Companies that Had Their IPO in 2018

197 companies had their IPO (initial public offering) in 2018 amid significant market volatility. Despite economic uncertainties, including trade tensions and fluctuating cryptocurrency markets, these companies collectively raised around $47.2 billion in capital across various sectors, though technology firms dominated. Cloud storage providers, music streaming services, cybersecurity firms, and electronic signature platforms all made successful market debuts.

The year witnessed several high-profile debuts, including Spotify's innovative direct listing approach and SoftBank's massive $23.5 billion raise. Companies that had their IPO in 2018 operated in an environment with an appetite for growth, even as the broader market experienced significant fluctuations and concerns about overvaluation in certain sectors. Despite the year’s challenges, investors demonstrated substantial interest, particularly in companies with innovative business models and strong growth potential.

2018 IPOs Versus the Previous Years

The performance of companies that had their IPO in 2018 represented a significant improvement compared to previous years. In 2017, US-listed IPOs reached $49.4 billion via 189 deals, which was double the IPO volume compared to 2016 ($24.3 billion via 111 deals). These years, however, did not match the peak years of 2014 and 2013, with 275 IPOs and 222 IPOs, respectively.

Cross-border IPOs were particularly significant in 2018, with many international firms choosing to list on US exchanges. The New York Stock Exchange (NYSE) attracted substantial cross-border IPO volume in 2018, building on 2017 when it secured $6.9 billion via 19 deals–nearly five times the volume seen on Nasdaq.

These companies had the opportunity to raise capital and expand their business, while also providing investors with an opportunity to invest in promising companies. Overall, 2018 reflected a continuing interest and excitement around new, innovative companies going public, especially tech companies, consumer brands and financial firms.

Among the companies that went public in 2018, several stood out for their size, significance, and subsequent market impact:

• SoftBank Corp (SFTBY): The largest company that had its IPO in 2018 was SoftBank Corp, which raised $23.5 billion at a valuation of $63 billion. This telecommunications subsidiary of SoftBank Group represented one of the largest IPOs in global financial history.
• Spotify (SPOT): Spotify's public debut in April 2018 marked one of the most significant and innovative approaches among companies that had their IPO in 2018. Rather than pursuing a traditional underwriting process, the music streaming giant opted for a direct listing on the New York Stock Exchange. This unconventional approach eliminated the need for traditional underwriters and allowed existing shareholders to sell their shares directly to the public, creating a new template that other tech companies would later follow.
• Dropbox (DBX): The cloud storage provider raised over $750 million in its March 2018 public offering.
• DocuSign (DOCU): The electronic signature and digital transaction management company saw its shares soar more than 30% on their first day of trading after its April 2018 debut.
• Dell Technologies (DTC): Dell's return to public markets in 2018 represented one of the more complex transactions among companies that had their IPO in 2018. The computer hardware giant had previously gone private in 2013 but re-emerged as a public company through a complicated deal involving tracking stock related to its ownership stake in VMware.

Some other notable companies that had their IPO in 2018 included:

• China Tower Corp. Ltd. (CHWRF) - $7.5 billion
• Xiaomi Corp. (XIACY) - $4.7 billion
• Meituan-Dianping (MPNGY) - $4.2 billion
• AXA Equitable Holdings, Inc. (EQH) - $2.7 billion
• PagSeguro Digital Ltd. (PAGS) - $2.27 billion
• iQiyi, Inc. (IQ) - $2.25 billion
• Pinduoduo Inc. (PDD) - $1.6 billion
• Elanco Animal Health Inc. (ELAN) - $1.5 billion

Venture capital-backed companies represented a significant portion of the firms that had their IPO in 2018. According to industry data, 85 venture-backed IPOs occurred in 2018, accounting for more than 50% of total exit value at approximately $63.6 billion. This strong showing highlighted the maturation of the venture capital ecosystem and provided important liquidity opportunities for early investors.

For companies that went public with venture backing in 2018, the path to public markets was supported by substantial private funding rounds in previous years. Several factors contributed to this success:

• Record levels of venture capital deployment ($130.9 billion invested in US-based startups in 2018)
• Substantial dry powder ($75.7 billion) available to VCs
• Increasing deal sizes across the entire venture spectrum
• A 91.3% increase in mega-deals compared to 2017

Biggest U.S. VC-Backed IPOs of 2018

• PagSeguro Digital Ltd. (PAGS) - $2.6 billion
• StoneCo Ltd. (STNE) - $1.4 billion
• Domo Inc. (DOMO) - $690 million
• DocuSign Inc. (DOCU) - $629 million
• Dropbox Inc. (DBX) - $756 million
• Zuora Inc. (ZUO) - $154 million
• Pivotal Software Inc. (PVTL) - $555 million
• Bloom Energy Corp. (BE) - $270 million
• Carbon Black Inc. (CBLK) - $152 million
• Eventbrite Inc. (EB) - $230 million

Emergence of Direct Listings

Among the companies that had their IPO in 2018, Spotify pioneered the direct listing approach, bypassing traditional underwriting processes. This alternative path to public markets reduced fees paid to investment banks and avoided dilution for existing shareholders, creating a template that other tech companies would follow in subsequent years.

