The company that is changing driving owns no cars; the one that has the hotel industry on the run owns no rooms. Such are the standard tributes to the radical business models of Uber and Airbnb. Something else they lack, despite putative valuations of $68bn and $30bn respectively, is public listings. For good or ill, this is innovation too, and part of a trend that reaches beyond the technology sector.
Private investors flush with cash have provided these companies and others with billions in funding. Tech company initial public offerings in 2016 are at the lowest level since the 2009 crisis. Might a new tech bubble be inflating where only insiders — all with an interest in more pumping-up — can see it? And is the wider public the loser when more and more assets are owned by an investment elite?
News that Snapchat’s parent company Snap has filed for a $20bn-$25bn public offering has raised hope that the status quo is returning. And pressure from employees and investors will, in time, push some tech companies into the IPO market. But the general trend towards a greater private ownership of equity is likely to last. The availability of private capital of all sorts persists. Dramatic evidence of this was the recent decision of SoftBank and Saudi Arabia to set up a $100bn tech buyout fund. It would have twice the firepower of the entire US venture industry. At the same time, being public is hard work, in terms of reporting and pleasing restless markets.