Peloton Interactive (PTON) raised $1.2 billion at a $9.6 billion diluted market cap, becoming New York’s largest startup ever to go public. It is also the city’s only VC-backed company ever to raise $1 billion, and the largest VC-backed consumer IPO anywhere in at least 20 years.
Founded in 2012 and backed by Tiger Global and True Ventures, Peloton has rapidly grown to nearly $1 billion in annual sales, showing year-over-year growth of 110% in the past fiscal year. While it is unprofitable on EBITDA (-8% margin) with even lower cash flow (-21% FCF), Peloton has achieved a strong recurring revenue stream with its monthly class subscriptions.
Peloton’s offering follows that of another record-breaking New York IPO. Last week, Datadog (DDOG) raised $648 million at a market cap of $8.7 billion, New York’s largest-ever VC-backed tech IPO.
The combined IPO market value of DataDog and Peloton ($18 billion) surpasses the combined valuations of every one of New York’s 22 other VC-backed IPOs in the past 10 years ($16 billion).
Mirroring the local economy, New York’s largest IPOs have historically been financial and real estate companies, along with the occasional media titan. Aside from Peloton, the state’s seven other billion-dollar IPOs in the past decade were all spin-offs or backed by private equity.
But VC is making inroads.
Between 2009 and 2018, 21% of New York IPOs had VC backing (18 of 86). In 2019, that number has risen to 64% (7 of 11), including healthcare software provider Phreesia (PHR) and gene therapy biotech Prevail Therapeutics (PRVL).
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While California still reigns supreme in the venture industry (56% of 2019’s US-based VC IPOs), Datadog and Peloton could be a shot in the arm for New York’s startup scene, which has seen only five other VC-backed go public at billion-dollar valuations over the past decade. After Peloton ($9.6B IPO mkt cap) and Datadog ($8.7B), in third place is 2017 IPO Blue Apron, which went public at a $2.0 billion market cap, followed by Etsy (2015; $1.9B IPO mkt cap), On Deck Capital (2014; $1.5B), MongoDB (2017; $1.4B), and Yext (2017; $1.1B).
It’s worth noting that New-York based We Company (WE) could eventually surpass Peloton as the city’s largest startup to go public, with a deal size rumored at as much as $3 billion. However, its offering is currently on hold, and expected in 2020.
Below, we highlight the biggest New York-based IPOs since 2017 using the IPO Pro Location Screen.
