From Founded to Floated

How long it takes major companies to reach their IPO

One of the biggest moments in the life of a company is when it announces its IPO, signalling that it will go public and be floated on the stock market. In order to reach this point, the business will have had to perform well and offer potential investors a promising return on their investment.

Going public can be a great way to raise funds that will enable a company to expand and grow its capabilities. However, if investors aren’t enthusiastic about an IPO, it can be damaging to the company, disrupting the established order of ownership while damaging the business’ valuation. This is why the road to an IPO can be long and carefully planned, ensuring a positive reception on the stock market.

Yet, companies are not a homogenous group and huge differences exist across industries and from company to company that can make or break their chance of reaching the IPO milestone. To investigate which industries are most likely to reach an IPO, we’ve looked at 100 of the most valuable public companies globally to find out how long it took them to go from new business to being floated.

How long it took the biggest companies to go public

Here we can see the ten biggest companies in our study, ranked by overall market cap. We can also see the year in which they were founded, when they made their debut IPO, and number of years between the two.

The majority of these companies went public within a decade of being founded. The main outliers are oil giant Saudi Aramco and investment guru Warren Buffet’s Berkshire Hathaway. These also happen to be the oldest two companies in this table, which suggests that the speed at which companies reach an IPO has increased over the years.

The companies that went public the fastest

The companies that went public the slowest

The fastest The slowest

These are the companies that have sprinted from being founded as privately held companies to floating their stock for public purchase, completing the process in three years or less.

1 HDFC Bank

1 Year to IPO

India’s largest private bank was born in 1994 as a subsidiary of the Housing Development Finance Corporation (HDFC), and by 1995 was already announcing its IPO. This incredibly quick development from privately held organisation to publicly traded reflects the rapid success that the company had in its opening year which it continues to experience to this day. To date, HDFC retains a 26.14% stake in HDFC Bank.

2 Kweichow Moutai

2 Year to IPO

Kweichow Moutai is one of the joint second-quickest companies to reach IPO, with only two years between its conception and being publicly floated. The largest beverage company in the world, Kweichow Moutai, is part-owned by the Chinese government and is the most valuable non-technology company in the country. The beverage that the company produces, Moutai, is a type of baiju, a distilled Chinese spirit made from fermented sorghum, and takes its name from the town of Maotai, where it is produced.

3 Texas Instruments

2 Year to IPO

Texas Instruments also only took two years to go from being founded to being floated. This American company is most well-known for manufacturing semiconductors while having a hand in many other areas of tech development.

Rank

Name

Industry

Market cap

Founded Year

IPO Year

Founded to IPO (Years)

These companies are the slowest to reach an IPO on our list, with half of them taking over a century to offer shares on a stock exchange.

1 Hermès

162 Year to IPO

Founded in 1837, Hermès is one of the most exclusive luxury brands in the world and is still majority-owned by the founding Hermès-Dumas family. It was only in 1999, after 162 years in business, that the company offered its shares in an IPO.

2 Philip Morris

161 Year to IPO

Tobacco giant Philip Morris took the second-longest amount of time to reach an IPO, only doing so 161 years after the company was founded.

3 Goldman Sachs

130 Year to IPO

In third place is investment firm Goldman Sachs which took 130 years to launch its IPO in 1999, the same year as Hermès.

Rank

Name

Industry

Market cap

Founded Year

IPO Year

Founded to IPO (Years)

100 companies: from being founded to IPO

Here is our full ranking of 100 major companies, revealing how long each one took to reach its IPO

Rank

Name

Industry

Market cap

Founded Year

IPO Year

Founded to IPO (Years)

Show more +

As you can see, there is a huge variation in the amount of time it can take these highly successful companies to reach the point where they want to go public and launch an IPO. The difference in time between the quickest companies to IPO and the slowest is 161 years, with the average time for companies in our study being 31.98 years.

There are many reasons why a company might take less time to reach this point, such as looking for ways to fund an expansion in certain business areas, or owners simply wanting to cash in on the success that they’ve built.

Other companies might take longer to reach an IPO because they simply don’t need the injection of funds, or the current owners are reluctant to relinquish any control over the business.

So, while getting to a position to launch an IPO in a short period of time might be an indicator of a hugely successful business, a long time to reach an IPO doesn’t necessarily mean the opposite.

The industries that reach IPO the quickest

Looking over the data, we were able to calculate the average time it took for the companies from different industries to launch their IPO. So, from opening their first business bank account, how long could it take a company in your industry to reach an IPO?

1

E-commerce

8.75

Average Years to IPO

E-commerce companies are the fastest industry to reach IPOs. On average, it takes around 8.75 years for an e-commerce company to go public. This industry is entirely dependent on the internet to function and is also an incredibly fast-moving industry where results can be seen and measured instantly. This goes some way to explain the rapid growth of these companies and why they felt comfortable going public so early in their lifespan.

2

Professional Services

12

Average Years to IPO

The second quickest industry to reach an IPO is professional services, which includes firms that offer consulting, accountancy and IT services, with companies taking around 12 years on average to float their stock.

3

Telecoms

12.75

Average Years to IPO

Telecoms companies are the third quickest to launch an IPO, taking 12.75 years on average.

Rank

Industry

Average Years to IPO

Methodology

We wanted to find out which companies reach their IPOs in the shortest amount of time. To do this, we took 100 of the companies with the highest market caps and researched the date they were founded and the date when they first offered shares for public purchase. We then assigned each company an industry so we could compare the average length of time that different sectors take to reach an IPO.

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