How Much Revenue Do You Need to IPO in 2025?
2/16/25 Benchmarks for Operators
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How Much Revenue Do You Actually Need to IPO?
It used to be that if you built a good company, showed solid growth, and had decent unit economics, you could go public. But today? The bar has been raised—big time.
Let’s take a trip through the last ~15 years of tech IPOs to put today’s market into context.
Then we’ll predict some companies who could make the jump this year.
A Look Back at the 2010s
In the 2010s, companies could go public with much smaller revenue levels.
RNG (RingCentral) in 2013 – $136M
ETSY (Etsy) in 2015 – $195M
TWLO (Twilio) in 2016 - $167M
These companies were early movers in their industries. RingCentral was riding the wave of cloud-based communication. Etsy brought the artisanal e-commerce niche to Wall Street. Twilio was part of the early cloud infra as a service boom, where companies could IPO while still deep in the red, so long as they had a path to scale.
Back then, the median IPO revenue hovered between $100M-$250M, and that was enough. And they also weren’t trying to raise billions of dollars in capital (Twilio raised $150M in capital at a $1.2 billion valuation, which was considered impressive). But by the late 2010s, things changed. Investors started expecting bigger numbers, stronger growth, and clearer profitability paths. And companies wanted to raise even more dough.
2021: The Year of the Mega IPOs
You might remember 2021 as the IPO bonanza year. A record 1,035 companies went public globally. But this wasn’t just about quantity—some of the biggest IPOs of all time happened in 2021.
COIN (Coinbase) – $1.3B in revenue at IPO
Riding the crypto boom, Coinbase went public via a direct listing and quickly hit a market cap of nearly $86B on its first trading day. It was one of the largest debuts ever for a fintech company.
ABNB (Airbnb) – $3.4B in revenue at IPO
Despite travel taking a massive hit during COVID, Airbnb rebounded hard and went public at the end of the year with one of the most anticipated IPOs of the decade.
DASH (DoorDash) – $2.2B in revenue at IPO
Fueled by the pandemic-driven food delivery boom, DoorDash went public with massive growth numbers. While questions loomed about long-term profitability, its IPO was a massive success.
At this point, the median revenue at IPO had skyrocketed. What used to be a $250M threshold was now +$500M—and companies raising billions became the norm.
2022-2023: The IPO Freeze
And then… everything stopped.
Interest rates went up. Growth stocks crashed. Investors got skittish. And suddenly, the IPO market dried up.
In 2022 and 2023, we basically had no major IPOs because companies that would’ve gone public at $200M in revenue weren’t getting the valuations they wanted.
Some companies that IPO’d in 2021 faced brutal corrections—Affirm (AFRM) soared to $168 per share, only to crash below $9 in 2022 as interest rates rose and growth stocks fell out of favor. But here’s the thing—Affirm has since rebounded to over $80, and now trades at 9x forward revenue, proving that some high-growth fintechs still have staying power. Others, like Blend (BLND), haven’t been as lucky.
For two years, companies that could have IPO’d stayed private. Because no one wanted to debut into a brutal market. Especially when they saw what was happening to companies who had recently snuck in with revenues closer to $100M, like JFrog, SentinelOne, and PagerDuty.
2024: The Rebound – But With a Higher Bar
Then, in 2024, we’re back—but only if you’re big.
RDDT (Reddit) – $804M in revenue
KVYO (Klaviyo) – $585M in revenue
RBRK (Rubrik) – $628M in revenue
CART (Instacart) – $2.9B in revenue
These numbers aren’t just higher —they’re double what used to be normal pre COVID.
And that’s where OneStream comes in. They IPO’d last year with just ~$400M in LTM (last twelve months) GAAP revenue and ~$500M in ARR (Annual Recurring Revenue), testing whether the market is finally willing to entertain smaller IPOs again.
Then we saw ServiceTitan, the operating system for the trades, pull up with ~$700M in GAAP revenue and ~$800M in ARR.
