Software 'shitstorm' grounds Liftoff listing
Liftoff Mobile pulled its up to US$762m Nasdaq IPO on Thursday evening in the wake of the week's selloff of software stocks due to investor concerns about the threat to the sector from AI.
Joint lead bookrunners Goldman Sachs, Jefferies and Morgan Stanley had marketed the sale of 25.4m shares in the advertising technology company at US$26–$30 each, an intentionally wide range to accommodate differing views on valuation but nowhere near enough to absorb the turmoil.
“Liftoff ran into an absolute shitstorm,” said one banker who advises clients on IPOs. "The first story was ‘look, we’re cheap to the comps’; the story since then is ‘we’re actually not like those guys'."
The shift in messaging followed Anthropic’s release on Monday of legal-automation tools to its Claude AI model, which triggered fears that AI could cannibalise major segments of the software industry.
AppLovin, a software developer focused on marketing and making apps, tumbled 20.7% in the first four days of the week. Gaming software developer Unity Software (–20.2%) and advertising technology provider Trade Desk (–13.5%) were also caught in the carnage.
“In terms of timing, Liftoff couldn’t have had worse luck,” said a senior banker who covers the software industry. “I have never in my career seen the sentiment this bad toward software stocks.”
Bloomberg first reported Liftoff Mobile had postponed its IPO.
Jointly backed by Blackstone and General Atlantic, Liftoff is phenomenally profitable. In 2025, the company generated adjusted Ebitda of US$371.6m–$375.4m on revenue of US$683.2m–$686.6m, a near 55% Ebitda margin.
On those numbers, Liftoff was targeting an enterprise value on the IPO of US$6.6bn, valuing it at 17.6 times 2025 Ebitda – that compared favourably to the 40x multiple AppLovin traded at when Liftoff launched its IPO, though was less appealing to the comp's 29x multiple after the selloff, which has been so swift that analysts have barely been able to keep up. While the discount was still substantial, it was not the environment in which to price a new issue with any confidence around how it would trade.
Liftoff serves ads across more than 140,000 apps connecting to 1.4 billion users daily globally, evenly split between the Americas, EMEA and APAC. It ticked a lot of traditional software metrics, with net dollar retention of 124% – meaning growth without adding new customers – and the number of clients spending more than US$100,000 growing 18% to 362.
Yet serving advertising is a notoriously difficult and fickle business.
“Adtech is the rare business where you can keep margins and continue to grow,” said the software banker. “But it’s not a repeatable business. You have to fight for revenue every single day from customers who are using multiple competing products.”