <a href="https://inc42.com/buzz/ipo-is-mobility-unicorn-ola-gearing-up-for-public-listing/">IPO</a> as it has raised fresh funding of ₹35.88 crores from ARK Ola pre-IPO Fund. The fund is based out of Seoul and <a href="https://entrackr.com/2019/09/exclusive-ola-set-up-pre-ipo-trust-public-listing-2-years/">reports</a> say it was formed to aid its IPO plans. The Bhavish Aggarwal-led company has been actively entering new markets across the world, and had also recently set up a technology hub in the Bay Area. Oyo’s fast paced growth and a possible market listing Another company that has been reported to be eyeing an IPO, while also through a fast paced expansion process. Oyo Hotels &amp; Homes is entering new markets or hitting new milestones in a current markets. And reports say, all of its achievements could be leading up to a large IPO that it is planning. A <a href="https://www.livemint.com/companies/start-ups/oyo-s-preparing-to-list-in-next-2-3-years-eyes-up-to-18-billion-valuation-1562609045816.html">Mint</a> report says that the company is looking at a $18 billion valuation and an IPO in 2-3 years. Vijay Shekhar Sharma can’t be far behind Vijay Shekhar Sharma’s PayTm is one of India’s prized payment gateway innovation. At a recent <a href="https://www.hindustantimes.com/business-news/ht-mintasia-leadership-summit-paytm-to-start-planning-ipo-in-22-24-months-says-ceo-vijay-shekhar-sharma/story-67K1gh0yeRbK6Mkd7IfXWK.html">summit</a>, Sharma said that the company will start preparing for an IPO in the next two years. In the financial year 2018-19, Paytm had clocked in a gross transaction value of $50 billion through 5.5 billion transactions. It has also set a target of 12 billion transactions by FY20. <keyword id="143842" type="COMPANY" weightage="20" keywordseo="Mobikwik">Mobikwik</keyword>’s desire to be the first payments company to be listed Paytm’s competitor Mobikwik is not too far behind. In July, its payment gateway business has turned profitable. “We will march forward towards an IPO in 2023-24. We will aspire to become the first Indian fintech and first Indian payments - company to get listed in India,” the company earlier told <a href="https://www.businessinsider.in/mobikwik-aims-to-become-the-first-payments-startup-to-go-for-an-ipo/articleshow/70987513.cms">Business Insider India</a>. Mobikwik’s revenues in FY 2019 was 3.5 times higher than those in previous year, at ₹18.4 billion. After all the troubles, Urban Ladder wants profitability and an IPO Online furniture retailer Urban Ladder has been eyeing an IPO for long now. It has said that it is confident of going ahead with it in the next two years. Urban Ladder is in an expansion mode, and as it hopes to turn profitable by the end of 2019. Urban Ladder underwent an organizational restructuring earlier this year, and had to let go off 90 employees. Some of its marquee investors include Ratan Tata, Sequoia India, Steadview Capital, SAIF Partners, and Kalaari Capital. Talking of furniture, Pepperfry is in too! Another furniture retailer, Pepperfry too is closing in on its IPO plans. In an interview with <a href="https://qz.com/india/1714225/pepperfry-indian-furniture-e-commerce-firm-eyes-profits-ipo/">Quartz</a>, Ashish Shah, co-founder of Pepperfry said that they are planning an IPO in one and a half years. Pepperfry has been scaling up its businesses and is also looking at achieving its $1 billion GMV <a href="https://www.moneycontrol.com/news/business/companies/pepperfry-targets-gross-merchandise-value-of-1-billion-by-2021-3754081.html">target</a> by 2021. With over 6 million customers, Pepperfry has 39 offline studios across 22 cities in India. It is also on an expansion mode.

