SoftBank’s plans for Arm revive IPO interest among tech peers

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Silicon Valley has that special feeling again. He has that IPO love look.

SoftBank completed its full acquisition of British chipmaker Arm on Friday, with plans to go public next month. Following the news, according to a new report from the financial timesthe biggest private players in technology are once again considering their own options to cash in on a potential new wave of IPO fever.

arm to arm to arm

This year’s weak IPO environment has been well documented, with debuts like Mediterranean food chain Cava and direct-to-consumer makeup seller Oddity marking some of the highlights. But given Arm’s position in the world of tech hardware, his debut could shake up the market by setting a useful benchmark. your way to even get to the public market has been convoluted, to say the least.

When it acquired the chipmaker for around $32 billion in 2016, SoftBank took the company private after a nearly two-decade public-market stint. A year later, the Japanese conglomerate sold a quarter of the company to its own Vision Fund, the $100 billion investment vehicle managed by SoftBank and backed in large part by Saudi Arabia’s giant sovereign wealth fund. In Friday’s transaction, SoftBank’s corporate office reacquired that peripheral 25% stake for $16 billion, roughly double its value from the 2017 sale, in a deal that valued Arm at $64 billion. .

With the Saudis cashed in, the way has been cleared for SoftBank founder Masayoshi Son to list Arm’s shares on the Nasdaq, with initial paperwork expected to be filed as early as Monday, the sources said. He Wall Street Journal. The rest of Silicon Valley can’t look away:

• SoftBank is in talks to list Arm at a valuation of $60 billion to $70 billion, sources told Reuters. It would mark the first major VC-backed tech IPO since freemium software provider HashiCorp debuted in November 2021, capping a hot streak of tech IPOs starring Bumble and Affirm.
• According to the FOOT, Instacart is seriously considering an initial public offering before the end of the year, after scrapping plans a year ago. Marketing automation startup Klaviyo could list as early as September, sources told Reuters, while software company Databricks and digital identity verification platform Socure are also flirting with listings.

Keeping score: Arm’s doubling of valuation and possible debut provide a much-needed win for SoftBank. His Vision Fund laid off dozens of workers last year after being embroiled in a series of bad bets, including WeWork (shot) and FTX (double shot). A word to the wise: If your massive hedge fund is betting on startups that end up embroiled in controversy and destined for a hit TV miniseries, you may be doing something wrong. Once is an oopsies, twice is a trend.