CNBC Disruptor 50

Airbnb and the Silicon Valley unicorns that may dare to go public in 2020

Key Points
  • 2019 has been a historic year for IPOs, but some of the most prominent were stumbles, from WeWork's pulled deal to Uber and Lyft's weak performances as public companies.
  • The IPO market has become increasingly skeptical of Silicon Valley tech start-ups highly valued by venture capital.
  • Anticipation has swirled around five companies, including Airbnb, that may have what it takes to succeed with an initial public offering.
Chesnot | Getty Images

Entering 2020, the IPO market for billion-dollar start-ups funded by Silicon Valley venture capitalists should be healthy; that is, if market conditions were the big factor to consider in assessing 2019. The Dow Jones Industrial Average has risen more than 20% year to date, the S&P 500 even more, and yet the decision to go public has become an increasingly tense one for tech companies.

It's no secret that 2019 was a historic year for IPOs, and a mixed one as far as success is concerned. Many of the biggest names to come out of the decade's Silicon Valley unicorn club went public, including Uber, Lyft and Pinterest. One of the biggest names, WeWork, failed in spectacular fashion, seeing a $47 billion valuation all but wiped out before canceling its deal. But CrowdStrike, The RealReal, Slack, Cloudflare, Peloton, Progyny and represent the broader wave of tech-driven start-ups that succeeded in their public offerings, even if all the stocks have not since gone straight up.

Overall, IPOs have returned for investors in 2019, with Renaissance Capital's U.S. IPO ETF up 33% year-to-date. And some disruptive themes have soared, such as Beyond Meat's alternative protein business, which has performed the best of any company to raise $200 million or more in an IPO since the original dot-com bubble.

Paul Condra, lead emerging tech analyst at PitchBook, said that "2019 was an exceptional year in terms of very high-profile severely unprofitable mega unicorns going public — or attempting to go public — and this dynamic is unlikely to repeat in 2020. What 2019 proved is that despite the ability to raise venture capital, public market investors are still discerning and unwilling to reward risky companies just because they have high private market valuations."

Others are a bit more optimistic, in particular about start-ups taking the path that Slack and Spotify chose into the public markets. Ran Ben-Tzur, a partner at Fenwick & West who specializes in public offerings, told CNBC last week that he's hearing about a "pretty healthy pipeline of direct listings" for next year.

"While the IPO market is likely to remain steady next year, there will be fewer splashy listings coming to market, and premium valuations are going to be reserved for companies with a very clear path to profitability and a low degree of business risk," Condra said.

A clear path to profitability is one thing Airbnb can claim. The company has been profitable in past years, but according to press reports has posted a loss in recent quarters as its spending and investments have increased. Here are five notable unicorns from the CNBC Disruptor 50 universe, including the home-sharing giant, that could be making their way off the annual list and into the public markets next year. (CNBC reached out to each company for comment. Airbnb, DoorDash and Robinhood declined to comment any further than they already had in previous reporting. Casper and Didi Chuxing failed to respond before press time.)

Here are five companies analysts are watching that are deemed IPO candidates in 2020.


Perhaps the most anticipated market debut of 2020 is none other than home-sharing giant Airbnb. Founder Brian Chesky has been historically tight-lipped about the company's entrance into the public markets but most recently told CNBC's Jim Cramer "most people that are really rushing to go public, the No. 1 reason they do is because they need the money. We don't need to raise money, and so we haven't been in a rush," also indicating their likely pursuit of a direct listing versus traditional IPO. Airbnb's entrance to the public markets would come at a time when direct listings are becoming more attractive to companies that are well capitalized.

In November the New York Stock Exchange filed paperwork with the Securities and Exchange Commission to change the rules so companies can simultaneously execute a direct listing and raise cash. The SEC rejected that proposal last week, and the NYSE said it will "continue to work with the SEC on this initiative."

Airbnb intends to become a public company in 2020
Airbnb intends to become a public company in 2020

"Airbnb is likely to continue to see expansion and growth, but several issues cloud the 2020 IPO scenario," Condra said. "These include questions related to reportedly widening losses, ongoing privacy and quality concerns, taxes and regulation and the impact of several new entrants in the alternative hotel rental space, including companies like Sonder and WhyHotel."

According to PitchBook, the company has raised $4.4 billion to date, bringing its valuation to $31 billion. Airbnb is one of only two Disruptor 50 companies that have ranked on the list all seven years of its existence, landing at No. 7 this year.


