Technology veterans set up a new fund to invest in U.S. growth companies to take them public on Asia-Pacific exchanges. The GPO Fund’s thesis is that the U.S. IPO market is broken for small cap companies and that global public offerings will become the preferred path to multi-billion dollar valuations, otherwise known as “unicorns”.
Public offerings by small growth companies once opened a door for further growth, but now that path to list in the U.S. is nearly impossible. Last year, only 18 American companies completed IPOs that raised less than $50 million as compared with 557 companies in 1996. Based on today’s standards, even when inflation adjusted, firms such as Intel, Oracle, Cisco, Amazon and NVidia would all be too small to IPO in the U.S.
Jeff Stewart, co-founder and former CEO of Singapore based Lenddo, a FinTech pioneer, and Key Compton, who founded several North American based technology companies, have come together to launch the GPO Fund. The fund will invest in world-class, technology-enabled, growth companies with private valuations in the $100 to $200 million range. The explicit goal of each investment is to expand portfolio company operations in Asia-Pacific while also initiating a public listing on a major Asia-Pacific exchange within 12 months.
“We believe a public offering lays the foundation for growth, providing companies with improved credibility, transparency and financial flexibility,” said Stewart. “The U.S. public markets have failed an entire generation of growth companies. Instead, companies are resorting to private investment rounds that result in complex capital tables and lead to misaligned stakeholder interests. Meanwhile, the global capital markets have matured to the point where they have become a very attractive option.”
The investment thesis is straightforward, with the GPO Fund focusing on founder-lead technology companies that can grow aggressively in the Asia-Pacific region. The wealth creation in Asia-Pacific is particularly dramatic. The region represents more than half the world’s population and 22 of the world’s 37 megacities.
Given the fund’s focus on global opportunities, the team has elected to use an Initial Coin Offering (ICO) to raise its capital. While it is unclear how quickly ICOs will be appropriate for tech-enabled growth companies as a public offering platform, the team believes that blockchain-based technologies will gain broad adoption in capital markets around the world.
“IPOs and ICOs will converge over time. Conducting our own ICO will give us firsthand insights into the coming hybrid listings we expect,” said Compton. “There are obvious advantages to both traditional stock exchanges and token markets and combined listings will be unbeatable for companies and investors. Our intention at the GPO Fund is to advance the current state of the art and make long-term and constructive contributions to global capital markets.”
The Global Public Offering Fund is a new investment fund designed to capitalize on the coming decentralization of capital markets by investing in world-class, technology-enabled growth companies that can benefit from a “Global Public Offering”. More information at http://GPO.fund