Tech startups that were eager to go public this year were forced to put those plans on hold amid the market crash. With IPO conditions likely to remain tough at least until the end of the year, companies offering alternatives to equity raising are clamoring to help bridge the gap.
Direct lender Owl Rock Capital, which participated in debt deals for DoorDash, Toast and Airbnb in 2020, has seen requests from tech companies for various types of instruments, such as convertible debt, structured equity and debt. eventually increase about five times from those in previous months, Pravin Vazirani, co-head of technology investment for the company, a unit of Blue Owl, told The Information.
“There has been a very pronounced change over the past two months,” Vazirani said. “Companies are looking for other alternatives to fund themselves as they prepare to go private longer than expected.”