These marquee Indian startups could be lining up for some big-bang IPOs

<ul class="summary-list"><li>Diabetes startup Omada Health has confidentially filed its S-1 for an IPO, BI has learned.</li><li>It's among a crop of hot startups patiently waiting for the markets to reopen for healthcare IPOs.</li></ul>Rumors about diabetes startup Omada Health's public market debut have been <a target="_blank" class="" href="https://www.businessinsider.com/healthcare-startups-ipo-public-markets-reopens-2024-1">swirling</a> for years. Now, its IPO may finally be within reach.Omada Health confidentially filed its S-1 this summer to go public, according to one person with knowledge of the transaction.It's been a long time coming for Omada, which was founded in 2011 to treat diabetes and other chronic conditions with a combination of virtual coaching and remote monitoring.Omada last raised a <a target="_blank" class="" href="https://www.businessinsider.com/omada-health-pitch-deck-raise-192-million-2022-7">$192 million Series E</a> in 2022, which boosted its valuation <a target="_blank" class="" href="https://www.fiercehealthcare.com/health-tech/omada-health-hits-unicorn-status-192m-fidelity-led-series-e">over $1 billion</a>. It's raised about $450 million to date, according to PitchBook.An Omada Health spokesperson said the company "can't comment on rumors or speculation at this time."Omada CEO Sean Duffy has never spoken publicly about the startup's IPO plans. But Omada could be one of the select healthcare startups to test the IPO waters when the markets warm up, hopefully in 2025.Hinge Health has hired banks including Morgan Stanley as <a target="_blank" class="" href="https://www.businessinsider.com/hinge-health-s-1-morgan-stanley-ipo-2024-9">the physical therapy startup prepares to confidentially file its S-1</a>, BI previously reported. Hinge is aiming for an IPO in early 2025, markets willing.BI previously reported that Omada Health and Hinge Health were among <a target="_blank" class="" href="https://www.businessinsider.com/healthcare-startups-ipo-public-markets-reopens-2024-1">the top contenders to test the healthcare IPO waters</a>, alongside startups like Lyra Health and Datavant.It's been a rough couple of years for healthcare IPOs. After 20 healthcare startups went public in 2021, only one healthcare company went public the following year — Akili Interactive, which <a target="_blank" class="" href="https://finance.yahoo.com/news/virtual-therapeutics-announces-results-tender-111900807.html">sold for $34 million</a> this July. No healthcare startups went public in 2023.2024's IPO market has remained rocky. Three digital health companies have gone public this year: revenue cycle management company Waystar, remote pregnancy monitoring company Nuvo, and precision medicine company Tempus AI. Both Waystar's and Tempus's stock have surged about 30% since their public market debuts, as of October 1. Nuvo, which went public in a SPAC deal in May, <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-08-22/newly-public-pregnancy-care-firm-nuvo-files-for-bankruptcy">filed for bankruptcy in August</a>.Cameron Lester, global co-head of technology, media, and telecom investment banking at Jefferies, told Business Insider in August that <a target="_blank" class="" href="https://www.businessinsider.com/servicetitan-waiting-until-after-the-election-to-go-public-2024-8">many companies are now waiting until 2025</a>, after the US presidential election has concluded, to consider an IPO. He said the firm expects "a strong 2025 with lots of companies getting ready to go public."Ben Narasin, founder and general partner at Tenacity Venture Capital and an early investor in Omada Health, told BI he believes the first quarter of 2024 "will unleash the IPO beast back into the wild, and we will see a long-awaited return to liquidity, starting with the best and most compelling companies that currently clog a congested pipe of massive scale."Omada has made plenty of progress in the IPO drought, including by notching a <a target="_blank" class="" href="https://resourcecenter.omadahealth.com/blog/omada-health-joins-amazons-health-condition-programs-as-launch-partner">partnership with Amazon</a> in January. It's also sought deals to help employers <a target="_blank" rel="" href="https://www.businessinsider.com/omada-strategy-weight-loss-drugs-semaglutide-ozempic-2023-5">manage patients on weight-loss drugs like Ozempic</a>."Probably every year for the last five years, I get asked about Omada's IPO," Duffy told BI in January. "We want to make sure that Omada continues to grow, and that we're the sort of business that can thrive independently."

Exclusive: Diabetes startup Omada Health has confidentially filed its S-1 to go public

<div class="image-container float_right click-to-enlarge"><div class="image"><a title_source="Millennial Media" title_caption="Millennial Media's Paul Palmieri" class="zoomin" href="http://static3.businessinsider.com/image/51ee7d9f69bedd2e12000002-960/paul-palmieri-3.jpg"></a>Millennial MediaMillennial Media's Paul Palmieri</div></div>If you're looking for signs of the adtech bubble popping, then we may have found a couple for you. Three high-profile adtech companies went public in the last year and a half — Mobile ad network Millennial Media, online-ad provider Marin Software and video-ad server Tremor Video — and <a href="http://adage.com/article/digital/ad-tech-firms-struggle-sell-wall-street/243199/">all have seen their stocks largely rejected by investors</a>, even while the broader market rises.
Here's a summary of public adtech stocks, based on their <keyword id="35156" type="COMPANY" weightage="60" keywordseo="ipos">IPOs</keyword> (or historic highs) and their current prices:
<ul>
<li>Marin Software: Debuted at $16.26, now languishes at $12.</li>
<li>Millennial Media: Debuted at $23.50, now at $9.67</li>
<li>Tremor Video: Debuted at $8.50, now at $8.36</li>
<li>Velti: Debuted at $15.58, now at $1.13</li>
<li>Augme Technologies: Hit $4.90 in 2003, now at 36 cents.</li>
</ul>
You could add Groupon into the mix too. It debuted at $26.90, and is now worth only $8.90.
All these companies are chronically unprofitable. The Velti situation is most worrying — its revenues are down too and the company is in turnaround mode.
So what is going on here? Ad Age suggests that Wall Street doesn't understand adtech. Three CEOs of the above companies say their top priorities are to explain to investors how their business models work. They have complicated tech operations, and sometimes the metrics are difficult to understand.
Luma Partners CEO <a href="http://adage.com/article/digital/ad-tech-firms-struggle-sell-wall-street/243199/">Terence Kawaja says the companies that have gone public</a> aren't the cream of the crop. "Not the best of the companies in their categories are going out first," he said.
And, of course, there's the "scale" problem. Generally, folks at tech startups regard scaling-up as their top priority, not revenue. Get the users or the audience first, and worry about how to monetize it later. It's a sign of <a href="http://www.businessinsider.com/the-tech-worlds-hostility-to-advertising-is-a-sign-of-its-immaturity-and-it-needs-to-end-2013-6">Silicon Valley's financial immaturity</a>.
That lack of sophistication is now coming home to roost: Trendy <keyword id="138263" type="UNKNOWN" weightage="60" keywordseo="startup">startup</keyword> founders may be disdainful of revenue models, but investors sure are not. Shareholders are telling CEOs that, basically, they're delusional if they think that metrics, scale and reach are more important that revenues and net income.
The proof here is the one public adtech company that is the exception to the rule: Opera Software. Opera debuted at NKR 23.20, and is now trading nicely at 46.40.
Why? Take a <a href="http://business.opera.com/company/investors">look at its financials</a>: It's profitable.

