The Pulse #62: The End of the Tech IPO Winter

Tech IPOs are back: Arm, Instacart and Klaviyo have gone public. Also: lessons from Bun making waves in the Node ecosystem; Twillio’s iconic billboard change and more pulse on the industry.

The Pulse is a series covering insights, patterns, and trends within Big Tech and startups. Notice an interesting event or trend? Send me a message! I treat all such messages as anonymous.

Thank you for the feedback on last week’s first Industry Pulse column. Most of you liked it, and I enjoy writing it, so it might become a regular one.

Today's topics are:

1. Industry Pulse: Databricks going public – maybe, Square’s long outage, Slack’s redesign, and Valve blocks video games with GenAI assets.

2. The tech IPO winter has ended: For 18 months, there were no tech IPOs, with HashiCorp being the last to list on the stock market. But now Arm, Instacart and Klaviyo have broken the ice, offering hope for more to come.

3. Bun: lessons from disrupting a tech ecosystem. If you use JavaScript or TypeScript for backend development, Node is the most popular choice of framework. A new runtime called “Bun” is taking this space by storm, with lessons about how even mature tech ecosystems can be disrupted.

4. Twilio’s iconic billboard is different, but why? For 7 years on the highway to San Francisco, Twilio had a billboard boasting: “Ask your developer.” Now, the company has replaced this famous billboard with a new message geared toward sales and marketing teams.

1. Industry pulse

In this section, I summarize and comment on recent events relevant for software engineers, engineering managers, and tech workers.

Databricks going public soon?

When speculating recently about which tech companies could next float on the stock market, Databricks was my top pick. There’s now more evidence the data and analytics platform is gearing up to do precisely this, in the form of fundraising. From the company, last week:

“Databricks, the Data and AI company, today announced its Series I funding, raising over $500 million. This funding values the company at $43 billion and establishes the price per share at $73.50. The series is led by funds and accounts advised by T. Rowe Price Associates, Inc., which is joined by other existing investors”

T. Rowe Price Associates is an investment management firm not known for making risky investments. Raising $500M funding, while also disclosing the price per share suggests to me that these investors expect Databricks to go public soon, and that the company’s valuation will be above $43B.

As and when Databricks goes public, investors will likely compare its business metrics to those of its publicly traded competitor, Snowflake, in three main areas:

1. Revenue

2. Profit margin

3. Growth rate

Put simply, if Databricks does better on these key metrics, then it will be worth more than Snowflake, which is currently at a $52B market cap. If it does better on two of the three metrics, it will likely still be worth as much. T. Rowe Price Assoc. likely sought these numbers while deciding whether to invest in Databricks, and liked what they saw.

I’ve talked with current Databricks employees who are cautiously optimistic and hopeful that an IPO is coming. Of course they don’t have any concrete information – just like I had no confirmation an IPO was on the way when I worked at Uber. Pulling the trigger to go public will be decided by the C-level; employees are informed of such decisions at the same time as the public does. (Link)

Square’s day-long outage, CEO steps down