Twitter debut sparks hopes of similar IPOs

For technology executives weighing market flotations for Silicon Valley startups, this week's gangbusters Twitter Inc initial public offering sent a powerful signal: full speed ahead.

About a dozen private companies are valued at more than $1 billion, and many of them have already been holding informal talks with bankers. Now, many - including Box, Square and Airbnb - are likely to accelerate their IPO plans, according to venture capitalists.

It was reported on Friday that File-sharing company Box picked Morgan Stanley, Credit Suisse and JP Morgan to lead its IPO. The company has been valued at more than $1.2 billion by private venture capital investors, but it remains unclear whether it is profitable.Twitter's lack of profits proved to be no obstacle to the micro-blogging site raising as much as $2.1 billion in its IPO. 

That opens the door for other big-name private companies including Square, the payments company founded by Twitter co-founder Jack Dorsey, which has begun exploring the possibility of an IPO next year, according to the Wall Street Journal. Profits are not expected until 2015. Square declined to comment.

Airbnb, an accommodation service, is also often cited as a potential IPO candidate. "They don't have inventory and have pretty low overhead," said analyst Michael Pachter, who believes the company is profitable. The company declined to comment.

Guy on Madison Avenue

At Dropbox, a file-sharing service, Chief Executive Drew Houston said in September that his company, valued at $4 billion, has cash left from a recent fundraising round and is in no hurry to hold an IPO.

Social media service Pinterest, meanwhile, raised $225 million at a $3.8 billion valuation in October even though it had only begun to make money in September by showing ads. Chief Executive Ben Silbermann has consistently denied that the company is considering an IPO.

Jeremy Liew, a partner at Lightspeed Venture Partners, which invested in photo-messaging application Snapchat, said Twitter was the latest company to prove to investors that social media services can eventually turn their mass audiences into reliable revenue sources, even if they have yet to turn a profit.

Snapchat is perhaps one of the furthest down the line. It raised $60 million earlier this year at a valuation of $800 million. A Pew Research Center study released last month said that 9 percent of U.S. mobile phone users use Snapchat.

Notetaking service Evernote, which has been valued at $1 billion, has signalled for several months that it is beginning to mull an IPO, although CEO Phil Libin said an offering would still be at least two years away. The company has more than 80 million users and generates revenue from selling a $5 a month premium version of its app as well as a version for businesses. 

The market's embrace of Twitter comes right as the IPO market enters what is typically a seasonal lull. Public offerings typically come to a halt around the time of the Thanksgiving holiday and do not really get started again until February or March.

Kevin Hartz, a serial entrepreneur and investor who founded Xoom, a digital money transfer service that went public in February, said many in Silicon Valley believe the appetite is growing for tech IPOs.