Adtech Startups With Delusional Ideas About Profits Are Being Punished By Wall Street

‘Have seen an IPO season like no other’, Radhika Gupta and Nalin Moniz on flurry of IPOs this season

LionTree<ul class="summary-list"><li>LionTree founder Aryeh Bourkoff said the market isn't closed to startup IPOs, even after a string of disappointing performances this year, but investors aren't keen on companies with a "growth at all costs" mentality. </li><li>In an annual letter to staff obtained by Business Insider, Bourkoff wrote about the disconnect between the public and private markets. </li><li>That's not a bad change, he said: startups will have to strengthen their business models and improve corporate governance, which leads to "more predictable outcomes for stakeholders." </li><li>But Bourkoff said the IPO market is still open - in particular, for private equity-driven companies and exits before the election.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summarymarymary">Click here for more BI Prime stories</a>.</li></ul>Tech banker Aryeh Bourkoff has issued an outlook that startups eyeing the public markets should take note of: the bar has been raised. Fast-growing but money-losing companies like Uber and Lyft have seen their share prices tank after IPOs this year. And WeWork's planned IPO failed entirely. The LionTree founder and renowned tech, media, and telecom banker said in his annual letter to staff that a "culture clash" has emerged "between the 'achieve-the-impossible' ethos of the private markets and the fundamental frameworks of the public markets who want to see an eventual path to profitability." You can read the full memo from Bourkoff <a href="https://www.businessinsider.com/liontrees-aryeh-bourkoff-on-tech-deals-and-disruption-in-2020-2019-12">here. </a>Despite the disconnect, Bourkoff said the IPO market is still open for startups, particularly for private equity-driven companies and exits before the election. During an election season, IPOs historically slow as investors wait to see how results might impact businesses and industries. The 2019 IPO upheaval is not "necessarily a bad thing," Bourkoff wrote, because it creates "a higher bar" for companies looking to go public. Generally, public investors are looking for "a more grounded approach to valuation," one based on fundamentals and intrinsic value, rather than "growth at all costs." Bourkoff wrote that investors are looking for "line-of-sight to profitability and free cash flow generation." Startups seeking to achieve those characteristics benefit from a stronger business model and governance. Those were two sore spots for companies like <a href="https://www.businessinsider.com/heres-the-latest-wework-news-2019-6">WeWork</a>, whose IPO the market rejected before it even happened. Because of the public-private market disconnect, Bourkoff said he expects an increase in companies choosing private exits and sales over IPOs. In his letter, the banker also touched on how larger companies that survived startup competition will evolve, <a href="https://www.businessinsider.com/liontrees-aryeh-bourkoff-on-tech-deals-and-disruption-in-2020-2019-12">Business Insider reported last week</a>. <a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=wework&amp;itm_campaign=40-big-tech-predictions-for-2019-2"></a> <h3>NOW WATCH: <a href="https://www.businessinsider.com/bill-gates-warren-buffett-billionaires-donate-money-2017-10">On Giving Tuesday, see how Bill Gates and Warren Buffett are changing the world like no other humans in history</a></h3>

A top tech banker says there will be a higher bar for startups going public in 2020 after this year's unicorn IPO flops