And as of Thursday - SailPoint - the cybersecurity firm going public for the second time under Thoma Bravo. They’re at ~$700M in LTM GAAP revenue and ~$800M in ARR.
So it feels like we’re honing in on that minimum of $500M to $700m range as clear for takeoff (but not without its risks).
What Comes Next? The 2025 IPO Watchlist
So, we’ve covered how the IPO bar has risen, and how 2024’s crop of public companies is setting a new standard. But what about 2025?
There’s already a strong lineup of companies rumored to go public. Based on valuation and revenue estimates I’m grabbing from position.so:
Deel – HR and payroll software, growing 70% YoY and now at $800M+ in revenue.
Databricks – AI-powered data analytics, sitting on $3B+ in revenue and a $62B valuation.
Canva – The design platform has surpassed $2.5B in revenue and could be a massive IPO.
Anduril – Defense tech company on pace for $1B in revenue—a rare play in national security.
Stripe – One of the most anticipated fintech IPOs of the decade—if they finally decide to go public. They’re at a $70 billion valuation and doing over $4B in revenue
Klarna – The buy-now-pay-later giant could make a major splash in European markets. They’ve had a topsy turvy run at things with a valuation going from $45 billion to $6.7 billion. but with over 2 billion in revenue they could make a move
CoreWeave – A cloud computing company that’s growing rapidly due to AI demand. They’re valued at $23 billion and doing over $2 billion in revenue
Chime – A leading neobank that could finally go public in 2025. They’re valued at $25 billion and doing over $1.53 billion
If these names go public next year, we’ll be looking at another big shift in the IPO landscape—with a focus on AI, fintech, and national security.
Final Takeaways: The New IPO Playbook
So can you IPO at $100M in revenue?
You can. Technically. But you’re fighting an uphill battle to thrive in the public markets, which partially trade on attention.
To get coverage from sell-side analysts and actually move the needle in institutional portfolios—without requiring investors to take massive positions—you need a market cap of at least $5B. Some would even argue $10B+ is the new standard.
Why? Institutional investors like Franklin Templeton, Blackrock, and Fidelity can only hold so many stocks in their portfolios, and each one needs to be capable of returning meaningful capital… But without being overly concentrated in a way they would be unable to unwind from quickly in a pinch.
To make it real - in order for an investor to put $500m to work in Ringcentral, which currently sits at ~$3B market cap, it would require 15% to 20% ownership. That would trigger all sorts of disclosures, and there isn’t nearly enough float to get in and out of the stock responsibly.
So size matters in 2025.
And to tie that back to revenue: If you’re lucky enough to command a 10x valuation, that means you need at least $500M in revenue to clear a $5B valuation. Even better if you can credibly claim a clear path to $1 billion within the next 18 months (just like Rubrik did within a couple quarters of going public) so you don’t fall out of favor.
So, could we ever see a return to the days when companies like WIX, HUBS, or APPF IPO’d with sub-$150M revenue? Maybe. But right now, the new rule is clear:
You want to IPO? Bring at least half a billion in revenue—or a damn good reason why you deserve to be public.
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TL;DR: Multiples are UP week-over-week.
Top 10 Medians:
EV / NTM Revenue = 18.0x (UP 1.1x w/w)
CAC Payback = 28 months
Rule of 40 = 52%
Revenue per Employee = $397K
Data Source: Koyfin
Figures for each index are measured at the Median
Median and Top 10 Median are measured across the entire data set, where n = 110
Population Sizes:
Security: 17
Database and Infra: 14
Backoffice: 16
Marcom: 16
Marketplace: 15
Fintech: 16
Vertical SaaS: 16
Revenue Multiples
Revenue multiples are a shortcut to compare valuations across the technology landscape, where companies may not yet be profitable. The most standard timeframe for revenue multiple comparison is on a “Next Twelve Months” (NTM Revenue) basis.
