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2013’s IPO Landscape: Here’s What the Tech Pros Think

Internet and software among the more exciting fields


The IPOPlaybook — and the rest of the financial media — certainly got its fill of juicy IPO stories in 2012. Sure, a pig part of the year was the before-and-after of Facebook‘s (NASDAQ:FB) blockbuster IPO, but we also saw other hot trends, like the success of cloud stocks such as ServiceNow (NYSE:NOW) and Workday (NYSE:WDAY), as well as heat from the mobile sector thanks to companies like Trulia (NYSE:TRLA) and Yelp (NYSE:YELP).

But those great stories are behind us, and now it’s time to focus on 2013. I’ve already sounded off on a few IPO expectations I have for this year, but I also decided to talk to a number of tech’s top people to check their pulse on the environment.

Here’s what they had to say:

Billy Bosworth, CEO, DataStax

“Coming off the slowdown at the end of 2012, I think the market is primed for exciting software IPOs that revolve around two main themes: Big Data and social. The world is awash in data: storing it at high speeds, retrieving it conveniently from wherever and whenever you want it, and making sense of it once you have it. There are several Big Data companies now at a large enough scale to make the leap into an IPO. On the social side, it’s still all about changing people’s experience when they’re hanging out with each other, gaming, shopping, or just wanting to share ideas.

“One trend to watch is how the markets respond to software companies based on non-traditional business models, such as advertising, versus a better understood model such as paid subscriptions. If the market continues to warm up to the former category, the opportunity for more software IPOs will emerge quickly based on the volume of users they can generate in a short period of time.”

Mona DeFrawi, CEO and Founder, Equidity

“2012 proved to be a year of lessons: Investors that chased companies, including Groupon (NASDAQ:GRPN) and Zynga (NASDAQ:ZNGA), in hot sectors such as Internet and social media witnessed subsequent IPO debacles. This year, we are sitting on the largest IPO backlog in history, and there are hundreds if not thousands of privately held companies that are set to become dynamic and profitable public companies in markets such as e-commerce, mobile/wireless, enterprise, consumer web, advertising/marketing and software. In 2013, my prediction is that more companies will apply new strategies to the IPO process to emulate the success of OpenTable (NASDAQ:OPEN), Workday and Guidewire (NYSE:GWRE).”

Morgan Flager, Partner, Silverton Partners

“I believe 2013 will be a strong year for IPOs. While the disappointing result of Facebook and other highly anticipated Web offerings may have made investors cautious to jump into consumer-focused technology companies with evolving business models, enterprise-focused companies with more mature models have been and will continue to be received well. Identity management and Big Data analytics will be particularly hot areas for new IPOs, as well as M&A activity.”

Scott Sellers, CEO and Co-Founder, Azul Systems

“Last year, Facebook and other Internet IPOs dominated the headlines, and we’ll likely see more potential Internet IPOs, such as Twitter, in 2013. But an exciting trend for this year will be more IPOs in the enterprise realm. Companies such as Box, Atlassian and Cloudera are growing rapidly and are examples of how well companies are doing in enterprise markets. I believe the public markets will react very favorably to these types of companies that are driving real business and real profits, and I expect high valuations with their hopeful IPOs.”

Roman Stanek, CEO and Founder, GoodData

“The stock market just last week reached a five-year high. The U.S. economy continues to recover while technologies focused on monetizing Big Data and the cloud are much closer to a mature stage of development. Together, these factors align to create efficiency and increase profits exponentially for companies across numerous industry sectors. I expect the IPO market to pick up more speed in 2013, and I also anticipate more acquisitions aimed at B2B customers demanding cloud-based services.”

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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