<div class="KonaFilter image-container display-table"><div><div class="image on-image">IVPSandy Miller, general partner at venture-capital firm IVP</div></div></div><ul><li>In Silicon Valley, the big story for startups this year has been the boom in initial public offerings in the tech sector. </li><li>But Sandy Miller, general partner at venture-capital firm IVP, thinks a related market is likely to pick up steam in tandem with IPOs - that for mergers and acquisitions. </li><li>Indeed, the hot IPO market may spur more M&amp;A activity, Miller said. </li><li>Bigger tech companies, private equity firms, and non-tech companies may all enter the market for startups. </li></ul> This year is looking like it will be a big one for initial public offerings in the tech industry. But it could also see the start of a boom in a related market - that for mergers and acquisitions.The tech giants are flush with cash. Executives have M&amp;As on their minds. Some analysts believe one big acquisition could spur many more.On top of all that, the hot market for IPOs could in turn lead to more M&amp;A activity, said Sandy Miller, a general partner at venture-capital firm IVP, in a conversation with Business Insider. Miller thinks the M&amp;A market will heat up this year and stay hot for the next two to three years."The M&amp;A market and the IPO market tend to cycle together. They're not contrarian," Miller said. "The IPO market has been strong, and I think will continue to be strong."He added: "What that tends to do is it raises the visibility of companies that big-tech acquirers might want to acquire."<h2>More IPOs means more M&amp;A</h2>It's already an auspicious time for the M&amp;A market.Thanks to changes in the recent tax law, the biggest tech companies now have an estimated $470 billion in repatriated cash that they can use for a whole host of things. Many of them will likely use at least some of it to purchase other companies; some 57% of tech executives plan to pursue mergers and acquisitions in the next 12 months, a recent survey found.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="https://www.youtube.com/watch?v=2nC0TX_GCIM&amp;feature=youtu.be">YouTube/Salesforce</a>Salesforce CEO Marc Benioff's company is seeking to buy MuleSoft for $6.5 billion, a move one analyst thinks could help spur the M&amp;A boom.</div></div></div>And Salesforce's proposed $6.5 billion acquisition of MuleSoft, <a href="http://www.businessinsider.com/salesforces-mulesoft-acquistion-is-part-of-an-already-big-year-in-ma-2018-3">could start a "domino effect"</a> of M&amp;A in the space, a financial analyst recently argued.But Miller thinks the pick-up in the IPO market will give M&amp;A activity a turbo boost.With so many startups gearing up for IPOs, the market has become almost like a beauty pageant with larger corporations as the judges. The documents startups file to go public offer companies that are in the buying mood what's often their first detailed look at the startups' inner workings. And the tight timeline involved in an IPO forces potential acquirers to act quickly. "They're tracking a lot of interesting private companies, and they need something to catalyze their moving forward to make an acquisition offer, and an IPO filing is a very good example of that," Miller said.Miller noted the case of AppDynamics, which Cisco bought for $3.7 billion <a href="http://www.businessinsider.com/cisco-buying-appdynamics-ipo-cancelled-2017-1">on the eve of the startup's IPO</a>. Few companies are likely to wait until that late in the IPO process to buy a startup, Miller said. But other large companies will likely follow Cisco's lead and try to snap up startups between when they file to go IPO and before they actually debut.Many startups these days choose to file confidentially, which means their financial documents aren't made public immediately, so potential acquirers can't see them. But just the process of preparing for an IPO puts those startups in a good position to accept an acquisition offer if it comes, Miller said, because they've already done the work to figure out what they are worth on the public markets.<h2>Google and other tech giants have changed their corporate strategies </h2>Another factor likely to boost M&amp;A activity is a strategic shift made by some of the biggest and most acquisitive tech giants. Google, Amazon, and other behemoths have moved far beyond the core products that initially made them successful and have started thinking of themselves as conglomerates, Miller said. "If you look at Google, Microsoft, Facebook, and Amazon, they all seem to want to be doing just about everything," he said. When those companies enter new markets, they either have to develop products internally or acquire them. Often times they choose the latter path, Miller said. Meanwhile, just the sheer number of valuable private tech companies around - a function of the startup baby boom of the early 2000s - could also help spur more mergers and acquisitions, Miller said."In the context of larger M&amp;A transactions, there are just many more target companies than ever before, and that's just because there's been so many venture-backed companies born," he said. <h2>New entrants are joining the tech M&amp;A mix </h2>One more factor could play into the booming M&amp;A market: The entry of new groups of potential acquirers, including both companies from outside the tech industry and private equity firms.It's become something of a cliché, but just about every company, no matter the sector, has to be a tech company these days. But many are scrambling to catch up.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">CruiseGeneral Motors bought self-driving car startup Cruise in 2016, a move that could portend an emerging trend in non-tech companies buying small tech firms.</div></div></div>In the past, big companies in industries such as automobiles didn't necessarily worry about employing top-tier software engineers. Now that they realize they need such workers, many are turning to acquisitions to acquire top talent, Miller said.For their part, private equity firms have historically avoided making acquisitions in the tech industry in favor of lower-priced and underperforming companies in other sectors, Miller said. But many of these firms have begun to realize that investments in tech can provide big returns when managed well. "They're in a very competitive environment with a lot of money available, so they're looking for alternative areas to invest in," Miller said. Some private equity firms have had some success by adding tech companies to other assets they own to create a broader technology platform, he said."If they can add a product onto a platform, they can justify the economics of what they have to pay to acquire a successful venture-backed company," Miller said. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/we-went-on-mass-sausage-walk-london-over-1000-dachshunds-2018-3">1,000 sausage dogs and their owners turned up for a mass walk through London organised on Instagram</a></h3> <div> </div> </div>

Its not just the IPO market that's booming - here's why this Silicon Valley VC says 2018 will also be the year of M&As

<div class="image-container display-table float_right click-to-enlarge"><div><div class="image"><a title_source="Screenshot" title_caption="" class="zoomin" href="http://static1.businessinsider.com/image/528628726bb3f7e9511e0696-960/zulily-flash-sales-site.png"></a>Screenshot</div></div></div><keyword id="1896234" type="UNKNOWN" weightage="60" keywordseo="Zulily">Zulily</keyword>, a flash sales site for children's clothing and accessories, is going public today at $2.6 billion valuation.
As <a href="http://finance.fortune.cnn.com/2013/11/14/why-the-tech-press-is-ignoring-zulily-ipo/">Fortune's Dan Primack points out</a>, the tech press has largely ignored Zulily's big day, despite it's high valuation and the fact that its shares are priced above the IPO range.
Well, Primack is right. This is a pretty big IPO, especially because flash sales sites haven't been doing so hot lately. (Maybe you've heard of <a href="http://www.businessinsider.com/fab-confirms-81-staffers-laid-off-feb-15-2013-11">Fab and its recent troubles</a>.)
According to Primack, Zulily is slightly profit ble and brought in $439 million in revenue for the first nine month of the year. That's up from $202 million for the same period in 2012. Sounds like a healthy, growing business.
Zulily (ZU) will start trading on NASDAQ later this morning.

A Site That Sells Children's Clothing Is Going Public Today At A $2.6 Billion Valuation

