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IPO Boom Continues to Benefit Venture-Backed Companies

The recent IPO boom has accelerated with the resounding success of the DoorDash and Airbnb IPOs. 2020 continues to be a stellar year for IPOs allowing venture capital funds to exit long term investments. While M&A exits continue to be the primary liquidity strategy for most venture capital funds, a robust IPO market offers them another alternative that can help drive valuations in M&A transactions as well.

A week of mega-IPOs capped off a year that has refashioned the traditional bridge between public and private markets. Richly valued tech offerings this week from Airbnb, DoorDash and C3.ai pushed the value of all VC-backed IPOs in 2020 to a decade high. The flurry of deals brought total exit value—or pre-valuation at time of IPO—to more than $253 billion this year, blowing away the high-water mark of $224 billion that was set last year, according to PitchBook data.

Tags

mergers and acquisitions, public offerings, ipos, venture capital