Letting the Air Out of Online Travel's IPO Bloat
Skift Take
Stock markets, at their best, can be hype killers, and public investors shot down many inflated private company valuations in 2021. This may be a sobering development for IPO and SPAC wannabes in 2022.
Dennis' Online Travel Briefing
Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.Online Travel This Week
It's no secret that venture capitalist and private equity valuations of travel startups can be vastly inflated, although Covid and lockdowns contribute to volatile market conditions.
Skift examined a crop of eight newly public short-term rental, travel tech, and rideshare companies that went public in 2021. (See the chart below.) Although many managed to pad their coffers in conjunction with 2021 stock market debuts, taking in net proceeds to fund ongoing operations or expansion dreams, their previous private valuations seem to have been grossly overstated in many cases.
For example, in April Grab, the Singapore-headquartered rideshare, delivery and fintech superapp, announced it would go public in a SPAC deal at a $40 billion valuation. Grab's debut was delayed but it started trading on Nasdaq on December 2, and as of last week's its market cap was relatively big, but a mere $24.4 billion.
Clear Secure, the biometrics and airport security company, was to go public in a $4.5 billion initial public offering. It indeed started trading June 30 on the New York Stock Exchange, and when the tickers ended last week's session, Clear Secure's market cap was just $1.7 billion.
It's a similar scenario for Vacasa, the mostly U.S. property management company that started trading as a public company on Nasdaq December 7. In July, Vacasa announced it