Dominance of the Technology Sector

Technology firms represented a substantial percentage of companies that had their IPO in 2018. Beyond consumer-facing platforms like Spotify and Dropbox, enterprise software companies demonstrated particular strength. For example, cybersecurity firm Zscaler saw its share price double within months of its March 2018 public debut.

Innovation in Healthcare

Biotech and pharmaceutical companies constituted another significant segment of firms that had their IPO in 2018. Most notable among these was Moderna, which would later gain worldwide recognition for its mRNA COVID-19 vaccine. Moderna's 2018 public offering provided crucial capital for its research and development efforts long before the pandemic thrust the company into the global spotlight.

Financial Sponsor-Backed IPOs

For companies that went public with private equity backing in 2018, the NYSE was the preferred exchange. This continued a decade-long trend, with NYSE capturing 72.5% of sponsor-related IPO volume in 2017.

For investors considering opportunities among companies that have their IPOs, a fiduciary financial advisor can be crucial in navigating the potential risks and rewards. As a fiduciary, these advisors are legally obligated to act in their clients' best interests, providing particular value in the context of newly public companies where information asymmetries and valuation uncertainties can be significant.

Navigating IPO Hype vs Reality

Fiduciary advisors help investors distinguish between genuine growth potential and market hype surrounding companies that had their IPO in 2018 and beyond. For instance, while Dropbox and Spotify received considerable media attention, a fiduciary advisor would have conducted a thorough analysis of their business models, competitive positioning, and financial projections before recommending investment.

Portfolio Integration Considerations

A fiduciary financial advisor will assess how these potential investments fit within clients' broader portfolios. This holistic approach can be particularly valuable in a situation like 2018, when there were lots of high-profile tech companies that attracted disproportionate investor attention based on name recognition alone.

Lock-up Period Planning

Most companies that had their IPO in 2018 implemented standard lock-up periods preventing insiders from selling shares for 90-180 days after the offering. Fiduciary advisors can help clients proactively understand potential price volatility following these lock-up expirations and develop appropriate entry and exit strategies.

When researching companies that had their IPO in 2018 or any other year, analysts and investors often encounter varying figures across different sources. These discrepancies stem from several methodological differences in how IPOs are counted and classified:

• Definition Variations: Different reporting entities may use different definitions of what constitutes an IPO. Some sources include only offerings above certain minimum sizes (often $50 million or $100 million in raised capital), while others might include smaller offerings. Some reports exclude certain types of listings, such as direct listings (like Spotify's), special purpose acquisition companies (SPACs), or specific listing mechanisms.
• Geographic Classification Challenges: For multinational companies that had their IPO in 2018, geographic classification can vary between sources. A company headquartered in one country but listing on a US exchange might be counted differently across reports. This particularly affects cross-border IPOs, which represented a significant portion of 2018's market activity.
• Timing Considerations: The precise timing of when an offering is counted can create disparities in reporting for a specific year. Some offerings announced in late 2018 might have been completed in early 2019, leading to differences in annual totals. Additionally, some reports may use announcement dates while others use first trading dates, creating further discrepancies.
• Exchange-Specific Reporting: The NYSE and Nasdaq sometimes report figures specific to their exchanges, potentially leading to confusion when comparing these figures to market-wide data for companies that had their IPO in 2018.

Tips for Your IPO Search Queries

When analyzing IPOs in a certain year, investors should:

• Identify the source methodology for any reported figures

• Clarify the inclusion/exclusion criteria for IPO counts

• Distinguish between regional and global figures

• Consider using multiple reputable sources to develop a comprehensive understanding of a specific year’s market

• Consult with a fiduciary financial advisor who can provide context for these statistical variations

Understanding these methodological differences provides crucial context when evaluating the historical significance and investment implications of companies that had their IPO in 2018.

Despite a complex economic landscape in 2018, the 197 firms that successfully completed public offerings raised billions in capital and set important precedents for future market entrants. Companies that had their IPO in 2018 provided both opportunities and cautionary tales about the importance of thorough analysis, appropriate valuation, and strategic portfolio integration.

At Strategic Investment Management, we value the potential gain of well-informed investment opportunities and we aim to keep you educated about how to respond to inconsistent markets and fluctuating stocks. Our team is ready to assist you in developing and managing your unique investment portfolio. Contact us as at 512.341.9898, or request a consultation online.