Amid fears of an impending recession, some employees at Silicon Valley's IPO-bound startups say they're starting to get anxious

Uber employees

2019 was supposed to be a blockbuster year for tech companies going public — but the volatility of the public markets is making some employees at IPO-bound tech companies nervous.
We spoke to a current employee at Uber and a current employee at Airbnb. Both companies are expected to hold their long-awaited IPOs this year.
The Uber employee says that there's a lot of anxiety within the company over the company's valuation — conflicting reports have said that Uber could go public with a market cap as high as $120 billion or as low as $90 billion. That number has a huge bearing on the value of employees' shares.
Meanwhile, the Airbnb employee says that the company is doubling down on customer service and safety so as to make sure it avoids any scandals ahead of an IPO. (A spokesperson for Airbnb says that this is "false," and that its investments in those areas are independent of any IPO plans.)
Indeed, both companies are very sensitive to negative press in the run-up to IPO, say both tech workers.

This is slated to be a blockbuster year for IPOs — mega-valuable startups like Uber, Lyft, Slack, Palantir, and Airbnb are all anticipated to make their public-market debut in 2019, giving investors and employees the chance to hopefully cash out big on their shares.

And as you might imagine, the excitement at the possibility of becoming an instant millionaire is getting to employees. A current Uber employee, who wished to remain anonymous, tells Business Insider that the recently-announced IPO is the talk of the office, with employees bringing it up at every company-wide all-hands meeting.

Some engineers are fantasizing about buying their first homes in the wildly expensive San Francisco Bay Area, while others are planning on using the windfall to put their kids through college, the Uber employee says.

"It’s such a big event when so much of your compensation is tied up in equity," the Uber employee told us. "Definitely, the entire climate is like: When are we IPO-ing? How much money am I going to get?"

Uber declined to comment for this story.

At Airbnb, the excitement has manifested in the form of a renewed focus on the work, as workers go "heads down," says a current employee at the home-sharing firm.

"We just want to make sure [the IPO] happens," he said. While the company has not formally announced an IPO, the company said on Tuesday that it's profitable, and is widely expected to make the move this year. Early last year, CEO Brian Chesky told Fortune that Airbnb would be "ready" to IPO in 2019, "but I don’t know if we will,”

Brian Chesky

Still, this enthusiasm is tempered by a healthy dose of reality, says the Uber employee. As fears of a recession swirl, and the public markets go through a period of volatility, there are concerns within the ride-sharing firm that its IPO may fall short of early projections. The employee says that at Uber, they "aren’t necessarily getting their heads over their skis" — as in, they're trying to keep their expectations in check.

Specifically, Uber employees are worrying a lot about the company's potential public valuation. Early reports pegged Uber at going public with a market cap of $120 billion, but a more recent analysis of leaked Uber financials show that its market cap could be closer to $90 billion at the time of its debut. That discrepancy would make a huge difference in the value of employees' shares — contributing to internal anxiety, says the employee.

“Will it be $90 [billion]? Will it be $120 [billion]? Will it be less than that?" the current Uber employee told us, referring to the company's potential market cap at the time of IPO. "People are kind of more like, ‘let’s see what the price is before we start speculating wildly.’”

Even Uber CEO Dara Khosrowshahi showed signs of restraint last week when he spoke to The Wall Street Journal about going public in an unstable market. “We’ll do it when we’re ready, and, hopefully, the markets will be in a good state,” Khosrowshahi said.

The bad news factor

Another big point of concern at both Uber and Airbnb is the possibility of bad press in the run-up to the IPO, say both employees we spoke to. This is important, as both companies have found themselves at the center of controversy in recent memory — something to which employees are very sensitive, says the Uber employee.

“The pure fact that we’re pre-IPO just means our valuation can fluctuate so much based on news stories. Everyone is very sensitive about every news story that comes out, which there are a lot for Uber," says the Uber employee.

In 2017, Uber founder Travis Kalanick stepped down as CEO after a string of high-profile scandals, and in 2018, a self-driving Uber vehicle was responsible for the death of a pedestrian.

And the Airbnb employee cites an episode from early 2018 where a guest allegedly threw a massive 300-person party, doing lots of damage to the home — and the host said that she didn't hear back from Airbnb about the issue for weeks afterwards, sparking an outcry.

Dara Khosrowshahi

The Airbnb employee told us that the company is building out its customer support teams to avoid any such public relations scandals ahead of its public offering.

“A lot of the talk internally is about buttoning everything up,” the Airbnb employee said. “So we’re bulking up on teams like Trust & Safety and Support.”

However, Airbnb disputed this account of things in a statement to Business Insider, saying that any investments in customer service and safety are just a natural extension of its continued popularity, and unrelated to a potential IPO.

"This rumor is false," said Nick Papas, Airbnb's global press secretary.

"We are always committed to supporting our community and continuing to scale this support as the community grows. Our ongoing investments in trust and safety have nothing to do with an IPO and everything to do with continuing to support a community that is on course to grow to 500m guest arrivals over this quarter."

Regardless of the reasoning, the Airbnb employee is glad that the company is taking proactive measures now, before these incidents potentially impact the value of employees' shares later.

“It’s better to remedy things now before you’re on the public markets," says the Airbnb employee.

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