<ul><li>Fintech firm Fino Payments Bank will open its IPO on October 29 and close on November 2.</li><li>The firm is looking to raise ₹1,200 crore through the public listing including an offer for sale worth ₹900 crore.</li><li>The company claims to be the first profitable payments bank to hit the Indian stock market.</li></ul>The Navi Mumbai-based fintech company Fino Payments Bank will be the first payments bank to get listed on the stock exchanges, that too while making profits. The company claims to be the first profitable player in the payments bank space to hit the Indian stock market. Paytm is another payments bank firm in line to get listed soon. Although Paytm has received SEBI’s nod, it is yet to announce dates to launch its initial public offering (IPO). “We are the only scheduled payment bank, which is profitable, we have set up the bank on very low capital,” said Rishi Gupta, managing director and chief executive officer (CEO) of the payment bank. Paytm is one strong competitor for the firm, but its drawback is it is still making losses while Fino Payments Bank has turned profitable in FY21. Paytm reported a loss of ₹1700 crore in FY21. Fino Payments Bank has been operational for over four years now. The payment bank offers a diverse range of financial services including current account and savings account (CASA), micro ATMs, Aadhaar enabled payment system (AePS) transactions, domestic remittances etc., that are primarily digital. <div type="image" title="fino chart 3" height="900" width="1200" msid="87280392" hostid="261"></div> The bank operates through over 6.41 lakh merchants’ network, 143 customer service points and 54 branches across pan India. The bank focuses on the unserved and underserved population, especially in rural and semi-urban areas where financial inclusion is required. The company earns revenue through fees and commissions from its merchant network and strategic commercial relationships. Although Fino is a profitable firm, it has a long way to go in comparison to market leader Paytm Payments Bank that has 100 times more merchant clients. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Fino Payments Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Paytm Payments Bank </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total merchants </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.41 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.4 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total deposits </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,870 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5,200 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total income </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹790 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,800 crore </td></tr></tbody></table> Further, analysts say that Fino Payments Bank could be eligible for a small finance bank licence within one year, which would open more growth opportunities. A report by B &amp; K Securities said that, “The bank has already completed over 4 years as a payment bank and hence it could become eligible for a small finance bank licence within next 1 year, which would open altogether different growth avenues.” <keyword id="6515163" type="General" weightage="20" keywordseo="fino-payments-bank-ipo" source="Orion">Fino Payments Bank IPO</keyword> to open this week The IPO of the company will open on October 29 and close on November 2. The company is looking to raise ₹1,200 crore through public listing including ₹900 crore through an offer for sale of 1.56 crore shares and ₹300 fresh issue of 52 lakh shares. The price band of the IPO is set at ₹560-577 per share. Promoter Fino Paytech will sell 52 lakh shares in the IPO. The bank plans to utilise the net proceeds from the fresh issue towards augmenting its tier-I capital base to meet its future capital requirements. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Issue details </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Price band </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹560 to ₹577 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">IPO open date </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">October 29 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">IPO close date </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">November 2 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Allotment date </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">November 9 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Initiation of refunds </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">November 10 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Credit of shares to demat account </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">November 11 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">IPO listing date </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">November 12 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Minimum lot </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">25 </td></tr></tbody></table> SEE ASLO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/sanjiv-goenka-makes-a-billion-dollar-comeback-to-the-worlds-biggest-t20-stage/articleshow/87277384.cms">Sanjiv Goenka makes a billion dollar comeback to the world's biggest T20 stage</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/after-raising-2-billion-since-2020-byjus-is-now-looking-to-raise-another-500-million-in-debt-to-acquire-more-businesses/articleshow/87276471.cms">After raising $2 billion since 2020, Byju’s is now looking to raise another $500 million in debt to acquire more businesses</a>

Fino Payments Bank will be the first fintech startup in India to get listed on the bourses and it is profitable

<ul><li><keyword id="982553" type="PERSON" weightage="20" keywordseo="Indian-startups">Indian startups</keyword> have raised more money through VC <keyword id="440371" type="PERSON" weightage="20" keywordseo="fundings">fundings</keyword> and financing, beating now listed companies that raised capital via IPOs this year. </li><li>While the startups raised nearly ₹449 billion in the <keyword id="6357097" type="DEFINITION" weightage="20" keywordseo="Venture-Capital">venture capital</keyword> (VC) funding rounds in 2018, nearly 25 companies listed on stock exchanges in India garnered ₹341.17 billion from investors. </li><li>Indian market regulator SEBI has been making amendments in regulations to provide <keyword id="6354763" type="UNKNOWN" weightage="20" keywordseo="ipo">IPO</keyword> as a substitute to VC funding for startups.</li></ul>2018 has turned out to be an eventful year for startup ecosystem. While several Indian startups are planning to tap the Initial Public Offerings (IPO) market as an alternative capital needs, they have already raised <a href="https://www.cnbctv18.com/market/data/indian-startups-raised-more-money-than-ipos-in-2018-1784121.htm">more money</a> through fundings and financing via the venture capital route, beating other Indian companies that raised money via IPOs this year, CNBC reported citing data from research firm, VCCEdge. Comparing the total amount <a href="https://officechai.com/startups/indian-startups-raised-money-indian-ipos-year/?utm_campaign=fullarticle&amp;utm_medium=referral&amp;utm_source=inshorts">raised by the companies</a> under the two segments — startups getting funding under the Venture Capital (VC) and other companies listed under IPOs — stats show that while the startups raised nearly ₹449 billion in VC funding rounds in 2018, nearly 25 companies listed on stock exchanges elevated with ₹341.17 billion from investors. In 2017, the companies listed under IPOs raised over ₹772 billion. On the other hand, the startup VC investments were found to be comparatively low, raising ₹243.47 billion. The biggest company under IPO, Bandhan Bank, raised ₹44.7 billion from investors this year. In fact, startups are forging ahead with nearly twice the Venture Capital ( VC) funding this year, as compared to 2017. Separately, the <a href="https://inc42.com/buzz/sebi-to-release-startup-listing-guidelines-by-january-20/">Security and Exchange Board of India</a> (SEBI) has recently floated changes in the existing regulations for the startup ecosystem. With this, the regulatory body is looking to provide IPO as a substitute to VC funding. However, the market regulator will release detailed guidelines by January 2019. It is also planning to launch a startup platform, with inputs from Bombay Stock Exchange (BSE), for its listing process across sectors — including Information Technology, e-commerce and biotech among others. ‘<keyword id="152045" type="ORGANIZATION" weightage="20" keywordseo="Unicorn">Unicorn</keyword> club’ India, which is the third -largest for startup ecosystem in India, <a href="http://v">added 8 new unicorns</a> to the list this year, adding up to 18 in total. Private companies with a valuation over $1 billion are the ones making to a ‘unicorn club’. Under the venture capital funding, India’s recent unicorns raised ₹70 billion in its latest round of <a href="https://officechai.com/startups/indian-startups-raised-money-indian-ipos-year/?utm_campaign=fullarticle&amp;utm_medium=referral&amp;utm_source=inshorts">fundings from international investors </a>such as Naspers and SoftBank among others. In fact, <keyword id="6358977" type="UNKNOWN" weightage="20" keywordseo="swiggy">swiggy</keyword> entered the ‘unicorn club’ just this year, accompanied by the homegrown food major, <a href="https://www.businesstoday.in/current/corporate/newest-desi-unicorn-on-the-block-is-zomato-just-raised-usd-200-million/story/269566.html">Zomato</a>, which raised 13.99 billion from Alibaba Group’s subsidiary — Ant Financial Services. See also: <a href="https://www.businessinsider.in/indias-largest-online-learning-service-is-all-set-to-become-the-4th-highest-valued-indian-startup-with-a-254-billion-valuation/articleshow/66474294.cms">India’s largest online learning service is all set to become the 4th highest valued Indian startup with a ₹254 billion valuation</a> <a href="http://v">The Indian government may roll back a tax on angel investments that is said to be hurting the country’s startup ecosystem</a> <a href="https://www.businessinsider.in/indian-food-delivery-unicorn-zomato-to-expand-footprint-to-30-more-cities/articleshow/66915630.cms">Indian food delivery unicorn Zomato to expand footprint to 30 more cities</a>

