Which US companies had the biggest IPO haircuts?

September 11, 2019 View comments (4)
Not every startup with a meteoric rise in its private valuation has had a fairy-tale journey to the public markets.

Most do well enough when it comes to exit value. Since the start of 2010, the median valuation step-up for VC-backed companies at IPO has fluctuated between 1.6x and 1.1x, according to our 1H 2019 VC Valuations Report. Last year, the multiple rose to its highest point since 2012, but through the first half of 2019, it dropped back to tie a decade low. This year has been marked by IPOs for some of the most valuable VC-backed companies in the world, and those lofty private valuations have made big step-ups difficult to achieve. However, down round IPOs are still relatively rare.

The ongoing drama of WeWork reportedly slashing its valuation potentially as low as $15 billion—a far cry from the $47 billion figure it reached in January—has intensified conversations on whether steep valuations of VC-backed companies will be validated by the public markets in the future.

But while WeWork's massive valuation drop would be historic, it's not the only VC-backed company that has felt the heat regarding a potentially inflated valuation leading up to an IPO. In recent years, businesses including content management business Box and payments platform provider Square dropped their valuation at the time of exit. And one of the recent entrants to the list includes Pinterest, which priced its IPO in April at a valuation of $10.1 billion, marking a discount of roughly $2.24 billion from its last VC financing.

How much have some of the most valuable US companies lost at the time of their exit? Using data from the PitchBook Platform, we ranked the 12 companies with the biggest IPO haircuts since 2000, based on their last private valuations compared to initial market caps. Click on the logos to view each company's profile.

Related content