By April of this year, only one tech company had gone public. That honor went to Dell’s SecureWorks software, which was introduced to the markets and fizzled rather quickly in an embarrassing but all too common order of events. Tech companies of late have opted to go private instead, resulting in a trend of acquisitions which now out outpace publicly traded companies. However, Twilio’s latest success on the market after debuting last month has many rethinking the tech IPO drought.
Twilio is cloud based communications platform, which enables developers to use traditional coding to create user friendly methods of communications. The company got its start in 2008, and although it is currently profitable, its growth in terms of revenue has been impressive and its current customer base includes big names such as Walmart, Whatsapp, Airbnb and Sprint. So when it launched in June, above the expected range at about $15, the price more than doubled and currently sits at around $40 a share. The launch was a success–a much needed example in today’s landscape, where there have been just 40 IPOs this year.
Just when you thought that the initial hype is over, on August 8th Twilio came out with its first earnings results as a public company. Twilio delivered a strong beat on both top and bottom line numbers.
The good news for Twilio is the need for its product and its size relative to its competitors. Twilio is said to be about five times larger than the closest alternative, and is steadily growing. However, some have showed concern about the company’s focus on large companies only. One switch from Twilio’s service to another can do a bit of damage. However, Twilio is no easily forgotten product, or PaaS (Platform as a Service) to be more specific. It has and continues to be innovative, and as such, is one of only 8 companies to continuously appear CNBC’s Disruptor 50 list since 2012, the entire four years since the list has existed.
Yet, instead of speculation and anxiety about Twilio’s ability to sustain in the aftermarket, this is a time for rejoicing. With Twilio coming out swinging as the first venture-backed tech IPO of the year, the company has showed that it can be done and that demand for tech exists on the market, after it closed its first day with a gain of over 90%. Now, suggests Bob O’Brien of The Street, who heralded Twilio as the blueprint for tech IPOs, this may bring visibility to companies like Uber and Airbnb, both of which have been delaying going public, but are favorites to do so in 2016.
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