For Indian startups, 2018 has been a year of bouncing back as venture capital funding doubles

<ul class="summary-list"><li>Instacart founder's empty fridge was the "lightbulb moment" for coming up with the idea for the delivery startup, he said.</li><li><a href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9">Apoorva Mehta</a> walked away with over $1.1 billion in net worth after the delivery startup's IPO on Wednesday.</li></ul><a href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9" target="_blank" rel="noopener noreferrer">Apoorva Mehta</a>, the founder and former CEO of Instacart, credited his constantly empty fridge as the <a href="https://twitter.com/apoorva_mehta/status/1704194042551226725" target="_blank" rel="noopener noreferrer">"lightbulb moment"</a> behind his delivery startup."More than a decade ago, I was sitting in my apartment in San Francisco bemoaning the fact that the only thing I had in my refrigerator was hot sauce," Mehta wrote in a post on X on Wednesday."Don't get me wrong, I love hot sauce, but you can't exactly make it a meal," he added in the post that's been viewed over 500,000 times since being posted. The realization that he could shop for everything online except for groceries inspired him to code the first version of Instacart, he added.Mehta walked away with a <a href="https://www.bloomberg.com/news/articles/2023-09-19/instacart-founder-departs-with-1-3-billion-fortune-after-ipo#xj4y7vzkg">fortune of over $1.1 billion</a> after his delivery startup's IPO on Tuesday. He stepped down as the CEO in 2021 and <a href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9" target="_blank" rel="noopener">left the company's board</a> on Tuesday.In the lead-up to his handing over the reins as CEO to former Meta executive Fidji Simo, Mehta was involved in a <a href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9">dispute</a> with key investors who were pushing for the company to go public — at a time when the company's valuation peaked at $39 billion.For context, Instacart's IPO valued the company at $9.9 billion on Tuesday. And Mehta's net worth now represents a stark contrast from a <a href="https://www.bloomberg.com/news/articles/2023-09-19/instacart-founder-departs-with-1-3-billion-fortune-after-ipo#xj4y7vzkg" target="_blank" rel="noopener">peak of $3.5 billion</a> in 2021, per Bloomberg. Before going public, the company's SEC filings stated that the company had delivered <a href="https://www.sec.gov/Archives/edgar/data/1579091/000119312523235646/d55348ds1a.htm">over 900 million orders</a> since it began in 2012.Shares of Instacart — which went public on Tuesday at $30 a share — slumped <a href="https://www.businessinsider.com/understanding-instacarts-ipo-flop-grocery-business-hard-2023-9" target="_blank" rel="noopener noreferrer">11% a day after the IPO</a>. The company's shares were at $30.00 apiece at Friday's close. One expert — Aswath Damodaran, a professor of finance at NYU's Stern School of Business — had a dim view of the company's prospects. In an analysis published Tuesday, <a href="https://aswathdamodaran.blogspot.com/2023/09/putting-instacart-before-grocery-horse.html?m=1&amp;s=09" target="_blank" rel="noopener">Damodaran wrote</a>, "This IPO represents vastly downgraded expectations for the company's future."Before starting the company, Mehta quit his job at Amazon in 2010 and moved to San Francisco to become an entrepreneur. During this time, he said he founded <a href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9" target="_blank" rel="noopener">twenty failed startups</a>. He told CNBC Squawk Box in an interview on Tuesday that these <a href="https://www.cnbc.com/2023/09/20/instacart-founder-launched-20-failed-companies-now-hes-a-billionaire.html" target="_blank" rel="noopener">failed ideas</a> included a social network for lawyers and an advertising company aimed at gaming companies.During the early stages of Instacart, Mehta also said he <a href="https://techcrunch.com/2012/08/18/how-instacart-hacked-yc/">missed the application deadline</a> for the startup accelerator YCombinator by over two months. He used his app to order a six-pack of beers for YCombinator's headquarters, a stunt which earned him an interview with the company — and eventually led to them becoming the startup's first investors.Mehta and Instacart did not immediately respond to requests for comment from Insider, sent outside regular business hours.

