Tech startups that had been eager to go public this year have been forced to put those plans on ice amid the market meltdown. With initial public offering conditions likely to remain tough at least through the end of the year, firms offering alternatives to equity raising are clamoring to help fill the gap.
Direct lender Owl Rock Capital, which took part in debt deals for DoorDash, Toast and Airbnb in 2020, has seen tech company inquiries about various kinds of instruments, such as convertible debt, structured equity and term debt, increase by about five times over those in previous months, Pravin Vazirani, co-head of tech investing for the firm, a unit of Blue Owl, told The Information.
“There’s been a very pronounced shift in the last two months,” Vazirani said. “Companies are looking for other alternatives to finance themselves as they prepare to stay private longer than expected.”