Tomasz Tunguz (Theory Ventures) · 2024-06-24 · 710d

The Rising Revenue Threshold for Software Company IPOs: A 15-Year Trend Analysis

Analysis of US venture-backed software companies going public from 2010-2024 reveals that median IPO revenue has doubled from $90m to $189m (inflation-adjusted), with significantly fewer sub-$100m companies entering public markets. The shift is attributed to rising IPO costs (16% of $100m revenue) and the availability of cheaper private capital, causing later-stage companies to delay public listings until achieving higher scale.

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Metrics in this report

IPO Cost as Percentage of Revenue

16%

typical

For $100m annual revenue company

IPO Cost for $100m Revenue Company

9-26$m

range

Total underwriting, legal, accounting, and other fees

Median IPO Revenue (2018-2024)

189$m

median

US venture-backed software companies, inflation-adjusted

Median IPO Revenue (Pre-2018)

90$m

median

US venture-backed software companies

Post-2018 Sub-$100m IPOs

2companies

count

US venture-backed software companies

Pre-2018 Sub-$100m IPOs

11companies

count

US venture-backed software companies

Statistical Significance (p-value)

0.0063p-value

significance test

Difference between pre and post-2018 IPO revenue medians

Underwriting Fees

12%

typical

As percentage of capital raised or revenue