The CEO of Amplitude is glad that his company went public in 2021, despite a sharp contraction in the value of tech shares since its IPO.
In a wide-ranging conversation on TechCrunch’s Equity Podcast, Spenser Skates, who also co-founded Amplitude, told me that going public was the “totally correct” move for the digital analytics company at the time.
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“If we were still private now we would be in a world of hurt,” he said. “There would be all this pressure to go public, but then there wouldn’t be an appetite for it. And so [it would] be harder to get out,” he added, going on to detail how delaying the IPO would have harmed Amplitude’s ability to operate, grow and acquire.
Skates’ clear answer is notable, because while Amplitude had an incredibly strong run when it was still privately owned, it has been forced to endure the same sharp correction in tech valuations that every public technology company has suffered. Moreover, the company was early to tell the market about its concerns around the macroeconomy, and swallowed a lot of the bitterness of that repricing in a single gulp.
To see the CEO staunchly in favor of running a public company at a time when the market is this volatile makes me suspect other unicorns’ decisions to not go public during 2021. In hindsight, you could argue that it was smart to hunker down and wait out the storm given how things have been since the bubble popped, but what was their logic when things were fine and dandy?
Let’s dig deeper into Skates’ decision to go public, and why he stands by it even now.
Why go public 101
Companies have a bunch of good reasons for doing a public offering. Besides the headlines and public image that doing an IPO gets you, usually, going public lets you show customers that you’re financially healthy (BigCommcere’s CEO has stressed this point several times to this column), capital is easier to raise, your market position is clearer to your customers and competitors, and you become part of a bigger cohort of large companies that are supposedly really good at what they do.