Ranking just behind Airbnb at No. 8 on the 2019 Disruptor 50 list is bed-in-a-box start-up Casper. This past March sources revealed that Casper made plans to begin interviewing investment banks and hiring underwriters for its IPO, which was expected as early as the end of this year. In September CEO Philip Krim told CNBC that "it remains an exciting time to go public," when asked about the possibility of an upcoming market debut.

Casper's IPO would come as the company continues to show strong revenue growth, expand into brick-and-mortar retail and move even further beyond mattresses alone to offer sheets, bed frames, bedside lights and even melatonin-infused CBD gummies.

A big issue for Casper: The billion-dollar valuation may find skeptics from a market that has not been kind to recent mattress and home-furnishing IPOs. The past decade saw venture capitalists valuing many consumer brands like tech companies. Competitors like LoveSac and Purple Innovation are now stuck at or below IPO prices, which shows that investors have their doubts about the growth potential and valuation of these firms. Tuft & Needle, another Casper competitor, which never took venture capital, was acquired by mattress giant Serta Simmons in September 2018.

According to PitchBook, Casper has raised $355 million to date, bringing its valuation to $1.1 billion. This was Casper's first year on the annual Disruptor 50 list.

Didi Chuxing

Talk of a Didi Chuxing IPO began almost two years ago and has since fizzled surrounding the lackluster market debuts of U.S.-based competitors Uber and Lyft. Reports have suggested that the China Uber competitor is being priced far lower in secondary markets despite claiming twice as many daily active riders as Uber and 15 times as many daily active users as Lyft.

Didi Chuxing outspends competitors in ride-sharing expansion
Didi Chuxing outspends competitors in ride-sharing expansion

Many aspects of Didi's rapid and massive growth have sparked notable speculation about a potential IPO, but none so much as their recent spin-off of the company's autonomous driving unit into a separate, independent company. Some have suggested that streamlining businesses this way signals an effort to refine its business structure and prepare for a public market debut.

According to PitchBook, the company has raised just over $22 billion to date, bringing its valuation to $57.6 billion. Additionally, Didi has been named to the Disruptor 50 list twice, ranking high at No. 4 in 2018 and No. 2 in 2019.


While all eyes are on Airbnb, there may be another possible direct listing to look out for this upcoming year: Delivery start-up DoorDash, which ranked No. 18 on this year's Disruptor 50 list. In August sources told Bloomberg that JPMorgan Chase will reportedly lead the financing of shares that could be offered as early as 2020.

Following the unraveling of WeWork this past fall, investors have not only become wary of upcoming IPOs but skeptical of high-priced tech stocks altogether. Motley Fool writer Jeremy Bowman argues that SoftBank propping up companies, as it did with WeWork, will eventually cause the market to catch up with companies like DoorDash in the oversaturated food-delivery space.

Their pursuit of a direct listing could soften a WeWork-like blow by avoiding an investor road show and allowing existing shareholders to sell their stock. Though unprofitable, the company has raised just over $2 billion to date, bringing its valuation to $13 billion, according to PitchBook.

This was DoorDash's first year on the annual Disruptor 50 list.


The digital brokerage service has made a lot of headlines in the latter part of 2019 for their leadership in zero-fee trade policy that has caused large incumbents to follow suit. "The fact that every other retail brokerage eliminated trading commissions took a lot of the wind out of the sails of Robinhood," PitchBook's Condra said.

Just a few weeks ago the fintech company also announced that it had reach 10 million users, which co-founder Vladimir Tenev recently told CNBC's Jim Cramer is a "testament" to their mission. "People are paying lower prices, and that's something that's gone beyond Robinhood and now is available to tens of millions of consumers across the U.S.," Tenev said a few weeks ago on CNBC's "Mad Money."

Reaching 10 million users a 'testament' to mission, says Robinhood co-CEO
Reaching 10 million users a 'testament' to mission, says Robinhood co-CEO

This past October, Robinhood COO Gretchen Howard told CNBC's Kate Rooney that a Robinhood IPO would be a "step along the way at some point." According to Condra, that step could be way down the road. "Robinhood's revenue base is likely still pretty small, and given it no longer has meaningful differentiation versus competitors, I'd put low chances on an IPO in 2020," he said, despite multiple rumors and ongoing speculation of a potential 2020 debut.

According to PitchBook, the company has raised about $912 million to date which, according to the company, brings its valuation to $7.6 billion. Robinhood has been named to the Disruptor 50 list for the past three years, most recently ranking No. 47 in 2019.