Instacart founder Apoorva Mehta says his 'empty fridge' was the inspiration for the delivery startup

<div class="KonaFilter image-container display-table"><div><div class="image on-image"></div></div></div><ul class="summary-list"><li>Investors and analysts are questioning the value of the traditional <a href="https://www.businessinsider.com/category/ipo">initial public offering</a> process and the sharp jump in company shares that typically accompanies it.</li><li>That rise, or pop, in a startup's shares on their first day of trading can represent millions of dollars in money that the company left on the table - and billions of dollars in the aggregate.</li><li>Some companies, including <a href="https://www.businessinsider.com/category/slack">Slack</a>, which is <a href="https://www.businessinsider.com/slack-direct-listing-citadel-securities-humans-tech-2019-6">set to go public Thursday</a>, are forswearing first-day pops by pursuing alternatives to the standard IPO process.</li><li>While some investors decry pops, other investors and analysts think they and traditional IPOs serve good purposes and the alternatives aren't any better.</li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary" target="_blank" rel="noopener">Click here for more BI Prime stories</a>.</li></ul>If <a href="https://www.businessinsider.com/nfx-partner-pete-flint-explains-focus-on-network-effects-2019-5">Pete Flint</a> had to do it over again, he would have gone with a smaller pop - and maybe no pop at all.The pop in this case is the jump in a company's stock price that that often happens on its first day of trading after an IPO. Startups and their investment bankers often factor in a pop when they price an initial public offering. Such a price rise can help promote the company and its stock and help the firm curry favor among potential long-term investors, the thinking goes.When Flint took Trulia public, he followed his bankers advice and priced in a pop of 30% to the real-estate startup's public offering. But these days, he's doubting the conventional wisdom when it comes to the need or desirability of a pop."The reality is that one year post-IPO, [investors] have completely forgotten what happened on the day of the IPO," Flint said. "The investors have forgotten, and you'd rather have the extra cash in the bank."Flint's not the only one questioning the wisdom of first-day pops and the traditional IPO process these days. Work messaging software maker <a href="https://www.businessinsider.com/category/slack">Slack</a>, for example, is set to go public Thursday <a href="https://www.businessinsider.com/slack-direct-listing-process-likely-wont-be-copied-widely-2019-6">using a direct listing process</a>, an alternative to the standard IPO that generally doesn't involve expectations of an instant pop in the stock price.&#xa0;Read this: <a href="https://www.businessinsider.com/slack-direct-listing-process-likely-wont-be-copied-widely-2019-6">Slack's $17 billion direct listing could be the IPO game-changer Silicon Valley has been waiting for. But others say it's a techie delusion.</a>And last week, prominent venture capitalists Bill Gurley <a href="https://twitter.com/bgurley/status/1138880860361449472">set off a debate on Twitter</a> when he decried the pop in shares of CrowdStrike and Zoom when they went public recently. CrowdStrike's stock opened trading on its first day at $63.50, a whopping 87% higher than its IPO price of $34 a share. Zoom's stock, meanwhile, opened trading at $65 a share after pricing at $36, and ended the day at $62 a share.That $26 a share difference between Zoom's IPO price and the first-day closing price of its shares represents more than $600 million in extra cash the company could have had in its coffers if it had priced its shares closer to the price investors at large were willing to pay for them, Gurley said."Imagine if a [chief financial officer or] CEO gave away a half a billion dollars? Or simply squandered it. How would that be viewed?" Gurley <a href="https://twitter.com/bgurley/status/1138880862726922240">said in a tweet</a>. "This is similar, but it's institutionalized, and therefore everyone is numb to it. And the press views a "pop" as success, which is just poor financial comprehension."&#xa0;<h2>IPO pops have been around for decades</h2>The IPO pop isn't a new phenomenon. On average, startups have generally seen significant jumps in their share prices going back to at least 1980, according to <a href="https://site.warrington.ufl.edu/ritter/ipo-data/">data</a> from <a href="https://www.businessinsider.com/tech-ipo-jay-ritter-2018-5">Jay Ritter</a>, a finance professor at the University of Florida who closely studies the IPO market.During the last stages of the dot-com boom, pops were a much bigger problem, in terms of the money startups were leaving on the table, than they are today, according to Ritter's data. In 1999, for example, the average stock closed up a whopping 71% over its IPO price on its first day of trading. In 2000, the average stock ended its first day of trading up 56% about its IPO price. Collectively startups that went public in those two years lost out on $67 billion thanks to the first-day pops in their stocks.By contrast, from 2001 to last year, the average startup saw its shares rise 14% above their IPO price on their first day of trading, according to Ritter's data. And over the course of those 18 years, the companies left $65 billion on the table due to such pops - or $2 billion less than in the two dot-com boom years alone.But there are signs that the pop problem is getting worse for startups. The average first-day rise jumped to 19% last year from 13% the year before, according to Ritter's data. The amount companies left on the table hit $6.4 billion, the second highest amount since the dot-com days and nearly double the amount from 2017. Thus far this year, the average first-day pop has been 24%, which is the highest level since 2000, Ritter said.The traditional IPO is a significantly costly process for startups Ritter said. On average, the money that startups leave on the table due to their IPO pops combined with the amount of fees they pay their investment bankers adds up to about 5% of the value of those companies, he said. That total amount is often equivalent to an entire year's worth of revenue for those firms, he said."If you think about how hard the employees have to work for that [amount], it's surprising how blasé companies are about throwing away all that money in the cost of going public," Ritter said.