Should We Expect a Glassdoor IPO in 2016?
After getting a ton of cash through private placements, Glassdoor Inc. may be ready for an initial public offering. Rumours are flying in Silicon Valley about a possible Glassdoor IPO in 2016, especially since Google Capital pumped $160 million into Glassdoor at the start of the year. (Source: “Google Capital Leads $70 Million Round for Job Review Site Glassdoor”, Wall Street Journal, January 6, 2015.)
I’ve got to say that a Glassdoor IPO would be a breath of fresh air. Most of what we hear about these days concerns Uber Technologies or Square Inc., leaving a gap of coverage for real possibilities like Glassdoor.
Another great aspect of Glassdoor is how well it’s branded the service. When talking to my friends about their job searches, our conversation usually includes the line, “Have you checked Glassdoor?”
The question is so common that it doesn’t even require an explanation. Glassdoor has become shorthand for performing a de facto background check on potential employers.
On Glassdoor, users can review the work environment, salary range, and interview process for various firms. Other users can then view some of this information for free, leading to smart and better-informed decisions in the job market.
Glassdoor claims to have more than 7.5 million reviews on over 340,000 companies. A quarter of its traffic comes from abroad, meaning Glassdoor is already stepping into international markets. It has bold ambitions—something I value greatly.
A Glassdoor IPO Could Be a Winner for Investors
A lot of analysts are viewing the Glassdoor fundraising as a precursor to a Glassdoor IPO, because we’ve seen this story before. A company like Glassdoor, with a big name and growing user base, starts soaking in the private funds before going public.
It’s a well-worn strategy that’s meant to optimize the success of a Glassdoor IPO. In order to make it work, big-name institutional investors should buy in during the private placement stage. Then, on the eve of a Glassdoor IPO, investors will hopefully decide to follow the smart money. By the mid morning of the IPO, Glassdoor stock would skyrocket.
That’s the basic strategy that Glassdoor would hope to try and execute ahead of its IPO.
Of the many reasons I’m bullish on a Glassdoor IPO, the most important is its commitment to anonymity. Not having to disclose you identity makes it a exponentially easier to speak freely about your employer.
In particular, the salary function—where users can post the average salary for a given position—is what makes Glassdoor special. No one is going to post that kind of information on LinkedIn, and yet it’s so important for job hunters.
Glassdoor IPO on the Horizon
With over 27 million members, Glassdoor is clearly big enough to warrant an IPO. The investment from Google Capital was enough to put Glassdoor into an elite class of startups known as “unicorns.” In Silicon Valley terms, a unicorn is a startup whose value exceeds $1.0 billion.
From my vantage point, that would be enough to suspect a Glassdoor IPO. Fortunately, we actually have confirmation of that theory. In February of 2014, Glassdoor hired Adam Spiegel, a CFO with tons of IPO experience.
“We raised the money because the markets are great […] and it provides a lot of options,” said Spiegel when asked about the Google funding. “We [still] intend to be public.”
Spiegel failed to lay out a specific timeline for Glassdoor’s eventual IPO, but rumours abound that we should keep our eyes open in 2016.