A dozen 'Twitters' waiting to list

PHOTO: A dozen 'Twitters' waiting to list

SAN FRANCISCO - For technology executives weighing market flotations for Silicon Valley start-ups, last week's gangbusters Twitter Inc initial public offering sent a powerful signal: full speed ahead.

About a dozen private companies are valued at more than US$1 billion (S$1.2 billion) each, and many of them have already been holding informal talks with bankers. Now, many - including Box, Square and Airbnb - are likely to accelerate their IPO plans, according to venture capitalists.

File-sharing company Box picked Morgan Stanley, Credit Suisse and JP Morgan to lead its IPO, Reuters reported on Friday. The company has been valued at more than US$1.2 billion by private venture-capital investors, but it remains unclear whether it is profitable.

Twitter's lack of profits proved to be no obstacle to the micro-blogging site raising as much as US$2.1 billion in its IPO. Its current share price of around US$41 gives it a market value north of US$22 billion.

That opens the door for other big-name private companies, including Square, the payments company founded by Twitter co-founder Jack Dorsey, which has begun exploring the possibility of an IPO next year, according to the Wall Street Journal. Profits are not expected until 2015. Square declined to comment.

Airbnb, an accommodation service, is also often cited as a potential IPO candidate. "They don't have inventory and have pretty low overhead," said analyst Michael Pachter, who believes the company is profitable. The company declined to comment.

At Dropbox, a file-sharing service, chief executive Drew Houston said in September that his company, valued at US$4 billion, has cash left from a recent fundraising round and is in no hurry to hold an IPO.

"I'm sure we'll go public at some point, but fortunately it's not something we have to think about right now," Mr Houston said at a Techcrunch conference.

Social-media service Pinterest, meanwhile, raised US$225 million at a US$3.8 billion valuation last month, even though it had begun to make money only in September by showing ads. Chief executive Ben Silbermann has consistently denied that the company is considering an IPO.

Mr Jeremy Liew, a partner at Lightspeed Venture Partners, which invested in photo-messaging application Snapchat, said Twitter was the latest company to prove to investors that social-media services can eventually turn their mass audiences into reliable revenue sources, even if they have yet to turn a profit.

"Once you touch that many people, you will always figure out ways to make money," Mr Liew said. "After you enter the popular consciousness, there'll be some guy on Madison Avenue asking,'What's our Twitter strategy? What's our Tumblr strategy? What's our Facebook strategy? What's our Snapchat strategy?'"

Snapchat is perhaps one of the farthest down the line. It raised US$60 million earlier this year at a valuation of US$800 million. A Pew Research Center study released last month said that 9 per cent of United States mobile-phone users use Snapchat.

Notetaking service Evernote, which has been valued at US$1 billion, has signalled for several months that it is beginning to mull over an IPO, although CEO Phil Libin said an offering would still be at least two years away.


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