INSUBCONTINENT EXCLUSIVE:
Now that the final technology IPOs of 2019 have touched down, it a good time to start looking back at what happened during the year
We&re hunting for trends as the clock winds down
Here one that obvious: Hardware startups are still struggling.
It cliché to note in startupland that hardware is hard
Making hardware is difficult by itself, but as all tech hardware requires software, hardware shops wind up needing wider domain expertise
than pure-software startups
And that hard.
But even if a nuts-and-bolts tech company hits scale, it seems difficult to keep that momentum up.
This year we saw Peloton,
a hybrid hardware and digital services company, go public and struggle
Despite a recent public market resurgence, the company is slipping back toward its IPO price
Today its equity is trading down about 6% to around $30 per share
The company IPO price of $29 is uncomfortably close to its current value.
2019 IPO crop also included EHang, a late entry to the market
(more here on its debut) that quickly began to lose altitude after it started to float
EHang traded up today, but the firm is still worth less than its IPO valuation, a reduced figure that was dinged during the China-based
drone company march toward the public markets.
So, Peloton is about flat and EHang is down
That not a great mix of results for a year IPO class of hardware companies
Looking back in time, things don&t get much better.
NIO, a China-based electric car company (despite making this thing of beauty), has
deleted about two-thirds of its value since its late-2018 U.S.-listed IPO
After going public at $6.25, shares of NIO are worth just $2.70 today.
Sonos also went public in the United States in 2018
It traded above its IPO price of $15 at first
Then it fell under $10 per share as 2018 came to a close
The smart speaker and stereo company spent 2019 recovering
It now worth its IPO price again, closing trading today worth about $14.80 per share.
If you go back to 2017, however, Roku has kicked ass
After pricing at $14 per share, the TV hardware and digital services firm is trading for $137 per share, a nearly 10x gain
But Roku was moving away from hardware at the time of its IPO, making it a somewhat poor example
Hardware revenues for Roku were just 31% of revenue in its most recent quarter, for example
That figure was 42% in the year-ago quarter
It will continue to fall.
We don&t need to go over what happened to Fitbit and GoPro, I don&t think.
Hardware can make a lot of money
Samsung and Apple make oceans of money from their hardware
Microsoft has managed to make Surface into a real business, with billions of dollars in yearly revenue
Amazon has a big hardware business with both consumer reading gadgets and consumer surveillance devices
Even Google is taking its new phone seriously enough to buy out a chunk of the NBA ad slots (I think it this one), according to my extensive
Facebook is the laggard of the group.
But for smaller hardware companies going public, unless I&m missing a number of recent of IPOs — and
I don&t think that I am — it a tough world out there.
