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No profit, no IPO: Insiders sum up VC investment mood
Numerous businesses listed in recent years were not ready and therefore struggled to meet investor expectations after going public, according to Raghav Kapoor, CEO of investment research network Smartkarma.
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People walk past a large screen showing valuations on the Indonesia Stock Exchange (IDX) in Jakarta on March 9, 2020. (AFP/Adek Berry)
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any Indonesian companies are eyeing an initial public offering (IPO), but tech industry insiders are cautioning them to double-check they are fully prepared, pointing to rising concerns about firms listing on the bourse without a clear path to profitability.
Numerous businesses listed in recent years subsequently struggled to meet investor expectations, according to Raghav Kapoor, CEO of investment research network Smartkarma.
“A lot of the businesses were not fully ready to IPO. Some of them, even four or five years after going public, are still not profitable,” Kapoor told The Jakarta Post on the sidelines of the Tech in Asia conference in Jakarta.
“This time, people [investors] want to make sure these businesses are actually ready for the public markets. It’s taking a little while.”
Read also: Tech unicorns lost for direction amid funding drought, unclear exits
Profitability issues were not isolated to Indonesia, he continued. In other markets, many tech companies, despite being heavily funded, remained unprofitable long after their IPOs.
To go public today, companies had to prepare a more structured approach, Kapoor emphasized, focusing on early investor relations and using investment research as a marketing tool to educate investors about their business models.
