The disappointing IPO season has led some to question the lofty valuations of late-stage private companies ahead of their public debuts.
On the private markets, the hyper growth of these companies and their promise to disrupt industries with software led to extreme valuations. But then the rationality and skepticism of the public markets kicked in. Uber, which had a private valuation of about $76 billion just before its IPO in May, now has a market cap of about $51 billion. Lyft's market cap is now about $12 billion, down from its last private valuation of about $15 billion.
As Wilson says in his blog post, the idea that tech and software can provide an advantage is true, but the public markets have proven that it doesn't justify the massive valuations these companies have gotten privately. Just because a company uses technology doesn't make it a technology company.
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