Liftoff's IPO Success Tells Us More About Market Timing Than Mobile Advertising

The 21% first-day pop is being celebrated, but call me old-fashioned, a 21% pop means the bankers left money on the table. The company could have priced higher and raised more capital. Now, there are arguments for why you want a pop (it creates goodwill with institutional investors, generates positive headlines, etc.), but let's not pretend it's purely good news.

CEO Jeremy Bondy did the rounds on Bloomberg talking about the company's strategy, and I'm sure he said all the right things about mobile advertising growth and programmatic whatever. I didn't get a quote I could use, which tells you something about how these CEO media tours go (lots of talking, not much saying).

The bigger picture nobody's discussing

Here's what I find interesting, and what most of the coverage is ignoring entirely. The mobile advertising space is going through significant changes right now. Apple's App Tracking Transparency changes a few years back genuinely disrupted how these businesses work. Google's been making similar moves on Android, though more slowly and with more backtracking. The regulatory environment in Europe is getting stricter. AI is changing how ads get targeted and created.

None of this means Liftoff is a bad business. It might be a great business! I genuinely don't know, and neither do you based on the information available. What I do know is that a successful IPO on the second attempt tells us approximately nothing about how well the company will navigate these challenges over the next five years.

The key things to watch, if you're actually trying to understand this business:

• How dependent is their technology on third-party tracking data that's increasingly restricted?
• What's their customer concentration look like? Are they reliant on a few big app developers or diversified?
• How does their unit economics compare to competitors like AppLovin (which, by the way, has had quite a run this year)?
• What's Blackstone's timeline for exiting, and how might that affect company decisions?

I couldn't find clear answers to most of these questions in the available coverage, which is sort of my point. Everyone's so excited about the IPO mechanics that nobody's asking the business questions.

The private equity angle

Blackstone's involvement here is worth thinking about for a minute. Private equity firms have a specific playbook: buy companies, optimize operations, exit at a higher valuation. The IPO is the exit event, or at least the beginning of one. Blackstone presumably still owns a significant stake and will be selling down over time.

This isn't sinister or anything, it's just how the business works. But it means Blackstone's incentives were to get this IPO done at the best possible terms, and they succeeded. Good for them! Whether that's good for public market investors who bought in at the IPO price, well, that depends on a lot of things that have nothing to do with how well the IPO itself went.

I've watched this cycle enough times now (going back to the dot-com era, if you want to make me feel old) that I'm pretty skeptical of first-day pops as indicators of anything. Some of the biggest first-day pops in history were for companies that subsequently cratered. Some of the best long-term investments had mediocre IPO debuts. The correlation between IPO performance and long-term business success is, basically, not great.

So what

Look, I'm not saying don't pay attention to Liftoff. Mobile advertising is a real and growing market. Programmatic advertising is genuinely important infrastructure for the app economy. Blackstone doesn't back companies randomly. There are reasons to think this could be a successful public company.

What I am saying is that the coverage treating this IPO as some kind of triumph is missing the forest for the trees. The triumph, such as it is, was patience. Liftoff waited for better market conditions and got a better outcome. That's not a business insight, that's just timing.

The actual test comes now. Can they grow revenue in an environment where user tracking is increasingly restricted? Can they compete with larger players who have more data and more resources? Can they satisfy public market investors who, let's be honest, are going to be a lot less patient than Blackstone was?

We don't know yet. It's too early to say. And anyone who tells you the IPO success answers these questions is selling you something.

If you want to argue about this, my email's on the about page. I've been wrong before and I'll be wrong again, but I've also watched enough of these cycles to know that IPO day is the beginning of the story, not the end.

Aisha Patel · 25 Jun · 8 min