The biggest tech companies strengthened their hold on the global economy during the pandemic. Now, the industry is leveraging a moment of market euphoria to gear up for what comes next.
What’s happening: Airbnb and DoorDash could raise billions of dollars through initial public offerings, while Salesforce’s purchase of messaging platform Slack (WORK) for nearly $28 billion is a bet on the future of work.
This week has brought a flurry of tech deal activity as investment bankers help companies prepare for life after 2020.
The arrival of safe and effective vaccines has given investors a jolt of confidence, making it easier for companies to make their Wall Street debuts with bold promises about future growth.
See here: Airbnb disclosed Tuesday that it plans to sell shares in a price range of $44 to $50. At the the upper end of that range, Airbnb would be valued at just over $30 billion — not far off its private valuation before the pandemic decimated demand for travel bookings.
If the offering goes ahead at $47 per share, the deal could raise up to $2.5 billion. It’s a notable figure for a company that’s come through an immensely challenging year, slashing costs and relying more on longer-term stays closer to home.
Not alone: Delivery app DoorDash said earlier this week that its IPO could raise $2.54 billion if it prices shares at $80, the midpoint of its expected range.
Meanwhile, other tech companies are increasing their exposure to cloud computing and services that support remote work, which have been bright spots during the pandemic.
Salesforce (CRM), which sells cloud-based customer management software and other enterprise applications, said its acquisition of Slack, announced Tuesday, will help to bolster its business offerings at a crucial time.
“Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world,” Salesforce CEO Marc Benioff said.
It’s not just a US phenomenon. After selling nearly $100 billion in assets, Japanese conglomerate SoftBank (SFTBF) is back in buying mode.
Sinch, a Swedish cloud and telecommunications company, said this week that SoftBank had acquired a 10% stake in the firm, which is the best performing stock in Europe this year.
And Chinese smartphone maker Xiaomi said Wednesday that it’s raising more than $3 billion for strategic investments and expansion in key markets.
Step back: In a recent report, Bain & Company noted that tech companies’ share prices have been “resilient” during the recent downturn, and many are sitting on piles of cash. That creates the conditions for a spending spree.
“Those with the means will use this opportunity to add new capabilities and reposition their organizations for the post-pandemic world,” partners Adam Haller and Chris Johnson said.
