Daily Management Review

New private companies show big jump in price over the past four years


05/29/2017


Cost of new private companies like Uber and Airbnb has reached $ 490 billion, having increased several times over the past four years. Experts explain this by the inflow of new funds into high-tech start-ups, many of which are not yet rushing to enter the exchange and remain private companies.



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According to the estimates of the American investment bank Scenic Advisement, referred to by the Financial Times, the total value of private technology companies like Uber, founded in recent years, has reached an impressive amount of $ 490 billion. In accordance with the methodology developed by this investment bank, Airbnb now costs about $ 30 billion, and Uber - $ 68 billion. The researchers note that, despite the interest of investors in these companies, the businessmen are not in a hurry to enter the exchange, remaining private. Recent IPO of Snap is an exception, however. In March, the company held an IPO on the New York Stock Exchange, receiving an estimate of $ 33 billion from investors.

The inflow of investors' funds into high-tech companies has led to the fact that their total value has increased from $ 37 billion to $ 490 billion since 2010. "We believe that the trend in which such private companies become a true separate class of assets will continue and private investment markets will increasingly look like public investment markets ", - says Peter Christiansen, a researcher of Scenic Advisement company. The private status gives companies greater freedom of action, the researchers note. For example, Uber’s recent loss of $ 2.8 billion could cause much more negative reaction from public and markets if the company was public. This is what makes observers think that the market for large private start-ups will only grow - for example, there were only 74 companies in the Scenic index in 2010, and now it’s solid 470. This week, the investment bank is going to publish its index, which will evaluate the US and Europe companies that attracted at least $ 75 million from investors.

source: ft.com