The Kolmogorov IPO Score for a16z's Marketplaces

Our analysis of a16z Marketplace 100 unicorns.

A few weeks ago we were blessed with the fact that Andreessen Horowitz (aka a16z) published their ‘a16z Marketplace 100’! After this, we started monitoring the companies listed there rather than monitoring their broader consumer-oriented portfolios that we had initially planned to monitor. Therefore, today we’ll share the ‘Kolmogorov IPO Score for the a16z Marketplace 100’, with a particular focus on their top 10 companies including Airbnb.

3rd of February 2020 Prediction

A quick refresher to our new readers; in a nutshell, we compute the strength of a public investor buy-in sentiment score, codenamed the ‘Kolmogorov IPO Score’. This is done via the ‘Kähler VC.X Pre-IPO Analyzer Platform’. This platform leverages detailed/dynamic profiling data on the companies & top investors in European & US companies. All of which are listed on the top stock exchanges i.e. NYSE and NASDAQ (see our introductory post to learn more). We theorize that our ‘Kolmogorov IPO Score’ provides a proxy indicator that informs us of the chances of a company’s IPO being successful i.e. the score corresponds to the probability of success! 

Lets now walk-through some concrete examples from the list of the 10 a16z marketplaces unicorns mentioned in the previous section. The following graph shows the Kolmogorov IPO Score by a16a portfolio i.e. the graph shows the probability of success of each company if they proceed with an IPO within the next twelve months.

So for example, Airbnb has a Kolmogorov IPO Score of 65% which translates to a 65% chance of success! In fact, our predictions suggest that Airbnb (65%), Vacasa (39%), DoorDash (38%) and StockX (31%) are currently the a16z marketplace companies in the top 10 with the highest probability of an IPO success. On the other hand, companies at the bottom end of the bar graph i.e. Postmates (12%), Rover (9%) and SeatGeek (6%) don’t have a high score and therefore should perhaps consider an M&A as the first exit option? Subscribers to our ‘Pre-IPO Analyzer Platform’ can access our web dashboard above with regular updates of the scores as we crunch more data.

A Note on Airbnb

Despite the Covid-19 concerns, that have been hitting travel/hospitality stocks, our prediction suggests that Airbnb is kind of immune, as the company has shown great promise regarding growth investor type profiles featured in our analysis. Could this be a sign that these investors are willing to be patient with Airbnb and play an Amazon-style long term game? Of course, the US Federal Reserve just announced an interest rate cut, which is also generating mixed sentiment amongst investors.

Finally, there has been reports (Bloomberg) that the company is planning to postpone its long-awaited IPO plans until 2021. Since our predictions span a twelve months period, this means that if our predictions are correct, it doesn’t matter when the company decides to float over the next twelve months, as the IPO will be successful! Of course, our predictions can change dramatically to a negative outlook if/when we get additional or direct data from the company’s S-1 filing, rather than the peripheral data we use to extrapolate insights.

We’ll be monitoring Airbnb over the coming months and produce new analysis about the company whenever we notice significant changes.

Disclaimer: Any opinions, newsletters, research, analyses, prices, projections or other information offered by Kähler AI is provided as general market commentary, and does not constitute investment advice. Kähler AI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.  ZAIKU GROUP LTD.