<h2>Some companies have explored IPO alternatives</h2>Startups don't have to use the traditional IPO process to go public or price in a pop. With its direct listing, Slack is following in the footsteps of <a href="https://www.businessinsider.com/category/spotify">Spotify</a>, which <a href="https://markets.businessinsider.com/news/stocks/spotify-stock-price-ipo-ticker-time-what-to-expect-as-the-streaming-music-giant-goes-public-2018-4-1020354347">used the same method to go public last year</a>. In a direct listing, employees and early investors in a startup sell their shares on the public market, rather than going through institutional investors first. Generally, there's no pop priced in; instead, the price at which they sell their shares is the market price.Gurley and other venture investors think more companies should use the direct-listing method for going public."This is how 100% of IPOs should be done," he said on Twitter.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div></div></div>In the late 1990s and 2000s, several companies, including <a href="https://www.businessinsider.com/category/google">Google</a>, tested another alternative for going public - the Dutch or blind auction method. In that process, investors put in bids for shares in a public offering, stating how many shares they'll purchase at a particular price. The auction managers set the price for the offering at the amount at which all shares the company wants to sell will be sold; i.e., there are enough bids at or above that price to cover all the shares the company is offering. Because a Dutch auction tends to price shares much closer to the level at which they'll trade on the open market, the process can maximize the amount startups raise in their offering.But Dutch auctions never caught on widely and have been largely forgotten since Google's 2004 debut. Ritter blames the investment banks. For the most part, the banks have been "actively hostile" toward the Dutch auction process, because it takes away their ability to reward favored clients, Ritter said.In a typical IPO, the banks have wide discretion over who gets to buy the startup's shares. In a hot IPO, they tend to give first dibs on those shares to their mutual fund and hedge fund clients that pay a premium for their research and other services, Ritter said. In a Dutch auction, they don't have that discretion, he said."The investment banks don't want their business model threatened," he said.<h2>Pops and IPOs persist for good reasons</h2>But traditional IPOs and their accompanying pops persist for reasons other than just banker self-interest or inertia, other market watchers said.One explanation they give is that the alternatives to an IPO aren't well established or practical for most companies.A big part of the reason why the Dutch auction process didn't catch on after Google's IPO is because the search giant's offering was <a href="https://www.cnbc.com/2014/08/18/pisani-googles-ipo-was-a-disasterat-the-time.html">largely seen as a disappointment</a>. The company sold fewer shares than it initially planned and priced them at the low end of its expected range.Direct listings will also likely struggle to go mainstream. To have a successful direct listing, companies need to have a prominent brand, a price for their shares that's already been firmed up in private markets - and no urgent need for cash, analysts said. Those factors exclude the vast majority of companies seeking to go public, they said."I wish there was some better process [than a traditional IPO], but so far we really haven't seen a better process that works for a lot of companies," said Reena Aggarwal, a finance professor and director of the Center for Financial Markets and Policy at Georgetown University.Pops also persist because the standard IPO process works fairly well for most companies, analysts said. The companies themselves raise cash. The process serves as a marketing vehicle for the startups and their shares. And in most cases, the money left on the table from a pop is outweighed by other factors, analysts said.<h2>Nobody wants to see a stock fall on its IPO</h2>If<div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"></div></div></div> a startup prices its stock too high in an IPO, it runs the risk of having its shares fall when they hit the open market, as Uber's notoriously did after their debut last month. That kind of market reaction can sour investors on a startup's stock for months or even years afterward, making it difficult for the company's shares to recover, said <a href="https://www.businessinsider.com/sapphire-ventures-jai-das-enterprise-software-ipo-good-bet-2019-4">Jai Das</a>, president and managing director of Sapphire Ventures. Investors essentially put such a stock in a "penalty box," he said."Everybody says, 'Hey, this stock sucks,'" Das said. "Nobody wants to touch it."When that happens, it can have follow-on effects, he said. Startups in such positions can have a difficult time raising more money on the public markets. The morale of their employees can decline. If things get bad enough, employees will leave and the company will often have to dole out many more stock options or shares to lure in new employees. The startup can even face lawsuits from shareholders charging that they've been defrauded.If "the price goes down a lot, then everybody's going to be unhappy about that," said Aggarwal.Got a tip about the IPO market or the tech industry? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter <a href="https://twitter.com/troywolv/">@troywolv</a>, or send him a secure message through Signal at 415.515.5594. You can also <a href="https://www.businessinsider.com/how-to-tip-business-insider-securely-guide-signal-securedrop-2017-6"> contact Business Insider securely via SecureDrop</a>.<ul class="read-more-links"><li>Read more about the IPO market:</li><li><a href="https://www.businessinsider.com/peloton-ipo-business-model-analysis-investors-bullish-2019-6" data-read-more-link="" data-e2e-name="read-more-link">Peloton, the fitness startup with a cultlike following, could go public at an $8 billion valuation. Insiders reveal why its business seems set to explode.</a></li><li><a href="https://www.businessinsider.com/why-uber-disappointing-ipo-could-haunt-company-for-years-2019-5" data-read-more-link="" data-e2e-name="read-more-link">Sure, Uber didn't leave any money on the table, but its IPO was nothing to celebrate and it could haunt the company and its execs for years to come</a></li><li><a href="https://www.businessinsider.com/uber-ipo-happened-worst-possible-time-2019-5" data-read-more-link="" data-e2e-name="read-more-link">Uber chose the worst possible week to have its IPO, and the bad timing will cost it billions</a></li><li><a href="https://www.businessinsider.com/sapphire-ventures-jai-das-enterprise-software-ipo-good-bet-2019-4" data-read-more-link="" data-e2e-name="read-more-link">A Silicon Valley VC says a group of tech companies are quietly blowing away expectations while the spotlight shines on splashy IPOs like Lyft and Pinterest</a></li></ul><a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=uber&amp;itm_campaign=40-big-tech-predictions-for-2019"></a><div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/apple-to-android-switch-new-phone-stuck-ecosystem-2019-6">Here's why it's so hard to switch from Apple to Android</a></h3> <div> </div> </div>

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