NTM is a generous cut, as it gives a company “credit” for a full “rolling” future year. It also puts all companies on equal footing, regardless of their fiscal year end and quarterly seasonality.
However, not all technology sectors or monetization strategies receive the same “credit” on their forward revenue, which operators should be aware of when they create comp sets for their own companies. That is why I break them out as separate “indexes”.
Reasons may include:
Recurring mix of revenue
Stickiness of revenue
Average contract size
Cost of revenue delivery
Criticality of solution
Total Addressable Market potential
From a macro perspective, multiples trend higher in low interest environments, and vice versa.
Multiples shown are calculated by taking the Enterprise Value / NTM revenue.
Enterprise Value is calculated as: Market Capitalization + Total Debt - Cash
Market Cap fluctuates with share price day to day, while Total Debt and Cash are taken from the most recent quarterly financial statements available. That’s why we share this report each week - to keep up with changes in the stock market, and to update for quarterly earnings reports when they drop.
Historically, a 10x NTM Revenue multiple has been viewed as a “premium” valuation reserved for the best of the best companies.
Efficiency Benchmarks
Companies that can do more with less tend to earn higher valuations.
Three of the most common and consistently publicly available metrics to measure efficiency include:
CAC Payback Period: How many months does it take to recoup the cost of acquiring a customer?
CAC Payback Period is measured as Sales and Marketing costs divided by Revenue Additions, and adjusted by Gross Margin.
Here’s how I do it:
Sales and Marketing costs are measured on a TTM basis, but lagged by one quarter (so you skip a quarter, then sum the trailing four quarters of costs). This timeframe smooths for seasonality and recognizes the lead time required to generate pipeline.
Revenue is measured as the year-on-year change in the most recent quarter’s sales (so for Q2 of 2024 you’d subtract out Q2 of 2023’s revenue to get the increase), and then multiplied by four to arrive at an annualized revenue increase (e.g., ARR Additions).
Gross margin is taken as a % from the most recent quarter (e.g., 82%) to represent the current cost to serve a customer
Revenue per Employee: On a per head basis, how much in sales does the company generate each year? The rule of thumb is public companies should be doing north of $450k per employee at scale. This is simple division. And I believe it cuts through all the noise - there’s nowhere to hide.
Revenue per Employee is calculated as: (TTM Revenue / Total Current Employees)
Rule of 40: How does a company balance topline growth with bottom line efficiency? It’s the sum of the company’s revenue growth rate and EBITDA Margin. Netting the two should get you above 40 to pass the test.
Rule of 40 is calculated as: TTM Revenue Growth % + TTM Adjusted EBITDA Margin %
A few other notes on efficiency metrics:
Net Dollar Retention is another great measure of efficiency, but many companies have stopped quoting it as an exact number, choosing instead to disclose if it’s above or below a threshold once a year. It’s also uncommon for some types of companies, like marketplaces, to report it at all.
Most public companies don’t report net new ARR, and not all revenue is “recurring”, so I’m doing my best to approximate using changes in reported GAAP revenue. I admit this is a “stricter” view, as it is measuring change in net revenue.
Operating Expenditures
Decreasing your OPEX relative to revenue demonstrates Operating Leverage, and leaves more dollars to drop to the bottom line, as companies strive to achieve +25% profitability at scale.
The most common buckets companies put their operating costs into are:
Cost of Goods Sold: Customer Support employees, infrastructure to host your business in the cloud, API tolls, and banking fees if you are a FinTech.
Sales & Marketing: Sales and Marketing employees, advertising spend, demand gen spend, events, conferences, tools.
Research & Development: Product and Engineering employees, development expenses, tools.
General & Administrative: Finance, HR, and IT employees… and everything else. Or as I like to call myself “Strategic Backoffice Overhead.”
All of these are taken on a Gaap basis and therefore INCLUDE stock based comp, a non cash expense.
Great data and reality check related to portfolio holdings, the rate of return, and the scale required for institutions to make the cut.
GrubMarket? $2B+ revenue